Hewlett Packard Talks About Managing Its Supply Chain

At the European Supply Chain Conference in Cologne, Germany, Patrick Scholler of Hewlett-Packard provided insight into how his company manages its supply chain. As reported on PCB007's website by author Steve Gold, Scholler let conference attendees in on HP's purchasing strategies. One is a "Buy/Sell model where HP buys a part from a supplier and immediately sells it to a customer. "Buy/Sell is a pretty effective model that we invented it in the early 1990s. It's a financial model where we buy and sell in a matter of seconds. HP doesn't own the inventory," Scholler added.

Gold also discuss how HP developed a bill of materials analysis program that lower costs. "We've developed a database that can calculate the cost of a bill of materials. He also suggested HP can quantify the cost difference between using a contract electronics manufacturer and an original design manufacturer. When we look at what we get from the CEMs and what we get from the ODMs, we can compare," said Scholler. This comparison, Scholler observed, saved HP a great deal of money last year.

HP, like many other manufacturers also uses e-sourcing and reverse auctions.

Discussing metrics Scholler cited HP's custom Procurement Risk Management which helps mitigate variable factors in demand, supply and market place. The system helps suppliers by requiring OEMs to make volume commitments thus leading to better deals.

PCB007 is an online magazine for the Printed Circuit Board, Electronics Manufacturing Services and PCB Design industries. Click here to read the full article.


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