HP Deskjet Printer Supply Essay Example

entire supply chain. Despite this, each entity within the supply chain (such as design, factory, and distribution centers) has its own performance measures and evaluation responsibilities.

The supply chain as a whole does not have a performance measure. The Vancouver plant is aiming for no inventory and higher production. Each distribution center has its own customer fill rate index. The printer industry is highly competitive because outdated dot matrix printers are being replaced by inkjet and laser printers. Peripheral products such as printers are becoming standardized due to the growing demand for computers. Customers want convenient access to these products, and having a well-known brand name does not guarantee sales.

Customers choose products based on factors like cost, reliability, and availability. Retailers increase sales by not keeping inventory and depending on HP for easy product access. Computer dealers have become less important in the marketing channel. The Safety Stock and Replenishment Level used at the Vancouver manufacturing plant were determined without much thought, during a time when dot matrix models dominated the market and other printers were either non-existent or still in development.

The distribution center faced high inventory of slow-moving printers due to producing and shipping more of the old version as well as a few laser and inkjet printers. Consequently, frequently demanded printers were often out of stock as the inventory stocking policies were not adjusted to reflect market realities.

Regarding product-process design, the current manufacturing process prioritizes high production efficiency but lacks flexibility for product modifications once printers are tested and ready for sale. This hinders a quick response to changing market conditions.

One potential solution is

to realign various printer models.

Based on the monthly demand data, certain models in the market are currently experiencing a decline. These products are taking up space at the DC and should be considered obsolete, with their stock needing to be reduced. Simultaneously, it is important to increase inventory of high movers to meet customer demand. Both actions must be taken together to avoid space problems at the DC. For example, options A and AY from Europe can be replaced by options AB, AB&AQ for liquidation purposes, while model A should only be prioritized for the US DC. In conclusion, revamping the Inventory Management system is crucial.

To enhance our forecasting system, it is crucial to reassess our safety stock and stock replenishment controls. Despite the emergence of new printer versions in the market, the overall printer industry is presently in its mature stage of product life cycle. The demand for printers closely parallels that of computers. To predict this demand, we can employ a simple forecasting method like the monthly moving average or 3-month moving average. By utilizing monthly demand data for various printer models, we can adjust the levels of safety stock and establish reorder points. For a detailed explanation of this calculation, please consult Appendix A which is based on a 98% fill rate.

Performing the calculation regularly at specific intervals is crucial for using the latest demand data. This ensures that we have the right inventory ready and being delivered. However, this temporary solution is necessary because the industry cannot hold excessive inventory (as evidenced by the surplus of outdated models). To improve forecasting accuracy for product-mix demand,

particularly in competitive global markets, it is essential to prioritize Designing for Localization or Designing for Customization.

In a volatile market, we cannot assure sales solely based on inventory stocks. To mitigate the effects of inaccurate forecasts, it is necessary to explore changes in product and process design. The key to gaining a competitive advantage lies in effectively integrating product design with the supply chain. Therefore, we must carefully plan the product design, and align manufacturing and distribution activities to ensure that customization occurs at the most efficient stage in the supply chain, thereby reducing overall supply chain costs. Specifically, the Vancouver manufacturing plant should produce and distribute a generic product without power supply and manual.

The DC would then adapt the generic product to different specific options as necessary, similar to Risk Pooling. Vancouver will manufacture two types of desk jet printers: 1) A fully localized US option, and 2) A generic product without a power supply module and manual for the European market for further customization. This approach would significantly enhance response time as the DC would have stock of the generic product that can be modified for customer orders. However, there are drawbacks, such as the need for capital expenditure to change existing design and processes. Nevertheless, these investments would be justified as customer demand is met and sales improve.

By shipping generic printers without boxes and packing material, we can reduce transportation costs. Although our DC staff may initially resist this change, they will eventually be convinced when they notice a decrease in stockouts and an improvement in fill rates. In the long run, we might

even be able to eliminate the California DC completely and utilize Vancouver as the distribution center for the entire North American market. For now, our suggestion is to boost inventory of high demand printers and consider using air freight if needed to meet demand.

This plan may decrease profitability, but it enables us to maintain customer loyalty for future needs and after-sales support. In the short to medium term, we will recalculate safety stock and re-order points. Any products that are not selling or have become outdated will either be sold at a significant discount or shipped to emerging markets in Asia. We will review all safety stock calculations and adjust inventory levels accordingly. Although this may negatively impact HP's profit and loss statement, it guarantees that we have the appropriate product-market mix and creates storage space for products that we can sell.

The product must be redesigned to make it easier for the power supply unit to be assembled at the Local DC. This will involve altering the manufacturing process and providing training for the DC staff. To accomplish this, we will create modular products that utilize many common and standard parts. This strategy will be used for all future product development. Furthermore, we will incorporate common supply chain metrics like Total Inventory across the chain and Fill rate.