The Evolution of Supply-Chain-Management Models and Practice at Hewlett-Packard

Late in the 1980s, Hewlett-Packard (HP) faced inventories mounting into the billions of dollars and alarming customer dissatisfaction with its order fulfillment process. HP produces computation and measurement products whose supply chains include manufacturing integrated circuits, board assembly, final assembly, and delivery to customers. To reduce inventory and improve order fulfillment, HP called on an internal team of industrial engineers and management scientists augmented by academic collaboration. The team used an iterative process, enriched by the interaction of model development and application. HP reaped benefits well beyond its manufacturing operations, extending to diverse functions throughout the organization. Similarly, the academic partners have infused their research with real-life experience. The supply-chain methodology is now mature, and HP is transferring the technology into the product divisions.