Hp printer supply chain case study

Line printers print an entire line of text at a time. Four principal designs exist.

Hp printer supply chain case study

Very close but still a far second is the Bullwhip effect. First introduced in the supply chain context in Designing and Managing the Supply Chainrisk pooling is a statistical concept that suggests that demand variability is reduced if one can aggregate demand, for example, across locations, across products or even across time.

Hp printer supply chain case study

This is really a statistical concept that suggests that aggregation reduces variability and uncertainty. For example, if demand is aggregated across different locations, it becomes more likely that high demand from one customer will be offset by low demand from another.

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This reduction in variability allows a decrease in safety stock and therefore reduces average inventory. Operations Rules Rule 3. Several examples where risk pooling should be considered when making decisions: In addition, the more consolidated the inventory, the easier it is to manage overall and the less risk of obsolescence.

Apple has very few products and options therefore it comes as no surprise that according to Gartner they have the highest inventory turnover in the electronics industry - 74, which means Apple turns its entire inventory every five days.

By centralizing a product in one location, you can take advantage of the aggregated demand. On the other hand, you need to consider proximity to customers and other factors that may push towards maintaining more warehouses.

The characteristics of each product also comes into play here as high demand products with low variability are not impacted as much by the risk pooling effect while low volume high variability products are highly vulnerable. Therefore considering the transportation impact on these decisions is important.

So for instance, parts could be manufactured but assembled only after there is a good demand signal. The extreme case of this is Dell Direct where the components are ready and assembled only after the order is received from the customer.

This allows the use of aggregated demand for the generic product which is much more accurate than the demand for the differentiated products. Benetton is famous for using postponement tactics at the actual sequencing point of the production process, whereby dying of the garments is not completed until the agent network have provided market intelligence on what particular products are in demand in which locations.

A famous example is HP which created a universal power cord for its LaserJet printers so that it did not need to differentiate between the ones shipped to different parts of the world. How do you take risk pooling into account in practice?

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Your customer value and business needs are the main drivers of your product offering, procurement and manufacturing strategy and delivery methods. You also need to balance the tradeoffs of various strategic and tactical decisions using the appropriate analytics software.

But the concept of risk pooling helps you comprehend the impact of adding more products, options, warehouses and any other complexity into your operations.

Hp printer supply chain case study

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