2. 1. Low clock speed products would include diamond mining and electricity.
Medium clock speed products would include automobiles and computer operating
systems.
High clock speed products would include and cosmetics and games and toys.
2. Low clock speed affects the product design strategy in that the focus is less on speeding
up product development or postponing differentiation and modularity as it is not that
important for more functional products.
High clock speed affects product design in that the focus is on modular product
architecture since it allows independent development of product subcomponents. There is
also greater weight placed on postponement of product differentiation, sometimes until
demand is realized.
3. Box A-Rice
Box B- Infotainment
Box C-Semi-conductors
Box D- Jewellery
4. Some of the items that are designed to reduce shipping and transportation costs are
products that can be packed compactly and can be packed in great quantities without the
transportation mode reaching weight carrying capacity. These would include fashion
items, such as clothes, shoes and bags. Also included would be products that can be
boxed or placed in containers such as consumer goods such as canned food or other such
groceries. Also included would plastic products that can be easily packaged such as
Tupperware.
5. The proliferation of products, models and options make the supply chain more difficult to
manage in that the great variety of products as they are produced in sequence cause
3. longer lead times. This means that concurrent and parallel processing is necessary. This
then means that the manufacturing process itself has to be modified to be conducive to
such processing and manufacture. Another difficulty may arise in that for each product or
module, different levels of inventory may be necessary and these have to be integrated
into the manufacturing process for each product or model.
6. Some of the advantages for downward substitution include being able to make use of
aggregate forecast for products, which means the forecasts would be more accurate as
they would be aggregated over a larger number of products that would then be
differentiated further downstream, or those products which are already of slight
difference. Another advantage would be that components can be made ready for the
consumer when demand arises but no stock is kept for a specific end product, which
means the available components can be used thus capitalizing on downward substitution,
and thus loss due to obsolescence is less likely to occur.
Disadvantages of downward substitution include that fact that certain products may
require modules that are not of the same quality as the standard modules provide. This
can lead to lower quality products because one of the components was not of the correct
quality. Another disadvantage is that if the components had an error at manufacturing all
the products cannot be assembled thus resulting in a loss of customer satisfaction.
7. One of these industries is the personal computer industry.
8. A modular product would be a cell phone, a television or a watch.
Non-modular products include remote controls or rice products.
A modular process would include the assembly of an automobile
Anon-modular process would include the making of chocolate or ice cream.
9. Standardization strategies help managers deal with demand variability and accurate
forecasts in that by standardizing, the organization can reduce the uncertainty of forecasts
4. by using aggregate forecasting across all the products thereby getting a more accurate
forecast. Standardization helps managers deal with variability in demand in that the
products can be differentiated according to demand at the point of demand by the
customer. In this way, the products that are wanted by customers are the ones assembled
using the component parts which can be used for other products as well.
10. One of the advantages is that the organization may not have the expertise to develop
those new products and in involving suppliers who do, the organization can still continue
with the introduction of the new product but without going through the process of trial
and error that would incur costs. Another advantage is that the suppliers can gain
experience with the new product while the organization continues with its core
competencies. The fact that costs and risk could be separated between the organization
and suppliers is also an advantage.
A disadvantage could be that the organization may lose out on being credited for the idea
alone but also faces the possibility of the innovation getting out too early. Another
disadvantage would be that the organization may not be learning everything about the
product and could thus lose out on further opportunities to innovate
5. CASE STUDY
1. The universal power supply is a postponement strategy because it would mean that the
product would remain the same but it would only be shipped to the relevant market once
the demand has been established for that market, and not through forecast per market.
2. The costs of a universal power supply apart from the actual configuration cost of an
increased $30 per unit could also include the fact that customers may not be aware of the
change and this might affect their perception of ease of use of the product and this might
damage the HP brand name.
The benefit of a universal power supply would be that HP may be able to aggregate its
forecasting over all the product units across all markets thus allowing increased accuracy
in their forecasting. This would then reduce costs of obsolescence of products’ would
also be able to reduce their lead times as well as reverse logistics times if they can merely
move a product from one market to another as opposed to an addition cost and time
consuming processes of reassembly. Another benefit would be that the transportation
costs may then decrease due to reduced movement of products because of reassembly.
Another benefit would be that stock would be available when needed.
3. These cost and benefits would be different over the product life cycle. In the case of the
ramp-up stage. Here the cost that would be of great importance would be that of the
increased price because this may affect customers if there is a great price increase
transferred to them. Although if this does not happen then the cost could be secondary in
this stage.
The benefits of being able to aggregate across markets is of great importance at this stage
as it would allow for products to be moved across markets if stock outs occur. The
reduction of lead times at this stage is of great importance as the product would need to
6. get to consumers speedily as at this stage consumers would be purchasing more of the
new product.
In the maturity phase of the product life cycle cost may not be as strong a cost but
customer perceptions may be.
In this phase the benefits of no reverse logistics would be extremely important as the time
taken to get reorders or products that were returned back to the customer would be
shorter. Reduced cost of transportation would be an important benefit as this would mean
that these costs would not take away from the already reduced profits at this stage of the
cycle.
In the end of life phase the cost overall may not be important.
The benefits of lower cost may be very important as movement of products to other
markets may be necessary.
4. On of the things that HP could consider improving on across their products would be
their forecasting methods. They could also consider further including postponement
strategies within other products that this could be include in. HP also needs an inventory
management system that will not see that having stockpiled inventory and this seeing
increased cost in their storage. For some of their faster selling products HP could
consider using air transportation to reduce lead times and thus increase customer
satisfaction but also potentially move to a more just-in time system that would see their
costs reduced overall. HP could also further integrate suppliers into their system which
could aloe for better communication and thus shorter lead times.
5. My recommendation would be to go with the universal power supply.
