WW DIRECT CUSTOMER ADVISORY COUNCIL: Your Topic Title HereWW DIRECT
CUSTOMER ADVISORY COUNCIL:
Order to Delivery
October 2005
*
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
*
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
*
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
*
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.
*
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
*
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):
*
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
*
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
*
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
*
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)
*
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
*
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
*
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?
*
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?
*
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
*
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