In this case study, the Hewlett-Packard company is considering whether designing its laser jet products to include a universal power supply is beneficial or not. The design team must calculate the costs and benefits, reconcile the conflicting marketing views, product change, finance, manufacturing, and distribution processes. As such, the project team has the authority to make the decision while providing a strong explanation to defend their proposal.
Q1-In what way is the universal power supply a postponement strategy?
Hewlett-Packard was trying to design a universal power supply for their laser jet products known as "rainbow". The company had two different stipulations for the power supply since they were serving two regions-North America and Europe with voltages of 110 and 220 respectively. Moreover, the printer's engine was designed by one of HP's partners in Japan who needs the specifications in fourteen weeks in order to prepare for production processes. However, the period of production takes only up to four weeks. As such, the dilemma is that should the company develop a universal power supply, it can have the flexibility to postpone the requirements of its partner by about two months (Ohanele, 2016) Besides, should HP implement the universal power supply strategy, it can respond to the market demands by boosting its inventory and cutting indirect costs.
Q2-Costs and benefits of a universal power supply?
If the Hewlett-Packard embraces the universal power supply, it will cost the company an additional amount in the cost of materials for each printer.
If the extra cost for each printer is finally passed through the client, the price increase might eventually lead to reduced revenue.
Since all the printers will depend on a single power source supplied by one supplier, any flaw in the design may lead to damage in sales and reputation.
The universal power supply will help to avoid stock out as a result of switching to another brand.
With the universal supply of power, the company will no longer have to develop demand forecast for each individual market. It will only need to generate a projected product demand for months ahead.
The universal power supply will enable the company to better forecast demands consequently reducing issues with inventory buildup.
Additionally, the strategy will allow flexibility in terms of responding to client orders. This, in turn, enables the firm to increase its service level.
Q3-Difference of cost and benefits over the product life cycle?
At the beginning of the product life cycle, the cost of stock would definitely be high whereas, at the maturity phase, additional cost can be a real drawback. Nonetheless, better estimation of demands can help to lower inventory levels. At the end of the product life cycle, stock out cost reduces compared to the beginning since there is less concern about losing sales.
Q4-What other operational improvements can you suggest?
The ability to aggregate across all individual markets is vital as it would create an ideal environment for product movement across all markets in case the shortage of stock occurs (Elsevier, n.d.). Since customers require the products urgently, reduction of lead time would be a fundamental aspect in the timely delivery of the products hence ensuring customer satisfaction.
Q5- Recommendations about the adoption of a universal power supply
In the quest to adopt a universal power supply, Hewlett-Packard should consider a number of solutions to curb the challenges they are facing: Such recommendation would be:
To improve forecasting methods used in aggregating their products across the markets.
To come up with an inventory management system that reduces costs stockpile within the organization.
Air transportation would be essential to ensure timely product delivery, leading to consumer satisfaction. This would also enable overall cost reduction by adopting a just-in-time delivery system.
Elsevier. (n.d.). Journal of Power Sources. Retrieved from https://www.elsevier.com/journals/journal-of-power-sources/0378-7753?generatepdf=true
Ohanele, C. (2016, April 24). Network Printer Design for Universality. Retrieved from https://prezi.com/k1ny-pzmstg2/network-printer-design-for-universality/
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Hewlett-Packard Company: Network Printer Design for Universality Case Study. (2022, Nov 15). Retrieved from https://proessays.net/essays/hewlett-packard-company-network-printer-design-for-universality-case-study
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