“HP Transforms Product Portfolio Management with Operations Research”
Nabendu Paul (M120006MS)
Christy Mathew Jacob (M120007MS)
Paresh Pandurang Vengulkar (M120008MS)
Patel Jay Hemantkumar (M120009MS)
Navin Joseph (M120012MS)
SCHOOL OF MANAGEMENT STUDIES
NATIONAL INSTITUTE OF TECHNOLOGY CALICUT
NIT Campus P.O., Kozhikode-673601, KERALA
The case typically highlights the problems that M/s Hewlett Packard (HP) faced while following its strategy to increase its market share through product diversification and drive sales. M/s Hewlett Packard mainly faced challenges at two stages: which introducing a new product to the market and once introduced, management of the huge variety of the products. The case highlights how M/s Hewlett Packard overcame its challenges to a large extend using the various techniques of Operations Research.
Problems faced by Hewlett Packard:
HP serves various sectors of customers across the entire industry. The customers’ base extends to all the six continents and involves consumers, small-to-medium businesses and large corporations. It is a market share leader in PCs, printers, and servers. It offers over eight million possible combinations of its notebook and desktop product line. Such a huge variety of product portfolio created operational and performance challenges.
a) Although revenues were increasing, operating costs were increasing too, which eroded the profits. The operating cost was high as the inventory cost was high for such a wide variety of products. b) As product variety increased, the accuracy with which forecasting accuracy decreased. This resulted in excesses of some products and shortages in others. c) The cost of loosing order on account of stock out situation was high. d) Product variety complexity resulted in confusion and resulted sometimes in product returns due to wrong shipment, re-work and...