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Hewlett-Packard Company
DeskJet Printer Supply Chain

Brent Cartier, Manager for Special Projects in the Materials Department of Hewlett-Packard
(HP) Company’s Vancouver Division, clicked offanother mile. It had been a long week and it
looked like it would be a long weekend as well, based on the preparation that needed to be done
for Monday’s meeting with Group Management on worldwideinventory levels for the DeskJet
Printer product line. Even when he was busy, he always took the time for the seven-mile bike
ride into work—it helped reduce stress in times like this …
The DeskJetprinter was introduced in 1988 and had become one of HP’s most successful
products (Exhibit 1). Sales had grown steadily, reaching a level of over 600,000 units in 1990
($400 million). Unfortunately,inventory growth had tracked sales growth closely. Already,
HP’s distribution centers had been filled with pallets of the DeskJet printer. Worse yet, the
organization in Europe was claiming thatinventory levels there needed to be raised even further
to maintain satisfactory product availability.
Each quarter, representatives from the production, materials and distribution organizations inEurope, Asia Pacific and North America met to discuss the “I-word,” as they referred to it, but
their conflicting goals prevented them from reaching consensus on the issues. Each organization
had adifferent approach to the problem. Production had not wanted to get involved, claiming it
was “just a materials issue,” but had taken the time to rant about the continued proliferation of
models andoptions. The distribution organization should have to track and store warehouses of
inventory, just because Vancouver Division couldn’t build the right products in the right
quantities. The Europeandistribution organization had even gone so far as to suggest that they
charge the cost of the extra warehouse space that they were renting back to Vancouver Division
directly, instead of allocating...
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