Hewlett-Packard Deskjet Printer Case - Discussion Guide - RG - 18 Sept 2005 (5) - Hewlett-Packards Deskjet Printer Supply Chain Cases(A(B Discussion

Hewlett-Packard Deskjet Printer Case - Discussion Guide - RG - 18 Sept 2005 (5)

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Hewlett-Packard’sDeskjet Printer Supply ChainCases (A) & (B)Discussion Guide & AnswersRanjan Ghosh
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HP’S DESKJETIndustry characteristics: competitive, fast growing, exploding in Europe, changing distributionchannel, rapid technological advances.Product characteristics: quite, medium price, highprint quality, leading technology, commodity–like,lighter and smaller, reasonable speed. Supply chain characteristics: centralized manufacturing, DCs fulfilling pure distribution functions, bulky products resulting in long ocean transit, lean manufacturing shifts inventory burden to DCs.
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Inventory-Service CrisisWhat crisis: inventory imbalance, i.e., some product options having excess inventory while some others have shortages.What caused it:many product options due to geography,long DC replenishment lead time,highly uncertain market,inflexible design : not easy to rework oneoption to make it into another,out of control inventory system,uncoordinated functional interests (manufacturing, distribution, marketing, engineering )
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Curse of Product VarietyHigh inventoryPoor customer serviceHigh manufacturing costHigh cost of after-sales supportForecasting nightmareHigh obsolescence at end-of-lifeHigh overhead support
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Short Term :Rationalize Safety StockInventory control system used:Periodic review, order-up-to system.
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