HP Inc looks to address supply chain issues

HP Inc is aiming to become a more predictable vendor partner with a new strategy to improve its resiliency, agility and visibility, while also moving away from the historically lean supply chain.

Speaking at the HP Amplify Executive Forum in Dubai, HP’s recently appointed chief supply chain officer Ernest Nicolas detailed the vendor’s game plan to create a more consistent supply for both channel partners and customers.

Hired earlier this year, Nicolas joined HP from Rockwell Automation, where he was also chief supply chain officer. He also worked in a number of supply chain roles at car maker General Motors prior to that.

“It’s been a challenge over the last three years - I don’t know that we’ve seen a supply chain environment that has been as chaotic as the last couple of years and I don’t know that we’ll see that again in our careers,” Nicolas said.

“Even prior to the pandemic, there were a lot of macroeconomic challenges, and some significant ones. They already started to tell us that we had to shift away from what has historically been this lean supply chain mindset. And when I say lean supply chain, the supply chain that's ultimately configured and optimised for cost.

“As we move forward now into the pandemic, what we’ve had to realistically look at is resiliency - how do we mitigate against potential points of failure?”

Nicolas added resiliency has to be looked at as insurance to be mitigated against challenges within the supply chain.

“Resiliency is a response that is being somewhat reactive, but when I think about the assurance of supply initiatives that have been kicked off within [HP] to try to secure difficult components, those have been very aggressive and very significant.”

HP has also done work on network optimisation, looking at where the company is positioned in terms of distribution, where it is positioned in terms of distribution, manufacturing and where suppliers are located.

The company has also put some thought around single source components, particularly with semiconductors. “In today’s day and age you've got to shift, and there's been a lot of work on being more multi sourced and looking at redesigns where feasible,” Nicolas added.

With resiliency as a form of defence, Nicolas said agility would be like going on offense, including digital transformation for supply chains, with SAP S4 HANA at the foundation. However he said that transformation is just an enabler and HP should also define its strategy on what it wants to be as a supply chain, and to define its supply chain to become a competitive advantage.

“That’s kind of the next step - how do we think about being more agile? How do you think about supply chain agility? We align it to who we want to be as a company and who we want to be from a supply chain perspective. And then we start working toward that,” he said.

“So I think there's an opportunity there for us, by all means, especially the transformation of companies undergoing right now.”

Nicolas also admitted there’s a concern about HP’s predictability, specifically as relates to lead time, on-time delivery and more, and that there is an opportunity.

“We’ve got to step back and look at our supply chain and start to shore up the different facets of our supply chain,” he said.

“It starts with our supply base, it goes through our manufacturing house and onto distribution. We can give visibility or enabled visibility now, but it's bad data being propagated into your supply chains. We've got to shore up those different areas within our supply chain, and as we do that, we'll be more predictable.

“There's adjustments we've got to make in alignment with agenda resiliency, and as we do, we’ll then be able to be more predictable and be able to share that information accordingly. So be patient, we've got some work to do - I don’t say be too patient, still put pressure on us.”

Nico Arboleda attended HP Amplify Executive Forum as a guest of HP Inc.