Hewlett-Packard Company Unlocks the Value Potential from Time-Sensitive Returns

Authors:
V. Daniel R. Guide;Luc Muyldermans;Luk N. Van Wassenhove
Affiliations:
Department of Supply Chain and Information Systems, Smeal College of Business, Pennsylvania State University, University Park, Pennsylvania 16802;Nottingham University Business School, Jubilee Campus, Wollaton Road, Nottingham NG8 1BB, United Kingdom;INSEAD, Boulevard de Constance, 77305 Fontainebleau Cedex, France
Venue:
Interfaces
Year:
2005

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Abstract

Hewlett-Packard (HP) and other companies producing short life-cycle products with rapid value erosion squander the opportunity to profit from returned time-sensitive products when they treat them as a nuisance. Instead of focusing on cost minimization and technical quality, they should recognize returns as a value stream and maximize the revenue from smart and fast disposition, proper refurbishment, and prompt resale through the appropriate channels. We worked on a project with Hewlett-Packard's remarketing group to unlock the value potential of time-sensitive returns. We analyzed data using simple calculations to reveal the major drivers and magnitude of potential value recovery, and we used simple operations research flow models to evaluate new design and policy options for the reverse supply chain. HP benefited from an integrated end-to-end business approach to product returns.