d efficiency with HP business with their customers.
Questions for the Case
When offering to many product lines and options that a big company such as HP might face are
A high cost of design, manufacture, and introduce a new product, feature, or option exceed the additional revenue it is likely to generate
The cost associated with too much or too little inventory for such a product, not to mention additional supply chain complexity, and how does all that impact customer satisfaction.
The possible conflict between marketing and operations is that marketing and sales always wanted more, more SKUs, more features, more configurations where as supply chain mangers always wanted less, less to forecast, less inventory and less complexity to manage.
HP combined a team within which would consist of HP Business Group, HP labs and HP strategy Planning and Modeling and also individuals from a handful of consultancies and universities.
Produced an analytically driven process for evaluating new products
Created a tool for prioritizing existing products in a portfolio
Developed an algorithm that solves the problem many times fast than previous technologies, which advancing the theory and practice of network optimization.
Whatis.com defines algorithm as a procedure or formula for solving a problem. An HP Senior Fellow Robert Tarjan has developed algorithms useful in everything from improving chip design to routing telephone calls, from optimizing deliveries in transportation networks to improving searches of large data sets. A software tool Revenue Coverage Optimization (RCO) was been developed that allowed HP to offer customers significantly improved service and at the same time save the company tons of money in improved efficiencies. This tool in 2009 won the Franz Edelman Award, the world's leading prize for excellence in operations research practices. Robert Tarjan has received such major national and international awards as the ACM Turing Award, known as the “Nobel Prize” of computing, the Nevanlinna Prize and most recently, the Blaise Pascal Medal in Mathematics and Computer Science.
