WW DIRECT CUSTOMER ADVISORY COUNCIL: Your Topic Title HereWW DIRECT CUSTOMER ADVISORY COUNCIL:
Order to Delivery
October 2005
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The information contained herein is subject to change without notice and is HP CONFIDENTIAL, not to be shared except under HP-approved non-disclosure agreement.
Order To Delivery
Obtain your feedback and direction
Share Performance Trends
Share Recent accomplishments
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The information contained herein is subject to change without notice and is HP CONFIDENTIAL, not to be shared except under HP-approved non-disclosure agreement.
Order Cycle Time – definition & problem
Order Entry
Fill Rate Definition:
The number of days it takes for the specified percentage of orders to be filled
HP Fill Rate:
Order receipt from customer to shipment (not delivery)
Business days
Scope – non-Consumer Volume Direct
Impact of Improvement: While holding or improving average Fill Rate, improving 90th%tile will increase TCE and operational performance.
50%
90%
Orders
Shipped
Time in Days
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The information contained herein is subject to change without notice and is HP CONFIDENTIAL, not to be shared except under HP-approved non-disclosure agreement.
Feedback from last meeting
April 2005
Delivery is improving but more improvement is needed in the areas of predictability, reliability, and proactive notification when delays occur.
Delivery accounted for 50% of all issues
What is it today?
Recommended offering is critical.
Predictability is a priority.
Proactive communication is essential.
– Proactive communications - Severe constraint process is in place, OSS will be reviewed tomorrow
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The information contained herein is subject to change without notice and is HP CONFIDENTIAL, not to be shared except under HP-approved non-disclosure agreement.
BENCHMARK PERFORMANCE
BETTER: Consistent performance GOOD: Improvement still needed Critical Focus Area
Here is where we see our Order Cycle Time performance by product line
Do you agree?
Feedback in green and yellow areas has been acceptable.
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The information contained herein is subject to change without notice and is HP CONFIDENTIAL, not to be shared except under HP-approved non-disclosure agreement.
Accomplishments since April 2005
Overall, the accumulation of many programs have contributed to bring the improvement that we want
Americas
EMEA
APJ
Improved mgt of backlog (50% late to 25% Y/Y) Improved allocation logic Improved FIFO execution (PSG), reduced protection & holding patterns Sever constraint alerts and recommended offering processes in place
Weekly backlog review process and problem case studies Improved planning and end-of-life management for accessories and monitors Material reservation in case of supply constraints
Credit alignment Direct allocation logic simplification Proactive pricing discount capability CIA payment workflow realignment Cross functional Direct account reviews
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The information contained herein is subject to change without notice and is HP CONFIDENTIAL, not to be shared except under HP-approved non-disclosure agreement.
Order Cycle Time (OCT) Vision
VISION
Deliver Fast and Consistently (SPEED):
HP is able to deliver products in a time that meet customer expectations. HP is able to deliver consistently.
Keep our commitments (PREDICTABILITY):
You can trust that once we make a delivery commitment, you can bank on us to live up to it.
Cost Effectiveness (EFFICIENCY):
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The information contained herein is subject to change without notice and is HP CONFIDENTIAL, not to be shared except under HP-approved non-disclosure agreement.
Recommended Offering
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The information contained herein is subject to change without notice and is HP CONFIDENTIAL, not to be shared except under HP-approved non-disclosure agreement.
Recommended Offering Approach
Improve delivery performance by segmenting HP’s product portfolio and aligning the entire value chain behind a “recommended” sub-set of the portfolio
1. Identify the products and features with consistent buying patterns, augmented by future technical trends
2. Ensure stable supply of those products and associated commodities. For example…
Special terms and conditions for strategic commodities
Risk pooling
4. Measure and continuously improve recommended offering performance
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The information contained herein is subject to change without notice and is HP CONFIDENTIAL, not to be shared except under HP-approved non-disclosure agreement.
HP Recommended Offering Concept
Complete Offering
Recommended is defined as the “sweet spot” of the offering or what we optimize for delivery (finished goods or CTO options)
Extended offering may take longer but reliable delivery commitments can be set
HP
Recommended
HP Extended
HP Extended
“HP Core” Fill Rate Objective : 90% Order Fill rate in 4 days (OTS)
Future Fill Rate Objective : near 7 days
Current HP Fill Rate : near 9 days
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The information contained herein is subject to change without notice and is HP CONFIDENTIAL, not to be shared except under HP-approved non-disclosure agreement.
HP Recommended Offering
Personal Systems (US)
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The information contained herein is subject to change without notice and is HP CONFIDENTIAL, not to be shared except under HP-approved non-disclosure agreement.
Recommended Offering Summary
US Personal Systems offering is available now
Includes desktops, notebooks and workstations
Work with your HP account manager to review it
Europe Personal Systems offering is piloting this month
Desktop PC’s to start followed by notebooks
Work with your HP account manager to review it
Europe Industry Standard Server offering is piloting in December
Asia Recommended Offering rollout timing under discussion
Need more customer friendly slide. Source Talin. Get new roadmap from Holgar and Wendy Schumer
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The information contained herein is subject to change without notice and is HP CONFIDENTIAL, not to be shared except under HP-approved non-disclosure agreement.
Predictability
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The information contained herein is subject to change without notice and is HP CONFIDENTIAL, not to be shared except under HP-approved non-disclosure agreement.
Predictability
"I want HP to be known as the company customers can trust to deliver — that once we make a commitment, they can bank on us to live up to it. If we do that, HP will be successful, but most important, our customers will be successful."
Mark Hurd
CEO Hewlett-Packard
We do what we say.
- HP has made significant improvements in delivery performance over the past six to nine months. What delivery performance issues are you still experiencing? How do they impact your business?
- Some orders have requested delivery dates (as opposed to ASAP). While we will continually strive for 100% compliance with these request dates, how much variance can you typically accept in HP's delivery performance (number of days early, number of days late)?
How do you measure HP's delivery performance? SLA compliance? The degree to which we meet delivery date commitments? Order fulfillment speed?
How is delivery performance measured?
If it is measured, what are the results?
Do the results meet HP's goals and targets?
Do the results meet customers needs?
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The information contained herein is subject to change without notice and is HP CONFIDENTIAL, not to be shared except under HP-approved non-disclosure agreement.
Predictability Approach
Approach to Improve predictability:
Quantify current performance/capability to predict committed delivery dates and meet those commitments
Understand maturity of processes so the businesses can take action to create and sustain effective improvements
Create standard baseline and goals in each region and start driving improvement – Q306
HP Customers can trust that once we make a delivery commitment , they can depend on us to live up to it.
- HP has made significant improvements in delivery performance over the past six to nine months. What delivery performance issues are you still experiencing? How do they impact your business?
- Some orders have requested delivery dates (as opposed to ASAP). While we will continually strive for 100% compliance with these request dates, how much variance can you typically accept in HP's delivery performance (number of days early, number of days late)?
How do you measure HP's delivery performance? SLA compliance? The degree to which we meet delivery date commitments? Order fulfillment speed?
How is delivery performance measured?
If it is measured, what are the results?
Do the results meet HP's goals and targets?
Do the results meet customers needs?
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The information contained herein is subject to change without notice and is HP CONFIDENTIAL, not to be shared except under HP-approved non-disclosure agreement.
Predictability Examples
These are examples that can help root cause and drive performance improvements.
Performance Indicator
Metric Type
Trend or run chart Control chart
Variation or spread of actual ship dates
Control chart and distribution chart
Prioritized issues or challenges
Trend or run chart
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The information contained herein is subject to change without notice and is HP CONFIDENTIAL, not to be shared except under HP-approved non-disclosure agreement.
Conclusion:
Volume Direct Order Cycle Time will continue to improve and become more predictable as we focus on the following priorities:
Area
Recommended offering
PSG roll out to continue through Q206 ISS roll out to continue through Q206 APJ plans to be finalize in Q206
Product transitions
Predictability