1. How has HP\'s supply chain managment system changed the way the company runs

Question

1. How has HP's supply chain managment system changed the way the company runs its business?

2. It has been said that building a world-class suppy chain managment system is neither cheap or easy. Why?

1. How has HP's supply chain managment system changed the way the company runs its business?

2. It has been said that building a world-class suppy chain managment system is neither cheap or easy. Why?

SUPPLY CHAIN MANAGEMENT KEEPS Window on INVENTORY FRESH AT HP the arrival of orders. To keep inventory low, HP makes the supply Why is the PC business like the fresh fruit business Jean-Luc chain data available to parts suppliers and to production con Orga ins outside manufac tractors (since many HP PCs are produced by Meyer, a PC group marketing man turers, such as Synnex ager at Hewlett-Packard (HP) For computers manufactured by contract producers, HP Every day fresh fruit claims becomes less valuable because it thus maintains virtually no inventory Prior to supply chain man gets a little rotten. In the PC business, every day prices go agement software, Synnex maintained four weeks of parts down New computer technology develops so quickly that inventory. With the new automated system, their parts inven computers sitting on the shelf become technically outdated. To tory has been cut to two weeks.The supply chain management full price, HP created a software even monitors the parts inventory and automatically help the company sell its computers at orders more parts when inventory gets low. sophisticated supply chain management system that produces PCs to order and gets them to customers within 48 hour The new system automates much of the process. Orders a placed via computers that in turn forward the data to HP's pro uction and delivery computer systems. Some of these systems are linked to the systems of HP's suppliers. Synnex, located in Fremont, California, is a contract manufacturer of PCs for a number of companies including HP When orders arrive at the credit of the cus ex, computers immediately check tomer placing the order Simultaneously they validate the order configuration to make sure it works (so no one wastes time uilding a computer with incompatible, duplicate, or missing components). Assuming everything checks out, the order is automatically forwarded to a computer that controls produc tion. That computer prints out an instruction ticket for the assembly technician while simultaneously forwarding a parts order to Synnex's warehouse. The software to be included with e purchased computer is loaded onto that computer's stor age unit and then the whole parts onder with the ticket are shipped to the technician's workstation. One worker assembles HP is using supply chain management software in other parts of its busi- the computer and then connects it to a computer that tests it. ness, and can now efficiently manage its supply chain for plastic parts The new computer is then boxed, tagged, and shipped. Using the bar code on the ticket, even the delivery is monitored by com To Think About: How has HP's supply chain management system changed the way the company runs its business? It has puter Much of the information in this process is communicated been said that building a world-class supply chain management through the Internet. system is neither cheap nor easy Why? HP's supply chain management system enables customers to receive their new computers very rapidly while HP reduces pro- Sources: Rory J. o Connor, "Keeping Inventory Fresh Upside, June 2000 and duction errors. The system also reduces inventory parts, goods eCompany staff, "Supply-Chain Software: Hewlett Packard eCompany, process, and completed products. Knowing exactly what com November 2000. s to build helps HP reduce its pipeline of products awaiting

Explanation / Answer

HP's Supply chain management changed the whole business process of the company ,

All these above facts changed the entire business way of the HP.

2.Yes,its right building a world class supply chain will not be easy since it needs full automation system where there will not be any manual system .

Building such a fully automated system for each and every production is harder.

Making them automated is not so easy hence it requires large amount of technical resources.

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