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 catridges 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 four hours 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 four hours no matter where that customer is located. 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 manager, Loretta Wilson. Wilson quickly assembled a team of experts from within and outside of the organisation. These included logistics, systems and operations experts. They quickly assessed the situation and established their goals, In essence, the team wanted to “find smarter and simpler ways to handle parts fewer times at several times in the distribution channel.” They concluded that a new, high tech facility was needed – one in which the distribution process could maximise efficiencies. The Human Resource Manager had to ensure that the selected individuals were ready to be moved and relocated to the team’s new assembly point/work location within 4 days. All plans had to be executed within the time frame. • The team designed a 405,000 square foot facility and specified the precise equipment and layout of the operation. 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 it’s received in the warehouserather 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. Does your team believe that the advantages accrued from specialization are lost or diminished when individuals from different specialities 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 catridges 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 four hours 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 four hours no matter where that customer is located.
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 manager, Loretta Wilson.
Wilson quickly assembled a team of experts from within and outside of the
organisation. These included logistics, systems and operations experts. They
quickly assessed the situation and established their goals, In essence, the team
wanted to “find smarter and simpler ways to handle parts fewer times at
several times in the distribution channel.” They concluded that a new, high
tech facility was needed – one in which the distribution process could maximise
efficiencies. The Human Resource Manager had to ensure that the selected
individuals were ready to be moved and relocated to the team’s new assembly
point/work location within 4 days. All plans had to be executed within the time
frame.
• The team designed a 405,000 square foot facility and specified the
precise equipment and layout of the operation. 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 it’s received in the warehouserather 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.
Does your team believe that the advantages accrued from
specialization are lost or diminished when individuals from different
specialities are put together on a team? Discuss.
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