The case arrangement concentrates on the production network emergency at present being confronted by Hewlett-Packard, especially in European area by investigating different alternatives accessible to its Manager for Special Projects, Brent Carter. The accessible alternatives incorporate changing to airship cargo from sea cargo, utilizing a postponed separation technique while fabricating, opening up an assembling office in Europe, and last enhancing the wellbeing stock count strategy. Every one of these alternatives are investigated in view of their effect on meeting top administration's desire of lessening stock levels while keeping up a 98% thing fill rate.
Hewlett Packard began in 1938, in a one-room garage in California where Bill Hewlett and Dave Packard started with plenty of energy.They have now developed systems, services, and solutions that provide industry-leading value and enable their customers to get maximum benefits from their computing and printing environments.
The "HP Way" is to gain the trust and loyalty of others, give respect to each and every individual and their job responsibilities, Hewlett Packard wants to create an atmosphere that both celebrates individualism and supports teamwork. The "HP Way" requires that manager's share corporate objectives and educates the employees to understand their roles and responsibilities. The employees were taught to follow corporate goals through open communication. When Hewlett-Packard named Leo Apotheker as its chief executive, the majority of the board that hired him had not even met the German executive. The thought that Hewlett-Packard's board would appoint a CEO without insisting on an in-person interview with all directors is just one example of the dysfunctional pattern that has created the meltdown of the technology giant. Apotheker would become the third CEO in a row to be driven out at HP. His predecessor Mark Hurd left in scandal after a female contractor accused him of sexual harassment and a board-commissioned investigation found discrepancies in his expense reports. Before Hurd, Carly Fiorina was fired in 2005 in a spat with the board over how to run the company. HP's problems started to develop during Fiorina's power struggle, but the real flare-up came with Hurd's exit. Hurd would pump life back into HP and allow them to become the largest tech company by revenue after Fiorina's departure [ (Taylor, 2011) ]. Prior to Hurd's sexual harassment scandal he was favored by the board, even though some members were intimidated by his hard edge. The messy public brawl in the wake of Hurd's departure would set the tone for Hewlett-Packard's organizational behavior today. Hurds action that has shaped HP's organizational train wreck today includes budget cuts to research and Development that has stifled innovation for the tech giant. While cost-cutting and reorganizing the company's operations made Hurd popular with investors, Hurd also supervised some major acquisitions including 3COM for $2.7 billion and Palm for $1.2 billion. The Board members at Hewlett-Packard believed that the company was in great shape financially but needed an executive that would focus on bulking up its software business while keeping the company running efficiently. Enter Apotheker, who was considered to have the best resume among a three finalists [ (Gupta & Henderson, 2011) ]. The task of hiring the next CEO would be given to a committee of four directors Andreessen, Lawrence Babbio Jr., John Hammergren and Joel Hyatt [ (Taylor, 2011) ]. The committee would focus on finding a CEO who could lead and expand HP into new growing markets, while trying to strengthen the areas where it was weak, like software. The four-person committee would pass over on internal candidates as they were deemed not ready for the task. [ (Taylor, 2011) ] In January 2011, Meg Whitman was asked to join the board at Hewlett-Packard. Nine months later, the company fired Chief Executive Leo Apotheker. He had been running HP for less than 11 months following the departure of former CEO Mark Hurd,
HP's hardware sales suffered as customers shifted to cloud-based services. And although it had made some massive acquisitions, such as Palm and EDS, both companies experienced problems that resulted in billions of dollars in write-downs. [ (Solomon, 2012) ]
With new CEO Meg Whitman at the helm Hewlett-Packard may be on the path of correcting its previous mistakes, but it also gives an insight to how a strained organizational structure can set a company back many years.
Gupta, P., & Henderson, P. (2011, September 22). Retrieved from Reuters: http://www.reuters.com/article/2011/09/22/us-hp-board-insight-idUSTRE78L4M020110922 HP. (2013). Retrieved from Hewlett Packard Investor Relations: http://www8.hp.com/us/en/hp-information/index.html O'Brien, C. (2013, January 5). Retrieved from Los Angeles Times: http://articles.latimes.com/2013/jan/05/business/la-fi-hp-whitman-20130106 O'Brien, C. (2013, January 17). Retrieved from Los Angeles Times:
- What are the industry characteristics, the product characteristics and the supply chain characteristics?
- What has caused the so-called “Inventory / Service Crisis”?
- List the important “drivers” of safety stock.
- What are the pros and cons of the following proposals mentioned in the A case: a European factory, better forecasting, more inventory.
- What is delayed differentiation and how can HP use this concept to address the problems described in the case above? How can the advantages of delayed differentiation be quantified?
- How would you evaluate the various alternatives available to Brent Cartier to address the inventory and service problem? For your analysis assume that the DCs follow a periodic review policy and place weekly replenishment orders, and the target item fill rates are 98%. Assess quantitatively the air freight option relative to current operations. Just consider the products for the European market. Do not forget to consider pipeline inventory (since HP owns the pipeline inventory from Vancouver to Europe).