39
HP DeskJet Case:
DC Localization
•
Process Standardization / Postponement
•
Safety Stock Reduction
–
Current: 19,089 units (3.55 weeks)
–
With localization: 12,792 units (2.4 weeks)
•
Other benefits
–
Lower
value
of transit inventory
–
Freight reductions
–
Local presence of “manufacturing”
–
Customs implications
–
Local procurement of localization materials
•
But there are costs
–
Product redesign
–
DC modifications
40
HP DeskJet Case:
Outcome
•
Implementation
–
R&D Support: “The
product is working, so
why bother?”
–
DC Support:
“
Not our
core competency”
–
New packaging
–
Capital investment
•
Results
–
Successful
implementation
–
Millions saved
–
Service levels increased
–
Packaging won awards
–
Best practice spread to
other HP divisions
41
42
Why Customization is Popular?
•
Consumers have become aware of choice
•
Competition among manufacturers and
retailers led to the extension of
“nichification”
•
Advances in manufacturing technology
and order-taking interfaces
43
What is Mass Customization?
•
The customization and personalization
of products and services for individual
customers at a mass production price.
