For the people ofHewlett-Packard March-April 1993 Clearing the way for results WlIU1er takes all Fixing HP's bwnpy order-fulfillment system is a high priority for 1993. Helping the future along HP scholarships help encourage students to continue their education. The pioneers from Beijing Pa9·14 10 One Colorado division makes history with its Chinese partners. Can lIP still lead? 12 A former HP employee and Baldrige winner gives HP some advice. From legend to legendary 14 HP's accomplishments in Malaysia have gro impressively since 1972. I am no different; I am a human being 19 How one employee feels about attacks on foreigners in Germany. How well do you know MEASURE history? 20 A puzzling Question in recognition of MEASURE's 30th birthday. One whale of an idea 22 Charles Tung's simple solution revolutionized printing technology. Your turn 25 MEASURE readers share their views on matters of importance. Letter from Lew Platt 26 HP's president and CEO talks about recapturing the HP way spirit. ExtraMEASURE 28 News from around the HP world. MEASURE I,- I .,-~ .. .. ,.' l' Art Director: Associate editors: Graphic designer: CirCUlation: , ." t.' '., :.. " Editor: /. , • 1 \~ r '. Jo' Jay Coleman' Annette Vatovijz Cornelio Bayley Thomas J, Brown Trlcia Neal Chan Belty Gerard' \ ,:_~ " ~ " j I,: MEASURE Is published six times a year for employees and associates of Hewlett-Packard Company, It Is produced by Corporate Communications. Employee Communications Deportment. Mary Anne I , .. , Easley, manager Address correspondence to MEASURE Hewlett-Packard Company. 208R, POBox 10301, Palo Alto. California 94304·1181 USA The telephone number is (415) 857-4144, ( \ r, I "Copyright 1993 by Hewlett-Packard Company. Material may be reprinted with permission l~9J'"It; ( : 'Memtler.lnternational Association of Business Communicators (IABC). • -11'" .. ,.­ Hewlett-Packard Company Is an International manUfacturer of measurement and computotion products and systems recognized for excellence in quality and support, HP employs 93.100 people ~ worldwide and hod revenue ot $16 4 billion in its 1992 tiscal year Pa9·3O *MEASlJRE magazine is pmted on recycled poper 2 MEASURE By Ja.y Colerrw Jl It was a cold, blustery day in Pforzheim, Gennany, last December \-v'hen John Kenny visited Seit.z-a long-time and loyal HP Cllstomer. The Seit.z general manager opened the meeting by writing three letters on a blackboard: E-N-D. "This describes Hewlett-Packard for me," the Seitz G.M. said. "E is for exc:ellent products. N is for nice people. And 0 is for difficult to do business with." Na one laughed. In fact, John, Computer Systems Organization order-fulfillment Winner program manager, and his HP team first talks with HP (directly or indi­ As lIP President and CEO Lew Platt were stunned. Here was a valuable rectly) about specific products and wrote in his January-February 1993 customer giving HP some valuab e-­ ends when the customer receives MEASURE letter, "...our competitors and painful-feedback And the those products and pays the invoice. are using our failures in this area to customer was right. There are dozens of things that can position themselves as 'easier to do It's the 1990s and the rules have go wrong along the path to successful business with' than HP." changed. High~uality, reliable, order fulfillment-and HP statistics In simple terms, there are two competitive products are minimum show that they often do. Many paths that customers can travel to buy requirements. Customer expectations problems are relatively minor-late HP products: increase every day. HP must deliver deliveries, missing pieces, bad docu­ (1) The simpler path is the one products to customers on time and mentation, etc. But others are more leading to the dealer channel. For defect-free every time. It's a challenge serious and time-consuming to fix. All example, a customer wants an HP all companies face today. Companies told, order-fulfillment "rework" costs LaserJet printer. She goes to her local that satisfy customers best will have lIP several hundred million dollars computer store, fmds the product clear advantages. per year. on the shelf and leaves the store HP calls this process order fulfill­ That explains why order fulfillment with the printer in hand. Another ment-that is, the whole chain of is one of only two companywide happy customer. events that begins when a customer Hoshin (breakthrough) goals for 1993. 4 MEASURE Yet, that road has its bumps. If the products sold by HP's direct sales force Later this year HP will begin using HP LaserJet printer isn't available­ -from instruments and computer sys­ a new system called Conquest to and won't be for four weeks-the tems to medical and analytical gem'. speed the task of preparing complex experience can test the fidelity of It's an intricate process. Sales reps system quotations and configurations. even the most loyal HP customers. have to deal with the thousands of If the customer doesn't like HP's What's more, much of the fulfillment HP products, features and support quote-because of the price, the turn­ process happens between HP and the options available. And they have to around time or some other factor­ dealer-invisible to the customer­ be able to get customers to articulate the two parties begin negotiations. If and that can be complicated, too. exactly what they really need. HP can't fully satisfy the customer's (2) The second path-the focus of This fIrst step takes place in an envi­ expectations, HP may lose the sale. If this story-is more challenging. This ronment of mushrooming technology the customer accepts the quote, he or trip usually begins with a meeting and a complex HP product-number­ she gives HP an order. Again, depend­ between an HP sales rep and a custo­ ing system. While simpler orders can ing on the complexity of the order, mer. It typically involves the range of result in a price quote in a matter of it can take HP's internal order-entry 30 minutes, it may take several days process several days to record to produce a quote fOT more complex the transaction. systems configurations. If anything should happen to go wrong at this point-mistakes made Macch-ApriI1993 5 Winner in writing the order, errors in entering things like weather delays, interna­ documents there? Was it packed the order, customers who change tional customs snags, etc. correctly to avoid damage? Was the their order after it's entered, etc.-the Ifall of these steps haven't hap­ equipment installed properly? transaction has to be repeated. pened on time, customers may lose Ifeverything's in order, HP proba­ HP's order-entry system then trans­ their patience and escalate the issue bly has a happy customer-perhaps mits the orders to the factory, or to a within HP. Eventually they may can­ for life, Any mistake may mean that number of factories, depending again cel the order. the customer loses confidence in on the order's complexity. Ideally, the While some shipments go directly HP. Or-worst of all-customers order should move smoothly down to customers, most arrive at a con­ decide that they might want to try the road. But if the factory doesn't solidation point. This often is a third­ someone else. have enough custom computer chips party logistics company that receives, Of course, many of HP's competi­ due to a worldwide shortage; a con­ packages and distributes the complete tors are facing similar-sometimes veyor belt breaks and halts produc­ order the way the customer requested worse-problems in fulfilling cus­ tion; a snowstorm shuts down the it. lIP must ensure that the logistics tomer orders. Who has the best plant for two days-and these things company gets the right information products, technology and processes do happen-the transaction can every time. When the product ships, will determine who wins the order­ be delayed. HP generates and sends an invoice to fulfillment game. Once the factories ship their prod­ the customer. Whatever happened to Seitz, the ucts, the shipments could run into Upon receiving their orders from German company? It's still a loyal, transpOltation delays, especially ifthe HP, customers attempt to reconcile multimillion-dollar customer, John shipments go out on a Friday, the end the order with the packing material to Kenny says, who's encouraging HP ofthe month or the end of the quarter determine: Did the products arrive to improve its processes. Those when shipments are heaviest. And when HP said they would? Is the improvements could translate into that roadblock doesn't even include order complete? Does the equipment a lot more business. work as it should? Are all the right 6 MEASURE Obviously, despite problems with • A worldwide measurement system and meet all commitments. Sales HP's order-fulfillment process, the called QUODEM (QUality in Order people have to interpret customer company does a lot of things well. HP and DElivery Management) tens needs precisely and set appropriate did record $16 billion in revenue in HP how long it takes the company delivery expectations. Sales adminis­ 1992. Great products, however, aren't to complete the order cycle and how tration must enter orders con·ectly. so great if they're late, incomplete, accurate the delivery is. The ambi­ People in logistics need to promote have confusing documentation, etc. tious HP objective is to improve the cross-functional integration. To address HP's order-fulfillment order-fulfillment process tenfold So what does this all mean to HP problems, the company has taken a by the end of fiscal year 1997. employees? Look at the illustration on number of steps: According to Lew Platt, these pages.