Case Study on Distribution at Hewlett Packard Even well-managed organizations do not always work as efficiently and effectively as management would like. At Hewlett-Packard (HP), billions of dollars of product are being shipped - from computers and diagnostic devices to toner cartridges each year. Customer orders come in 24 hours a day, 365 days a year. Nearly 16,000 different products are requested daily and have to be shipped from six different warehouses which are located 30 or more miles apart. It often takes weeks to get the products into the customer’s hand. This is a serious problem if customers have contracts with HP stating deliveries are to be made in three (3) business days, or less. That means that from the time a customer calls the HP customer service line, they will have their replacement part and be back in operation within 72 hours or less, no matter where that customer is located. On average, delivery to customers 6+ days. It is imperative that HP guarantee for delivery of products and services are followed to protect their image, secure its position in the market place, increase its competitive advantage and its customers engagement. One of the characteristics that distinguishes an outstanding organisation is the ability to know when problems need to be addressed and then to proceed to do something about it. The job of getting the deliveries made on time fell on the shoulders of HP’s Distribution and Logistics Manager, Loretta Wilson who reports to the head of HP. For the execution of the project, Wilson needed a team that is dedicated solely to the project, away from their substantive duties who are ready to move at the drop of the hat, work long hours per day and willing to relocate for the sole purpose of the project. Wilson started brainstorming the team she needed to resolve the problem. She briefly spoke with the Directors of Operations, Planning, Communication and PR, who were subject matter experts. They quickly assessed the situation and established their goals. In essence, the team wanted to “find smarter and simpler ways to handle parts, at several times in the distribution channel to meet delivery guarantee period.” They concluded that a new, high tech facility was needed – one in which the distribution process could maximise efficiencies, within a four hour turn around band. The team designed a 405,000 square foot facility hub and specified the precise equipment and layout of the operation and staff. For example, the distribution facility now has over a mile of conveyor belts that run constantly. New sorting machines are capable of sorting over 45 pieces a minute enabling the company to process over 60,000 products each day. Inventory is stocked within minutes after being received in the warehouse, rather than the nearly eight days it previously took. Packing and creating are done with the assistance of robotics. Work stations for employees have been redesigned to reduce product handling. A special shipping dock is equipped so that shipments can be held and their weight determined right up to the moment that Federal Express backs up to the dock. The cargo is then immediately placed into the trucks and the drivers are sent to the airport. Then, as the FedEx drivers head to the airport, they call in the cargo’s weight on their cell phones and drive to a waiting aircraft and send the cargo off to the customer. In addition, 6 warehouse locations across US serving all 52 states Assignment requirements: 1. Give (3) reasons why you think a team was needed for the design of a complex project like the distribution center for HP 2. How would you classify the team in Question #1? 3. Does your team believe that the advantages accrued from specialization are lost or diminished when individuals from different specialties are put together on a team? Discuss.
Case Study on Distribution at Hewlett Packard
Even well-managed organizations do not always work as efficiently and effectively as management would like. At Hewlett-Packard (HP), billions of dollars of product are being shipped - from computers and diagnostic devices to toner cartridges each year. Customer orders come in 24 hours a day, 365 days a year. Nearly 16,000 different products are requested daily and have to be shipped from six different warehouses which are located 30 or more miles apart. It often takes weeks to get the products into the customer’s hand. This is a serious problem if customers have contracts with HP stating deliveries are to be made in three (3) business days, or less. That means that from the time a customer calls the HP customer service line, they will have their replacement part and be back in operation within 72 hours or less, no matter where that customer is located. On average, delivery to customers 6+ days. It is imperative that HP guarantee for delivery of products and services
are followed to protect their image, secure its position in the market place, increase its competitive advantage and its customers engagement. One of the characteristics that distinguishes an outstanding organisation is the ability to know when problems need to be addressed and then to proceed to do something about it. The job of getting the deliveries made on time fell on the shoulders of HP’s Distribution and Logistics Manager, Loretta Wilson who reports to the head of HP. For the execution of the project, Wilson needed a team that is dedicated solely to the project, away from their substantive duties who are ready to move at the drop of the hat, work long hours per day and willing to relocate for
the sole purpose of the project. Wilson started brainstorming the team she needed to resolve the problem. She briefly spoke with the Directors of Operations, Planning, Communication and PR, who were subject matter experts. They quickly assessed the situation and established their goals. In essence, the team wanted to “find smarter and simpler ways to handle parts, at several times in the distribution channel to meet delivery guarantee period.” They concluded that a new, high tech facility was needed – one in which the distribution process could maximise efficiencies, within a four hour
turn around band.
The team designed a 405,000 square foot facility hub and specified the precise equipment and layout of the operation and staff. For example, the distribution facility now has over a mile of conveyor belts that run constantly. New sorting machines are capable of sorting over 45 pieces a minute enabling the company to process over 60,000 products each day. Inventory is stocked within minutes after being received in the warehouse, rather than the nearly eight days it previously took. Packing and creating are done with the assistance of robotics. Work stations for employees have been redesigned to reduce product handling. A special shipping dock is equipped so that shipments can be held and their weight determined right up to the moment that Federal Express backs up to the dock. The cargo is then immediately placed into the trucks and the drivers are sent to the airport. Then, as the FedEx drivers head to the airport, they call in the cargo’s weight on their cell phones and drive to a waiting aircraft and send the cargo off to the customer. In addition, 6 warehouse locations across US serving all 52 states
Assignment requirements:
1. Give (3) reasons why you think a team was needed for the design of a complex project
like the distribution center for HP
2. How would you classify the team in Question #1?
3. Does your team believe that the advantages accrued from specialization are lost or
diminished when individuals from different specialties are put together on a team?
Discuss.
4. Do you think Loretta Wilson’s team achieved its objective? State your reasons for your
conclusion.
When preparing your response, take into consideration the following issues:
In what way would unmet guarantees affect HP CSR
The necessity of Workplace Communication
How would the role of proper Planning and Controlling change the workplace landscape
relating to staff engagement, delivery of goods and services
The importance of Teamwork
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