Hewlett Packard: The Velocity Factory

The case describes the evolution of the HP Herrenberg plant (Germany) from a rather classical assemble to forecast plant in the mid 90s to a state of the art configure to order plant and describes the different steps in this transformation (product redesign, worker flexibility, and the like). It provides for a discussion on sharp competition in this sector and the corresponding need for industrial excellence (on cost, quality, speed and flexibility). There is a strong tendency to outsource or delocalize production to low labor cost countries. Without truly excellent service to a very demanding customer base there is no hope to keep production in Germany.

The case aims to explain what industrial excellence really means and how it constitutes a fundamental prerequisite for competitiveness in this sector. Without true excellence in operations this factory would have been outsourced or delocalised to low labor cost countries long time ago.