hp universal power supply case study

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Hewlett-Packard Company: Network Printer Design for Universality

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Hewlett-Packard Company Network Design for Universality

 hewlett-packard company network design for universality.

Discussion 3:  Hewlett-Packard Company Network Design for Universality

In what way is a universal power supply a postponement strategy?

The decision of Hewlett Packard (HP) to implement the use of universal power supplies (UPS) in their printers is a postponement strategy because the company would be able to delay providing final specifications to their manufacturing partner in Japan by two months ( Simchi-Levi et al., 2021).  In the case of HP, this is an intentional disruption that would allow the company to improve the flow of goods and reduce waste (Phares & Richey, 2021).  HP would have an opportunity to create more accurate forecasting and potentially save money not only in reduction of inventory required at their regional distribution centers, but also because configuration and component changes would not be required to comply to country regulations should inventory need to be shipped across the Atlantic Ocean (Simchi-Levi et al., 2021).

What are the costs and benefits of a universal power supply (feel free to make assumptions)?Costs

There are several costs that are associated with the implementation of the UPS to HP’s Rainbow printers.  One cost that is associated is the increase in material costs of thirty dollars per printer (Simchi-Levi et al., 2021).  For example, if HP ordered the manufacturing partner to begin with a production run of one thousand printers, this would increase material costs by a total of thirty thousand dollars.  Another cost that HP may encounter is loss of reputation if the power supply has a defect since there is only one supplier for this component.  There is no fallback plan and HP could potentially lose revenue due to their customers buying printers from competitors.

While HP does not want to pass additional costs on to consumers, for fear of losing customers to competitors, money would be saved should additional inventory be available on one side of the Atlantic Ocean when the other side runs low.  This also eliminates the fear of stockout.  HP will also not be required to reconfigure the electronic circuitry which will save on labor and parts.   HP will experience improved forecasting since a universal power supply would be implemented, thus lowering the risk of unsold items at the end-of-life benchmark.

How would such costs and benefits be different over the product life cycle ?

There are three integral parts to the product life cycle of the Rainbow printer that HP needs to take into consideration.  The possibility of stock out is high during the beginning of the lifecycle (Simchi-Levi et al., 2021).  During the maturity stage of the product life cycle, HP will better be able to forecast additional units needed based upon customer demand.  However, HP will also be at a disadvantage in this stage because their competitors are likely to have implemented similar technologies which in turn may drive down prices.  In the end of the product life cycle there is less fear of losing sales from stock out.  HP would lose far less money at this point because sales associates are more likely to upsell customers to the newest model.

Besides deciding on a universal power supply, what other operational improvements can you suggest to HP Boise?

The first recommendation is to bring the various departments together to discuss the Rainbow printer and brainstorm on ways that HP can benefit from implementing the UPS in its products.  There seems to be a disconnect between the leaders that were interviewed for the case study and each has their own concerns about how their departments will be affected.  The second recommendation is to use more than one manufacturer.  This will divide the costs of any technical issues with the components that are supplied.  Instead of HP’s product being completely useless there will be product that is available for sale.  HP will also be able to replace faulty parts quicker so that customer downtime is reduced, and satisfaction is increased.

What would be your recommendations about the adoption of a universal power supply?

HP should take a Stochastic approach when forecasting for the uncertain demand that is expected from customers for the Rainbow printer.  The postponement strategy is perfect for HP when planning and rolling out the new printer with the UPS.  By taking the Stochastic approach HP will be able to order an initial amount of inventory to evaluate customer demand while gauging future manufacturing plans (Li & Liu, 2017).  This also may reduce the cost of production and will decrease the need to carry excess inventory for HP.

Li, L., & Liu, S. (2017). Analysis of postponement problem in supply chain of customized products. Journal of Interdisciplinary Mathematics, 20(4), 1153-1166.  https://doi.org/10.1080/09720502.2017.1364890

Phares, J., & Richey, R. G. (2021). Planned disruption and unintended consequences: Postponement by strategy vs. intervention in the U.S. beer supply chain. Business Horizons, 64(3), 369-377

Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2021). Designing and Managing the Supply Chain: Concepts, Strategies and Case Studies (4th ed.). New York, NY: Richard D. Irwin, Inc.

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Hewlett Packard Company Network Printer Design for Universality

In what way is a universal power supply a postponement strategy? (Eduardo) (1 to ¾ PAGE) First of all, we need to define what HP was trying to do. HP was trying to implement a universal power supply for their new laser printer, Rainbow. HP had two different specifications for the printer power supply since they were serving two continents Europe and North America, with voltage specifications of 220-volts and 110-volts, respectively. Also, the printer was been built in Japan by a HP partner. Specifications of manufacturing were required to be in 14 weeks on advance in order for the Japanese manufacturer to build and another 4 weeks to deliver because of custom clearance, shipment, and transportation time. HP would have to forecast the market too many weeks in advance leading to inaccurate forecasts. Just to add printers are customized by local DCs in either market which do all the labeling, accessories, etc., requested by customers. The manufacturer (Japanese supply) does the power supply and fuser, which is integrated with a printed circuit board at HP's Boise factory. The universal power supply would give HP the flexibility to postpone the specification of the printer engine by at least two months. Also, it would enable HP to respond to changing demand such as high demand in either market by been able to use the universal power supply to avoid committing (manufacturing printers with voltage of 110-v or 220-v) the product to either market. Postponing would give HP the ability to eliminate excess inventory if any by sending it to either market to avoid failures such it happened with VIPER where there was a full warehouse of the items that had to be reconfigured (adding cost) in order to meet European standards where the product was a total success unlike United States. What are the costs and benefits of a universal power supply (feel free to make assumptions)? (Eduardo) (1 to ¾ PAGE)

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