The Evolution of Supply-Chain-Management Models and Practice at Hewlett-Packard

Lee, Hau L.; Billington, Corey
September 1995
Interfaces;Sep/Oct95, Vol. 25 Issue 5, p42
Academic Journal
This article focuses on the development of supply-chain-management models and practice at Hewlett-Packard (HP) to reduce inventory and improve order fulfillment in the late 1980s. The approach HP used to address its supply-chain problems contained an element of serendipity and yielded a host of rewards. Recognizing the need for quantitative-based models to support top management decision making, HP formed a group known as Strategic Planning and Modeling (SPaM) in 1988 and staffed it with industrial and computer systems engineers. HP charged the group with developing and introducing innovations in management science and industrial engineering. In the spring of 1989, SPaM began modeling the supply chain. The initial project was to investigate the supply-chain problems of the personal computer (PC) and deskjet printer divisions. Early in 1990, we began to develop a model that would capture material flows and the associated uncertainties of the Vancouver supply chain. In a logical progression, SPaM and its partnering divisions have moved from examining manufacturing processes to evaluating the methods HP uses to deliver the resulting products to customers. The supply-chain projects of SPaM at HP have progressed from considering material management to considering manufacturing and ultimately distribution partners. As the supply-chain-modeling work of SPaM progressed, a shift took place within HP. Some heretofore isolated and internally focused groups began to move to a broader perspective and started to work together to improve the performance of their supply chains.


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