How They Did it: HP Meets the Challenge of a Supply Chain Merger

This is an excerpt of the original article. It was written for the November 2014 edition of Supply Chain Management Review. The full article is available to current subscribers.

November 2014

Supply chain managers are on the lookout for metrics that will allow them to put a number to their progress - or lack thereof. Welcome to KPI's that allow them to demonstrate the quantifiable value that they deliver. At the same time, Murphy's Law may intervene or they may be called upon to put out fires or come to the rescue and make good on the promises sales and marketing have made to customers - regardless of the cost. So, how do you measure success? I hope this month's issue and online bonus feature help you consider how you measure your progress.

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Mergers and acquisitions are part and parcel of business life today. Yes, we celebrate the deal, but there’s a morning after reality: How do we quickly integrate the two companies into one so that we can realize the value of the merger?

Those were some of the big questions facing our team at Hewlett-Packard after the acquisition of 3Com. When the deal was announced in November 2009, Wall Street applauded. But in 2010, after the deal closed, we were faced with how to bring together two distinct supply chains that were managing similar inventories and markets, but using very different strategies to do so.

As the timeline below illustrates (see Exhibit 1), over the next four years, HP consolidated manufacturing and distribution centers—from 25 locations worldwide to approximately half that number today. We adopted a strategy to share inventory, and are in the process of building out a shared business platform for the different supply chain strategies. And we dealt successfully with a big challenge to our supply chain integration—a cultural hurdle that challenged the logic of the integration and tested our creativity.

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