HP Labs Technical Reports
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Network Server Supply Chain at HP: A Case Study
Beyer, Dirk; Ward, Julie
Keyword(s): inventory management; supply chain management; stocking policies
Abstract: This chapter describes an inventory management project conducted at Hewlett-Packard Laboratories for HP's Network Server Division (NSD). NSD manufactures a major subassembly of network servers in Singapore and ships it to four distribution centers (DCs) worldwide, where the assembly is completed due to customer specifications. Two modes of transportation are available (air and ocean) between the factory and DCs, and customer demand at the DCs is stochastic and non- stationary. The project goal was to compute inventory policies that reduce inventory- and shipment-related costs for this subassembly by enabling more cost- effective use of ocean shipments, all without compromising order fulfillment. We discuss the challenges this project presented within the context of recent trends in supply chain management. We also describe the approach developed at HP Laboratories, as well as qualitative and quantitative results from its implementation.
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