Supply Chain Business Proposal
Hewlett-Packard Company, was founded in January, 1939 by William Redington and Hewlett Dave Packard and has its headquarters in Palo Alto, California, United States of America. The company deals with manufacture of printers, computers including laptops and desktops, servers, networking products and soft wares. Hewlett-Packard’s has specifically designed a supply chain program. This is as documented by Global Logistics and Supply Chain Strategies. Hewlett Packard supply chain methods impact on design decisions. This enables product development teams and engineers in the company. This process enables the company to consider the impact of decisions on supply chain partners.
The company uses several techniques in managing its supply chain. One of which is variety control. In this case, trade-off supply chain costs are used to determine which product variants are justified in terms of brand equity, margins and channel requirements. Another strategy is take back facilitation which the company considers when it needs to change the supply chain and also when considering environmental costs. Another strategy is tax and duty reduction this is important in deciding where to source for parts and assembly products. In considering this, the company does a research of where taxes and duties for components and other assembly products is cheaper. These taxes vary from region to region. The company also takes time to determine whether it is worth the effort to design a product and manufacture it in a certain location. The company therefore adopts the strategy of delay until the end-customer demand is better known. The company also considers what parts it uses in its production process resulting in them being classified as unique parts or commonly re-used parts. Unique parts usually have lower material costs and enable the distinction of any particular part. On the other hand, common parts usually reduce inventory costs. This enables the company to adopt an appropriate supply chain strategy that ensures the supply process is not interfered with and is continuous with minimal cost. They also consider the nature of the product to be manufactured. In relation to its mode of distribution costs with design and material costs. For example a smaller and lighter material used in making a product, may enable economical air freight thus reducing inventory costs and therefore increasing responsiveness. A more rugged product may require less packaging and experiences less damage during its transportation.
Hp according to Supply Chain Performance Metrics by Warren H. Hausmann (2002), companies need to focus on two dimensions of performance to ensure supply chain integration. It is also critical that performance measures are defined in the company. Supply chains need to perform on the basis of service, Assets and Speed. In this case, service refers to the ability of a company to fulfil customer demand and also with on time delivery. Hp uses service metrics as one of the matrices. It measures how well or bad a company is serving its customers. Since it is difficult to quantify the cost of stock leaving the manufacturer or deliveries that are made late, the company results on customer service metrics as an appropriate measure. These are divided into Build-to-stock and Build to Order. In Build-to-Stock at HP, would be supply of toner cartridges for printers and copiers for the manufacture of their printers and copiers. Customers expect these equipment to be immediately at available at their time of want. HP computers assemble each PC based on a specific customer’s order and unique customer requirements.
Another metric according to Hewlett-Packard: Performance Measurement in the Supply Chain by Regine Slagmulder, another measure is inventory driven cost. It was adopted by the company so as to improve the efficiency and effectiveness of supply chain operations. The metric is divided into monetary value and time supply or inventory turns. The time supply measures relate to inventory flows; inventory is treated as an asset on the company’s balance sheet. This data enables the managers at HP to make comparisons of inventory levels across various categories. Monetary value metric measures funds tied up in inventory which is the working capital.
Information technology enables metric measurement in that it offers a major effect on supply chains. It enables a collaboration across different partners in the supply chain. It enhances the role of the customer in product development and increase the potential for customer interaction and enables the implementing of various supply chain improvements. Information technology enables various to work collaboratively. Such a metric is the Vendor Managed Inventory. For example Procter and Gamble has such a relationship with Walmart. This relationship enables the latter to maintain product inventory at Walmart’s sites. Walmart also agrees to share sell through or point of sale data with P & G so that the manufacturer has up to date all information at the point where demand by the customer is. Information sharing across the supply chain is thus efficient.
A good performance metrics relating to customer satisfaction can provide great feedback on what customers want and are demanding. It helps in improving customer relations in a company. This increases organizational productivity and profitability. Such metrics according to a framework for Supply Chain Performance Measurement by A. Gunasekaran include the metric for order planning. This method, measures the way and the extent to which customer specifications are successfully converted into information which is exchanged along the supply chain of the company. This metric is important in that it enables a company to reliably know whether its customers were satisfied by that particular product and whether they would be willing to purchase it in future. Another metric is the Assessment of Supply Link. This Assessment basically measures efficiency flow, responsiveness and also customer satisfaction. This metric is important in that it analyses strategic level measures where saving initiatives are involved and supplier pricing against the existing scenario in the market. Another is the Delivery performance Assessment metrics which measures the efficiency of the purchase order cycle time, cash flow in the company and capacity flexibility. A metric that relates to transportation is the operational level measure which keenly looks into adherence to developed schedules, ability to avoid complaints from customers and achievement of defect free deliveries in the supply chain. Quality of delivered goods is of great importance in any company.
A company can measure the feedback of a customer through customer Question Assignmenting in surveys. Where customers of a particular product are asked questions on what they think of a particular product. Whether the particular product satisfied their needs. This can be through mail or phone calls. So as to acquire the correct information, the customers need to be allowed questions on a weighted scale. Another method is through collecting information about what customers are purchasing, what they like and what they dislike, the customers actual purchase expectation and what they suggest as future improvements of a product.
Another method is through loyalty measurement. This is the likelihood that a certain customer will like a certain product and is likely to repurchase it in the future. Customer satisfaction is usually a certain way of predicting a repurchase which is influenced by performance of a product, value and quality. Loyalty is also measured when a customer recommends the product to another person say a friend or family member about that particular product. These measures of satisfaction, repurchasing and the possible likelihood of a product being recommended to a friend are indicators of satisfaction in customers. The company could also decide to do an analysis of customer experiences after they had bought the products. Feedback from customers which shows satisfaction, should be treated as a good sign that customers are satisfied with a particular product. Also comments they make could also be a good sign on which to measure product satisfaction. Customers who show dissatisfaction should prompt the company to have a change of heart and adopt other strategies to address this.
REFERENCES
– Global Logistics and Supply Chain Strategies. Hewlett Packard supply chain methods impact on design decisions
– Supply Chain Performance Metrics by Warren H. Hausmann (2002)
– Hewlett-Packard: Performance Measurement in the Supply Chain by Regine Slagmulder
