HP SPaM

HP SPaM (HP Inc. Strategic Planning and Modeling) is an internal consulting group at HP Inc. that provides analytical support to HP business units on strategic and operational decisions. SPaM applies methods from operations research, statistics, artificial intelligence, machine learning, and management science to help HP business units address supply chain, operations, and pricing challenges, with the goal of improving revenue, cost, and customer satisfaction.

Established in 1989, SPaM has published work in business and academic journals, and its contribution have been associated with several awards received by HP.

History Contributions

SPaM pioneeredDavis T. (1993) Effective supply chain management, Sloan Management Review, v34, 35-46 and Lee H. L. and C. Billington. (1992) Managing supply chain inventory: Pitfalls and opportunities, Sloan Management Review, vol, 65-73 and http://www.purchasing.com/article/CA195292.html and leads innovation in supply chain and procurement practices. They created dramatic improvements in manufacturing,Feitzinger E. and H. L. Lee. (1997) Mass Customization at Hewlett-Packard: The Power of Postponement, Harvard Business Review, vol, 116-121 http://portal.acm.org/citation.cfm?id=172478 distribution,Johnson, M. Eric and Tom Lofgren (1994) Model Decomposition Speeds Distribution Center Design, Interfaces, vol 24, No 5, 95-106Waller, Matt, M. Eric Johnson, and Davis, Tom, (1999), “Vendor Managed Inventory in the Retail Supply Chain,” Journal of Business Logistics, Vol. 20, No. 1, 183-203.HSOR.org: Case Studies procurement, product design,Olavson T. and C. Fry. (2007) Value Driven Variety Management, Sloan Management Review. Vol 48, No. 1, 63-69 http://www.scmr.com/article/CA629939.html , Cargille B. and C. Fry. (2006) Design for Supply Chain; Spreading the Word Across HP, Supply Chain Management Review, July–August, 34-41, and http://www.purchasing.com/article/CA451858.html forecasting,Kakouros S., D. Kuettner, and B. Cargille. (2002) Measure, Then Manage – improving forecast accuracy at HP, American Production & Inventory Control Society (APICS), October, 24-29 and Burruss J. and D. Kuettner (2002) Forecasting for Short-Lived Products: Hewlett Packard's Journey, The Journal of Business Forecasting, v21, 9-14 metrics,Johnson, M. Eric and Tom Davis (1998), “Improving Supply Chain Performance Using Order Fulfillment Metrics,” National Productivity Review, Summer, 3-16. and inventory controlJohnson, M. Eric, Hau L. Lee, Tom Davis, and Robert Hall (1995), “Expressions for Item Fill Rates in Periodic Inventory Systems,” Naval Research Logistics, Vol. 42, No. 1, 57-80.Johnson, M. Eric, Tom Davis, and Hau L. Lee (1996), “Robustness of Order Reliability Models with Applications to Order Aging,” International Journal of Production Research, Vol. 34, No. 12, 3499-3514.Callioni, G., X. DeMontgros, R. Slagmulder, L. Van Wassenhove, and L. Wright. (2005) Inventory-Driven Costs, Harvard Business Review, March, 1-7, and Cargille B., S. Kakouros, R. G. Hall. (1999) Part Tool, Part Process: Inventory Optimization at Hewlett Packard, Operations Research/Management Science Today, October, 18-24Tay S. and A. Detwarasiti. (2009) Battening down the Hatches, Supply Chain Asia, May–June, 26-28 efficiencies; leading to the publication and adoption of their methods outside HP. Notable contributions include:

Popularizing and helping to drive the adoption of postponement in high-tech products, as a gain in efficiency in building responsive supply chains that support a high variety of product versions (SKUs or stock keeping units) and configurationsFeitzinger E. and H. L. Lee. (1997) Mass Customization at Hewlett-Packard: The Power of Postponement, Harvard Business Review, vol, 116-121 http://harvardbusinessonline.hbsp.harvard.edu/b01/en/search/searchResults.jhtml?userView=CORPORATE&Ntx=mode%2Bmatchallpartial&Ntk=main_search&N=0&Ntt=fetizingerJohnson, M. Eric and Emily Anderson (2000), “Postponement Strategies for Channel Derivatives,” International Journal of Logistics Management, Vol. 11, No. 1, 19-35.

Developing and popularizing the concept of using a single metric to measure the full end-to-end costs associated with carrying inventory, to support better supply chain decisions.Callioni, G., X. DeMontgros, R. Slagmulder, L. Van Wassenhove, and L. Wright. (2005) Inventory-Driven Costs, Harvard Business Review, March, 1-7 http://harvardbusinessonline.hbsp.harvard.edu/hbsp/hbr/articles/article.jsp?articleID=R0503J&ml_action=get-article&print=true

The use of simple, practical spreadsheet tools to deploy the power of advanced statistical inventory target setting to a broad range of businesses.Olavson T. and C. Fry (2008) Spreadsheet Decision Support Tools: Lessons Learned at Hewlett-Packard, Interfaces, Vol. 38, No. 4, July–August, pp. 300-310. http://interfaces.journal.informs.org/cgi/content/abstract/38/4/300

Popularizing the concept of product design for supply chain; leading product development teams to minimize end-to-end costs for design, production, distribution, and support instead of focusing solely on minimizing material costs and development schedules as was previously common practice.Cargille B. and C. Fry. (2006) Design for Supply Chain; Spreading the Word Across HP, Supply Chain Management Review, July–August, 34-41 http://www.allbusiness.com/company-activities-management/product-management/6327517-1.html

Founders

The team was established in 1989Lee, Hau, Corey Billington, and Brent Carter. "Hewlett-Packard Gains Control of Inventory and Service through Design for Localization," Interfaces 23, no. 4 (July/August 1993): pp. 1-11. Members of SPaM discussing their own goals. by Corey BillingtonProfessor Corey Billington (currently a professor at IMD) who had recently joined HP and was working with Sara Beckman (currently a Senior lecturer at UC Berkeley). Billington asked then HP CEO Lew Platt for $100K to start a team focusing on efficiency and inventory within HP. Soon after, Corey added Tom Davis, Paul Gibson, Steve Rockhold, Rob Hall, Marguerita Sasser, and Ed Feitzinger to the team and began a collaboration with Hau LeeFaculty Profiles – Bio Main (then a young Professor at Stanford and currently the Thoma Professor of Operations, Information, and Technology at Stanford Graduate School of Business) and M. Eric Johnson (then an HP employee 1988-1991 and now Professor and Director of the Glassmeyer/McNamee Center for Digital Strategies at the Tuck School of Business at Dartmouth).

The name SPaM came from HP internal location code (LOCXXXX STRAT PLAN MODEL) initially assigned to the group during the days of limited identification fields. SPM and SM were two initial possibilities but the group settled with the more pronounceable SPaM. This was the day before internet era where spam was not yet synonymous with unsolicited or undesired bulk electronic message.

Directors

Corey Billington (1989–1996) Rob Hall (1996–2000) Gianpaolo Callioni (2000–2003) Scott Ellis (2003–2007) Thomas Olavson (2007 - 2011) Brian Cargille (2011 - 2013) Ray Ernenwein (2013 - 2015) Barrett Crane (2015 - 2025) Shabnam Zangeneh-Khamooshi (2025 - present)

Logo

The triangles in SPaM logo represent inventory – the largest asset on the balance sheets of most consumer electronics manufacturers and certainly the largest asset of HP. The blue bell shape represents uncertainty (including bell-shaped normal distribution) which exists in most decision making situations. The combination of the shapes is meant to represent SPaM's intention of using analytics to enable decision making under uncertainty to improve asset management performance.

Inside HP Locations

SPaM supports HP businesses from multiple strategic locations, embedded with HP's various businesses. SPaM's home office is in Palo Alto, HP Inc.'s headquarters;

Services

SPaM employs consulting engagement model where HP businesses pay SPaM for each engagement (project). Key practice areas include:

Supply Chain Strategy and Design Operations Tools and Processes Pricing Analytics

Members

SPaM members are Analytical Business Consultants (ABC) who share strong interests in addressing business decisions from analytical and data-driven perspective.Olavson T. and B. Cargille (2008) OR Inside, OR/MS Today, October. http://www.lionhrtpub.com/orms/orms-10-08/franalytics.html Typical members possess domain expertise as well as consulting and project management experiences from management consulting firms, or companies in their own industries. Most have earned MBA, Master’s, and/or Doctoral degrees in technical fields such as economics, engineering, management science, operations research, science, and statistics. Some individuals who are members of SPaM are also recognized both in the academic community and/or across various industries.

Outside HP Awards

In 2000, Wal-Mart named HP as its Supplier of the Year. HP's innovative supply-chain-management models developed by SPaM helped reduce the retailer's inventory-related stock outs.HP Press Release, January 2000

In 2002, INFORMS gave HP an award for effective integration of Operations Research/Management Science (OR/MS) into organizational decision making, attributed to partnership between SPaM and HP business divisions.

In 2004, HP received Purchasing Magazine’s Company Medal of Professional Excellence. Product design for supply chain and procurement risk management -- two innovations developed by SPaM -- were mentioned as contributions that led to the receipt of this award.

In 2005, design for supply chain and procurement risk management -- innovations developed by SPaM -- were honored by the Council of Supply Chain Management Professionals (CSCMP) as two of the Top 10 Supply Chain Innovations of the Year.

In 2009, HP won the INFORMS Franz Edelman Award, which recognizes outstanding examples of operations research-based projects that transform companies, entire industries, and people’s lives, for its successful product variety management initiatives. The innovations being honored were a result of a collaborative effort between HP Labs and SPaM, which have saved HP more than $500 million between 2005 and 2008.HP Wins 2009 INFORMS Edelman Award for Operations Research Breakthrough

Publications SPaM members have published more than 50 articlessee reference section of this article for numerous examples on the applications of operations research and management science to solve HP business decisions. Many have appeared in widely referenced business journals such as Harvard Business Review and Sloan Management Review. Members have served as an editors to supply chain textbooks used in graduate school programs, and HP supply chain innovations developed by SPaM are cited in many supply chain textbooks.During his time at SPaM, John Neale edited "The Practice of Supply Chain Management: Where Theory and Application Converge https://www.amazon.com/dp/0387240993 Other textbooks citing SPaM innovations include "Designing & Managing the Supply Chain" by Simchi-Levi https://www.amazon.com/dp/0072845538 Brian Cargille, previously the SPaM Director and now the Vice President of Inkjet and Print Solutions at HP, has served on the Editorial Advisory Board of Supply Chain Management Review, an industry magazine, since 2006. Many MBA programs teach techniques created by SPaM members as part of their curricula.Examples include UC Berkeley Haas School of Business MBA 247.1 taught by Professor Artale, the Rutgers School of Management Supply Chain Strategies course taught by Professor Yao Zhao, MIT's Sloan School of Management New Product Development course taught by Professor Dahan, core MBA operations course at IMD taught by Professor Billington, and MGT 472 taught by Professor Dilts at the Owen Graduate School of Management, Vanderbilt University

See also

Strategic planning Management

References

External links