The re‐engineering of Hewlett‐Packard’s CD‐RW supply chain

Technological innovation is a major driver in the consumer electronics industry, bringing consumers exciting new products more quickly and at lower cost than ever before. However, technological innovation alone cannot deliver competitive advantage to manufacturers, no matter how large their scale or scope. Delivering innovative new products quickly and at competitive prices requires an efficient and effective supply chain, in which inventory is minimalised but without the loss of responsiveness that is essential in such a dynamic market. Hewlett‐Packard’s experience with its CD re‐writer is a classic case of an existing supply chain infrastructure failing to support the commercial exploitation of technological innovation. Their experience demonstrates graphically the importance of a supply chain design in keeping with market requirements. The results of their supply chain analysis illustrate the significant benefits of centralized distribution and the implementation highlights the importance of project management and the incentives for change amongst supply partners.