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Case Study: HP DeskJet Printer

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by

Tyler Kuenast

on 17 April 2014

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Transcript of Case Study: HP DeskJet Printer

Case Study: HP DeskJet Printer
Starting off Great
HP introduced the Desk-Jet Printer in 1988

Within 2 years it sold over 600,000 units
$400,000 profit

2 major problems had arisen
HP Background
Hewlett-Packard Co. established in 1939
William Hewlett & David Packard
By 1990 revenues hit $13.2 billion
Net income: $739 million
Headquarters: Located in Vancouver, Washington
Serves as only Manufacturing plant
Has to customize printers for each individual country
3 major Distribution Centers (DC's)
United States, Europe, and Asia
Vancouvers' Quest for Zero Inventory
Vancouver division established in 1979
Consolidated from 4 locations
Tasked to design and manufacture InkJet Printers
Realized current production methods would fail
Adopted an idea from Richard Schoenberger and Robert Hall
Within 1 year had converted to stockless production
Reduced inventory from 3.5 to 0.9 months
Drastic reduction in cycle time

Didn't have a high volume product to take advantage of this system until 1988
Problems
Come up with a solution to keep customers satisfied and inventory levels to a minimal
Come to an agreement with 3 worldwide DC's
Each wanted something different from HP
Difference in lead times and demand variability
America: 1 week lead time
Europe/Asia: 4-5 week lead time
Alternative Solutions
Develop a Better Forecasting System

Personalized Safety Stock

Air Freight

Open More Manufacturing Plants
Criteria
Total Cost
Transportation
Inventory
Cost to Open New Plant

Efficiency

Customer Service Level
By: Andrew Bassett
Kevin Keyser
Tyler Kuenast
Ben Moeller
Erik Reddout
Vancouver wants a responsive system but it isn't possible with the current setup
Final Recommendation
Open New Manufacturing Plant
Only risk is initial investment
Demand is high enough in Europe
Shorter lead times to Asia
Higher CSL at both Europe and Asia
Less Inventory at Europe and Asia
Lower transportation costs
Faster response time
Ultimate goal of expanding to Asia
Questions?
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