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Research indicates that supply chains help organizations attain competitive advantage. In turn, the successes or letdowns of such supply chains are determined in the open market by the end consumers. Rendering the fitting product, at the fitting price, at the fitting time to the consumer is not only the fundamental aspect to competitive success but also the vital element to survival (Christopher and Towill, 2001). Owing to the fact that the intricacy of supply chains in the present day, partly as a result of globalization and out-sourcing, the manner in which supply chains are structured can make a difference between an organization generating profit or loss. Different types of structures avail the management the choice to select the one that best suits consumer expectations. However, it is imperative for such chosen pipelines to go hand in hand with the business strategy of the supply chain (Christopher and Towill, 2002). In the article "Developing Market Specific Supply Chain Strategies," Christopher and Towill (2002) hypothesize three feasible pipeline designs, all of which are pertinent to the global apparel supply-chain framework.
To begin with, predictable demand for standard items can be met by means of a lean pipeline, perhaps provided for from overseas manufacturers. Secondly, unstable and volatile demand for special items can be met by means of an agile pipeline perhaps provided for from home manufacturers. The third pipeline design encompasses that for speedy reaction to replenishing standard products for which there is an unanticipated demand for particular colours, sizes, volume and the like (Christopher and Towill, 2002). This paper will elucidate the manner in which one or more of these pipeline designs for supply management would fit with the strategy of global electronics company Hewlett-Packard to optimize materials and product flows. Further, the paper will develop and present a strategy for implementing change in the organization with the objective of bringing about a transformation that will secure competitive advantage through improved performance, coordination, and innovation.
Hewlett-Packard and Supply Chain Management
Hewlett-Packard Company (HP) is one of the biggest information and technology (IT) corporations in the world. Hewlett-Packard Company is centered in the information systems industry and is a technology organization that specializes in storage computing, hardware, software as well as network services. HP is well renowned for providing technological solutions to individual consumers, businesses as well as other entities across the globe. HP competes with IBM in providing CPUs, printers, lasers and other products as well (Hewlett-Packard, 2012). Hewlett-Packard has been on a journey to institute and steer greater efficacies in the supply chain and at the same time leveraging its competitive edge of a receptive, assimilated and commercial method to supply planning and consumer satisfaction. Having a consumer-centric tactic to operations within its supply chain, Hewlett-Packard is inventing new ways and means to segment and serve a wide range of consumer needs (Johar et al., 2014).
In accordance to Lee (2004), the most effective supply chains are able to determine structural changes, at times prior to them taking place, by seizing the most recent data, sifting out noise and being able to keep a trail on major patterns. Subsequently, they shift facilities, alter supply sources, and if possible, outsource manufacturing and production. For example, when HP began manufacturing ink-jet printers in the 80s period, the company established both its manufacturing and research and development divisions in Washington (Lee, 2004). In particular, the company wanted the teams for product development and manufacture to work in tandem since ink-jet technology was in its infancy, and the major printer market was in the United States. As the level of demand increased in different regions of the globe, the company established manufacturing facilities in Singapore as well as Spain to meet the demands for Asia and Europe respectively (Lee, 2004). Despite the fact that Washington continued to be the location where the company developed new printers, Singapore grew into the biggest production facility because HP required economies of scale for its imminent survival. Towards the mid-90s, the company realized that manufacturing technologies for printers had advanced and progressed and that it could subcontract manufacturing to wholesalers wholly. Subsequently, Hewlett-Packard achieved cost reductions and continued to be a leader in an extremely competitive market (Lee, 2004).
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Towards sustaining its status and position as a leader in the IT industry, HP has to be at par with incessant progressions and advances in technology in an intensely competitive marketplace. Each fiscal year, the company unveils thousands of new products and therefore the older ones lose their value fast. (Billington et al., 2005). With the market having fierce competition, it is vital for HP to fittingly design, construct and augment the supply chain wherever possible. The outcome of this is that cost factors, for instance write-offs, material devaluation and scrap costs have come to be the sole largest disadvantage to profitability (Billington et al., 2005).
To the present moment, HP embarked upon the issue of first ascertaining, and then diminishing, inventory-driven expenses via a mix of homebased worksheets together with the modeling proficiency of Hewlett-Packard's internal Strategic Planning and Modeling group (SPaM) (Billington et al., 2005). Through this approach, the suggested strategies for supply chain management usually encompassed integration, harmonization, and partnership within the organization and amongst organizations all over the supply chain. In the organization, SCM takes into account varied activities like inventory apportionment, demand estimating and network alignment (Amaral and Kuettner, 2008).
Market Specific Supply Chain Strategies
Within any industry, an organization can utilize three different approaches to attain a competitive advantage over rivals and have a superior performance. These approaches consist of differentiation in product offering, cost leadership, and focus. For starters, differentiation in product offering takes into account offering the consumers a unique product or service compared to the prevailing ones within the marketplace. Secondly, the focal strategy encompasses offering a product or service while laying emphasis on a particular group of buyers, target market, or market segment. Lastly, the cost leadership approach takes into consideration offering consumers a product or service that has a lower price compared to the other rival products or services, which is an approach of luring and appealing consumers to the company (Tanwar, 2013).
In accordance to Christopher and Towill (2002), the companies that utilize a lean supply strategy within their supply chain are incessantly endeavoring to attain a competitive advantage via the cost leadership approach. On the other hand, companies that utilize an agile supply strategy within their supply chains constantly endeavor to attain an edge over their rivals through product and service differentiation. With regard to the lean supply strategy, the key emphasis is decreasing the level of waste in order to attain cost leadership and the major component in lead production encompasses proper management of relationships within the supply chain (Christopher and Towill, 2002). In this case, manufacturing through the lean supply strategy necessitates healthy relationships between the suppliers and consumers giving rise to an outstanding and remarkable extent of driven knowledge and reliance. By attaining and sustaining benefits of lean manufacturing, any positioning within the lean supply chain should mirror high levels of information sharing, fast enhancements in the performance of suppliers, and minimal costs of transactions. As a result, the lean supply approach anticipates the suppliers to take part in eradicating and getting rid of all waste within the product pipeline enthusiastically (Davis, 2015).
The key goal of an agile supply chain strategy is to facilitate flexibility in alignment to generate product or service differentiation by means of service levels. This is in the sense that key elements in this agile supply chain are substantial change to requirements in the market and for competition, realignment of production practices, in addition to resolving communicative and relationship problems (Christopher and Towill, 2002). As a result, manufacturing practices using the agile supply strategy necessitates relationships between the consumer and supplier, creating a remarkable extent of cooperation and trust. Any executions undertaken within the agile supply chain ought to take into account the thoughts and perceptions of personnel, management, and also mirror the organization, design and marketing of a product (Christopher and Towill, 2002). As a result, effective agile supply chain strategy placements are reliant on the alignment of environmental decisions, approach, and espoused expertise, procedures, or structures (Christopher and Towill, 2002).
Amaral, J., & Kuettner, D. (2008). Analyzing supply chains at HP using spreadsheet models. Interfaces, 38(4), 228-240. doi:10.1287/inte.1070.0336
BILLINGTON, C., CALLIONI, G., CRANE, B., RUARK, J. D., RAPP, J. U., WHITE, T., & WILLEMS, S. P. (2005). Optimizing the Profitability of Hewlett-Packard's Supply Chains. Hewlett-Packard.
Christopher, M., & Towill, D. (2001). An integrated model for the design of agile supply chains. International Journal of Physical Distribution & Logistics Management, 31(4), 235-246.
Christopher, M., & Towill, D. R. (2002). Developing market specific supply chain strategies. The international journal of logistics management, 13(1), 1-14.
Davis, R. E. (2015). Evaluation and Application of Thesis: Developing Market Specific Supply Chain Strategies. Walden University. Academia.
Eshkenazi, A. (2013). Strategy and the Supply Chain Advantage. APICS. Retrieved from: http://www.apics.org/news-landing-page/2013/06/14/strategy-and-the-supply-chain-advantage
Hewlett-Packard. (2012). 2012 Annual Report. Retrieved from http://h30261.www3.hp.com/~/media/Files/H/HP-IR/documents/reports/2013/hp-10-kar-searchable.pdf
Johar, P., Schmitt, M., Gilmore, D. (2014). Major Videocast: HP's Plans for Global Supply Chain Visibility. Supply Chain Digest.
Lee, H. L. (2004). The Triple-A Supply Chain. Harvard Business Review.
Lee, H. L., Billington, C., & Carter, B. (1993). Hewlett-Packard gains control of inventory and service through design for localization. Interfaces, 23(4): 1-11.
