Content
1 Introduction 3
2 How do we reduce the instances of product returns? 3
3 Does it make sense to engage in remanufacturing related activities? 7
4 What can be done to maximize value recovery? 8
5 How do we market the remanufactured products? 9
6 Amendment 1: Products returns by category 10
7 Amendment 2: List of failures and assumed difficulty 10
8 Amendment 3: Layout of Return Depot 11
9 List of Abbreviations 12
10 References 12
1 Introduction
Hewlett Packard (hp), founded in 1939 in Palo Alto, offered a wide range of computing and imaging solutions and services for business and home consumers. With sales revenues of $42.4 billion and net earnings of about $3.1 billion in 1999 hp was the 13th US company on the Fortune 500 list.
The case study deals with the product returns at hp for the Inkjet Product Group. Taking six lines of inkjet printers into account, over 50,000 units per month were returned in 1999 only in the US. Due to this huge amount of returns hp reversed $157million in revenue and spend another $50 million on handling those returns.
This averaged the return rates for North America to over 6% of sales, compared with less than 1% in the rest of the world. Recent trends show an increase of 20% per year in terms of units returned.
Based on the huge amount of costs and loss of revenue involved, hp needs to develop a strategy to reduce the losses due to returns and recover maximum value from the returned products.
Hp formulated a two-pronged strategy plan, while focusing on all activities related to returns as a business itself. First, reducing the returns in percentage of sales by looking on the root cause of returns, policy changes and forcing channel partners. Second, reducing the cost per unit shipped by improved management of the process and network optimization.
Within this assignment I will present my opinions to the following questions:
How do we reduce the instances of product returns?
Does it make...