Hewlett-Packard Uses Operations Research to Improve the Design of a Printer Production Line

Abstract

As Hewlett-Packard Corporation installed a system for manufacturing ink-jet printers in Vancouver, Washington, in 1993, it realized that the system would not be fast enough or reliable enough to meet its production goals. At the time, the market for ink-jet printers was exploding, and any incremental printer shipments would translate directly into market share and revenue gains. The company undertook a simulation project to develop recommendations for design changes to improve the system performance but concluded that that project would take too long to be useful. MIT researchers used analytical methods to predict capacity and to determine the sizes and locations of buffers that would increase capacity at the cost of a minor increase in inventory. HP's implementation of this work yielded incremental revenues of about $280 million in printer sales and additional revenues from ancillary products, replacement ink-jet cartridges, media, and related items. Productivity increased about 50 percent, making the assembly of the print engine cost competitive. Finally, HP developed a method of creating rapid and effective system designs in the future.

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