The Hewlett-Packard OEM Storage Business provides a range of products, including tape drives and libraries, optical storage and disk arrays. It sells branded, specific configurations of its products to other large Fortune 500 companies in the enterprise computing market. The OEM Customers in turn sell these branded products as part of their product portfolio to their customers. The OEM channel is a classic representation of a virtual extended value chain. The HP OEM Group designs products and develops customer relationships. Every other link and node of the supply chain has been outsourced. Regional nodes in the supply chain execute all the required steps.
"Such an extended chain of partners requires visibility into the supply chain from end to end in order to compress cycle time from contract manufacturer (CM) to customer and increase the velocity of the demand signal," says George Sypher, supply-chain strategy manager for Hewlett-Packard's enterprise systems group.
The HP OEM Group needed an IT solution that would allow them to create a virtual enterprise that closely linked the actual demand from the customers to the actual manufacturing process at the CM. It was also important to automate transactions and provide visibility into current status at all nodes in the supply chain.
According to Sypher, Indura was selected to provide this capability because of its ability to meet the stringent requirements set forth in a competitive bid. The IT solution had to improve the flexibility and the agility of the value chain in terms of fulfilling a fluctuating end-customer demand, as well as reduce the manual effort required to move information back and forth across multiple entities in the extended value chain.
Indura showed that it could provide the ideal scenario for such a virtual network. The product flows continuously and directly from CMs to carriers and regional 3PL warehouses, and ultimately onto the end customer. This flow effectively reduces the inventory assets in the entire value chain. At the same time, the information flow for the different enterprises acts as "spokes" feeding information to the hub and reacts to events generated by the hub.
"The requirement for the hub structure was to be entirely flexible and configurable with the ability to add, change and remove spokes as required by the business," says Sypher.
Perhaps the most rigorous requirement of the HP OEM Group bid package was the need to deploy a fully working portal solution that would enable forecasting, planning and execution across their entire supply-chain network within 90 days. The scope of the phase-one deployment included eight large customers, six CMs and nine logistics providers - all in three different global regions.
According to Sypher, the success of the supply-chain portal set up and deployed by Indura has been remarkable, which is the reason he nominated Indura. For example, the time to perform complex supply/demand matches has reduced from four or five days to one minute.
"Management has gained unprecedented visibility into enterprise operations as a result of the integration of process-centric, business performance metrics," says Sypher. He adds that that the automation process instantly made 100 percent of supply chains visible and fully synchronized. Overall, users have reported over 45 percent productivity gains. "The portal solution from Indura provides visible demonstration of HP Adaptive Enterprise concept and its ability to provide agility in meeting customer and business expectations within aggressive time frames."
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