Supply chain network optimization for Hewlett Packard

Abstract

The highly competitive market scenario today is constantly pushing companies to effectively and efficiently manage their resources. Given the globally dispersed market spaces, large product varieties, changing customer needs and rapid technological innovation, it has become challenging for companies to effectively manage market coverage and maintain service levels through product availability in the right place, in the right quantity and at the right time. Effective inventory control and inventory visibility throughout the supply chain are therefore critical elements of company’s operations. Inventory position also has direct implications on company’s financial position. Hence supply chain strategies are critical for companies and design & development of an efficient supply chain network is one of the key focus areas of companies. While companies are giving more emphasis on building a robust, efficient and agile supply chain there are large organizations that have already built complex supply chain networks over a period of time. Such supply chains may have certain rigidities which contribute to supply chain inefficiencies. Moreover, strategic moves like mergers and acquisitions, product portfolio diversification and other market dynamics constantly demand optimization of the existing supply chain network and eliminating supply chain inefficiencies. Leading companies that are highly responsive to the market constantly monitor their supply chain performance and promptly take network optimization measures to stay competitive. Network design and optimization is an analysis of existing conditions, capacities and network structures under a set of identified constraints to evaluate network capabilities, identify new business opportunities and unearth network inefficiencies. It also assists in strategic decision making like determining when and where new facilities can be opened so that better access to market is ensured. A good network design also helps to optimize investments in assets, lower operational costs and reduce working capital thereby increasing profitability. Network optimization has been rapidly evolving with several companies globally adopting the system. Today there are several software solution providers that develop Network Optimization tools which are capable of handling range of network problems right from selection of optimal transportation route to analyzing supply and demand risks.