Hewlett-Packard (Canada) Ltd. has opened a new PC manufacturing facility in Toronto that executives said will help the company reduce order/delivery cycle times by 78 per cent.
Lloyd Bryant, vice-president and general manager, Personal Systems Group, HP Canada, said before the facility the subsidiary
had an order-to-delivery cycle time of 15 to 25 days. With this facility, that cycle time has been reduced to five to eight days.
The move is expected to help HP Canada’s distribution partners Ingram Micro, Tech Data, Synnex Canada and Multimicro, Bryant said.
“”This is a level one manufacturing site and we are building PCs in Canada. It gives us a competitive advantage, reduces order cycle times and puts us in a better position with inventory and helps to reduce mutual inventory costs across the value chain,”” he said.
Inventory is a significant cost, Bryant added. When orders come in, HP Canada would ship PCs to distribution. If a customer changed its mind, HP and the distributor would be stuck with inventory no one wanted.
“”We can now decrease inventory in the channel on finished goods. We can drive cost out of the model and have increased flexibility,”” Bryant said. “”It’s easier with a local site to reconfigure (PCs) based on customer demand.””
Murray Wright, president of Ingram Micro Canada, cited improved inventory management as the biggest gain from a distribution perspective.
“”The pressure is on margins in the marketplace, and inventory management become crucial to improving HP’s delivery,”” he said.
Wright said improved inventory management will also give everyone an opportunity to maximize working capital better, especially if HP can reduce its order/delivery times.
HP’s PC facility has been in operation only a month and has already produced 10,000 D530 commercial business desktops. The D530 comes in three models: small form factor, convertible mini-tower or ultra-slim desktop.
HP Canada, currently the market share leader in PC sales this quarter according to IDC Canada figures, will not use this new facility to manufacture PCs for outside of the country.
Bryant added, the new facility will help the subsidiary go after incremental business, but that was not part of the original business case for the manufacturing plant. “”Any incremental business is pure upside,”” he said.
Wright said the important message is time to market, and HP is focused on that. “”If they can shorten delivery cycles it will help them and will benefit distribution and the reseller,”” he said. “”Will they take more market share away from Dell? Well, we’ll have to wait and see,”” Wright added.
