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HP realigns global supply chain operations

Brobdingnagian IT vendor HP has announced plans to fully integrate its supply chain, procurement, logistics, order fulfilment and related functions into its various business groups. These functions were previously carried out by HP’s global operations unit.

Brobdingnagian IT vendor HP has announced plans to fully integrate its supply chain, procurement, logistics, order fulfilment and related functions into its various business groups. These functions were previously carried out by HP’s global operations organisation.

HP expects the restructuring to further enhance accountability and streamline operations within the company. The three main operating groups of HP — imaging and printing group (IPG), personal systems group (PSG) and technology solutions group (TSG) — will now have greater accountability over the full range of their operational activities.

Mark Hurd, CEO and president at HP, said: “Under Gilles Bouchard’s strong leadership, HP has transformed our operations on a global scale, increasing customer satisfaction and creating significant cost savings. This realignment will enable us to build momentum while enhancing accountability and enabling greater focus and customisation of operations based on the needs of our customer segments.”

While each separate function previously carried out by the global operations organisation will be integrated into one of HP’s operating groups, it will still retain company wide reach in terms of the services that it provides.

For example, PSG will host central direct procurement and as such will carry out procurement for goods across HP. Similarly, IPG will host the worldwide logistics function and carry out company-wide logistics procurement, freight cost management and customs operations.

This realignment forms part of HP’s efforts announced in July 2005 to simplify the company’s structure, reduce costs and bring a renewed focus on serving customers. These ongoing efforts will result in the overall elimination of 15,300 positions by the end of fiscal year 2006. The realignment of HP's global operations structure is expected to be completed in November 2006.

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