HP's PC supply chain by the numbers

HP's PC supply chain by the numbers

Summary: Here's a look at Hewlett-Packard's supply chain by the numbers and the work in progress to become more efficient.

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Hewlett-Packard's supply chain is a competitive advantage as the company aims to press its vast economies of scale. That said, HP's supply chain is very much a work in progress.

Tony Prophet, senior vice president of HP's global supply chain operations for its personal systems group unit, spoke Wednesday at an RBC Capital Markets investment conference.

Prophet's talk focused on HP's supply chain and how the company has worked to become more efficient. The transcript of the chat was notable---at least for a supply chain wonk---because it shed light on the moving parts of HP and how the company gets goods from point A to B.

Here's a look at HP's supply chain by the numbers courtesy of Prophet:

$60 billion: Sum of purchases for what Prophet calls "the world's largest IT" supply chain. That tally includes components, logistics, transportation, warehousing and services associated with the supply chain.

2: Number of PCs produced or shipped every second. Two printers are also produced or shipped every second.

15 seconds: Time it takes HP to produce or ship a server.

$50: Supply chain costs related to a PC. Prophet says supply chain costs refers to "transformation," or manufacturing, and items like transportation and duties. The cost of manufacturing and transformation in a PC is now less than the cost of memory in a computer.

70 PC supply chain sites following the HP-Compaq merger. Prophet explained that these sites---known as nodes---had inbound and outbound hubs, unique IT connections and overhead to manage the network.

30 supply chain sites in 2009 after HP whittled down its PC supply chain complexity. Prophet said: "You can see that more than concentrated in more competitive locations, cost locations. You can't see that few of them are Company-owned. And this is a blend of factories that HP owns and partner factories. But few of them are company-owned."

4 for 4: The number of so-called BRIC (Brazil, Russia, India and China) countries where HP has manufacturing capacity. Prophet said HP has expanded capacity in Brazil; India, where HP owns a facility; Russia with a plant launched this year; and China, where HP has a factory in Shanghai and western China.

2 years ago: That's when HP decided to start building plants in western China. By moving inland, HP had better access to labor, lower costs and proximity to a growing market. The first aim of this plant, which primarily makes notebooks, is to make PCs for China in China.

2: Links needed to export from China. HP is planning to export to other markets from that Western China facility. Prophet said:

We're going to work on a rail-sea link to move by rail on a relatively expedited basis to the port in Shenzhen and then by sea to the various harbors of Long Beach and Rotterdam, etc. And the second link is an air link. Air terminals that are being built (with) an expanded runway, long enough for 747 freighters that positions us to export by air or by sea from Central China.

20 days: Transit time by ocean, port to port, for a notebook made in China to hit the port at Long Beach, Calif.

39 to 40 days: Transit time by ocean, port to port, for a notebook made in China to reach Rotterdam, The Netherlands. 3 to 4 days: Time it takes for that notebook to go from a China manufacturing facility to the U.S. or Europe (including customs clearance).

450: Total supply chain nodes HP has if you were to combine the PC supply chain and distribution points with the imaging and printing business. That supply chain tally covers everything from shipping points to manufacturing facilities, warehouses and other items. Related: HP's supplier list. 10 hours: Interval between fully loaded flights of HP products out of Shanghai. This airfreight is carried on 747-400 freighters.

80 percent: That's the percentage of industry standard components in HP's industry-standard servers.

Mid- to high 90 percent: That's the percentage industry standard parts in an HP PC.

1000s: Number of rough processes in HP's supply chain across its various businesses.

25 percent: Percentage of HP supply chain processes that are shared between all supply chain activities today.

More: HP news and whitepapers and HP's supply chain sustainability report.

Topics: Enterprise Software, Hardware, Hewlett-Packard, Software, China

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17 comments
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  • Message has been deleted.

    yarinsiz
    • RE: HP's PC supply chain by the numbers

      The first aim of this plant, which primarily makes notebooks, is to make PCs for China
      Linux Love
      • RE: HP's PC supply chain by the numbers

        Ditto any U.S. airport, and even many restaurants and bars. The notebook computer has become the symbol of the current always-on business generation, and is fast becoming a necessity in corporate life.
        Linux Love
      • RE: HP's PC supply chain by the numbers

        like most consumer electronics these days -- are manufactured half a world away in China.
        Linux Love
      • RE: HP's PC supply chain by the numbers

        This alone does not raise eyebrows; what's interesting about the notebook supply chain is the fact that many of the players for these high-tech products rely not on technology at all, but rather on personal relationships, to get the job done.
        Linux Love
      • RE: HP's PC supply chain by the numbers

        This research study is one of several commissioned by CAPS designed to get beyond the headlines and to help business executives understand how to do business in China.
        Linux Love
      • RE: HP's PC supply chain by the numbers

        This report has many useful insights for other industry verticals," said CAPS Director Philip Carter, a professor of supply chain management at the W. P. Carey School.
        Linux Love
      • RE: HP's PC supply chain by the numbers

        We were interested in discovering how information technology is affecting the way companies do business in China
        Linux Love
      • RE: HP's PC supply chain by the numbers

        where they are balancing the age-old notion of guanxi (a network of close interpersonal relationships) with technological advances, says William Foster, a research scientist with the Institute for Next-Generation Internet and co-author of the study.
        Linux Love
      • RE: HP's PC supply chain by the numbers

        Production of notebook PCs is largely concentrated in one small area within an hour of Shanghai, China, and spearheaded by Original Design Manufacturers (ODMs) that are owned and managed by the Taiwanese.
        Linux Love
      • RE: HP's PC supply chain by the numbers

        Flagship" PC companies such as Dell, Apple, HP, and Gateway contract with Taiwanese ODMs to design and manufacture laptops.
        Linux Love
      • RE: HP's PC supply chain by the numbers

        In turn, ODMs work with a group of third- and fourth-tier suppliers to source various computer parts and components.
        Linux Love
      • RE: HP's PC supply chain by the numbers

        Dell, for example, has its ODMs manufacture the motherboard, while components such as the hard drive and the monitor are put on in a separate factory," says Foster.
        Linux Love
      • RE: HP's PC supply chain by the numbers

        The ODM will partner with a third-tier supplier that manufactures connectors, for instance, and that third-tier supplier will source wire for its connectors from a fourth-tier supplier, he explains.
        Linux Love
      • RE: HP's PC supply chain by the numbers

        This multi-tiered supply chain has worked well for the flagship PC companies, providing production cost advantages and allowing them to reduce research and design budgets by leaning on the Taiwanese<a href="http://ipadbagblog.com/"><font color="light&height"> ipad bag blog</font></a><a href="http://www.sutudeg.org/"><font color="light&height"> sutudeg </font></a> <a href="http://wposfv.com/"><font color="light&amp;height">education news</font></a> and experts.
        Linux Love
  • Message has been deleted.

    cstrathmore
  • RE: HP's PC supply chain by the numbers

    Great that Hewlett-Packards supply chain by the numbers and the work in progress to become more efficient.
    Spammers Killer