Team 8Chris CooperAaron JonesYing Zhou

Technology and Adaptive Strategies in Supply Chain Management at HP

Overview

Successful story of HP’s merger with Compaq

HP’s adaptive SCM strategy

The Key Chain program and major elements

Future of HP’s SCM Lessons Learned

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Successful story of HP’s merger

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What is HP’s adaptive SCM strategy?

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HP created five supply chain models No-touch Low-touch Configure-to-order High-Value Services

Each business unit could use the model that best fit its processes by product.

Implementation of adaptive strategy through technology – Key Chain Program.

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The Key Chain Program

Program for supply chain collaboration

Original focus: e-procurement MRO Indirect materials procurement

Expended to address a serials of key business issues

Federated model covers the entire supply chain Private marketplace or private exchange

to enable the collaboration

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The Key Chain Program

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Core Initiative Components

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Major Key Chain Elements

Order and forecast collaboration e-Mercury

Cover online collaboration for purchase order

Forecast management with HP, suppliers, and contract manufacturers (CMs)

Goal: Enable the collaboration, not to replace purchase order processes

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The Key Chain Program

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Core Initiative Components

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Major Key Chain Elements

Inventory Collaboration Complex activities surrounding SMI

(Supplier-managed inventory) Many different parties involved

e-SMIuses Internet technologies and web-based

solutions Goal: A single web-based solution flexible

enough to accommodate variances around SMI process, while providing the ability to roll up a global view.

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The Key Chain Program

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Core Initiative Components

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Major Key Chain Elements

Auctions e-Bazaar

Initial focus: Uses auction for supply chain execution, not for

sourcing Goal: Not necessarily the lowest price but to

ensure supply of a scarce part.Recent focus: A part of the broader RFP or RFQ process

Creates structured negotiating and can create select bidding

A decision mechanism for awarding business Disposal of EOL or excess inventory

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The Key Chain Program

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Core Initiative Components

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Major Key Chain Elements

Strategic Sourcing BuyPower program Goal: To aggregate actual purchasing

activity from a spending and price perspective, drawing from spending and price forecasts, and using that info to manage the strategic sourcing of those commodities Allows for risk reduction/management

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The benefits and real value of HP’s adaptive SCM strategy

Benefits to HP Adaptation and responsiveness to

changing business dynamics Faster time-to-market with new and

competitive products Decreased manufacturing production,

distribution, and channel costs Faster service and response time

leading to increased customer satisfaction.

And continued leadership in the high-tech market

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The benefits and real value of HP’s adaptive SCM strategy

Benefits to Suppliers Ease of doing business

Allows a single point of collaboration with HP Enhanced supply and demand visibility

Improves participants’ ability to predict demand

Enables suppliers to build efficiencies into their own supply chains

Enables suppliers to pass associated discounts onto customers such as HP.

Elimination of non-value-added steps, such as administration, and costs

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The benefits and real value of HP’s adaptive SCM strategy

Benefits to Customers Incremental product value

delivered for the same or even lower purchase cost

Offer a one-stop shopping experience for global corporate customers

Focus on its legacy of manufacturing innovation-building and delivering precisely the product that customers need and want to buy

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The future of HP’s adaptive supply chain Continue to examine and deploy business and

IT efficiencies throughout its supply chain Apply other innovative uses of its SCM

strategy Balancing the costs and opportunities related

to SCM is an enterprise business issue, not just a manufacturing problem

ERP neutral or non-specific

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Lessons Learned

Technology was not the focus, achieving business value was the focus.

Create a road map or vision. Goals must be realistic. Realize gains early for sustainable

sponsorship within the company.

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