Harvard Case - HP Canada Co.: A Circular Supply Chain for Recycled Plastic
"HP Canada Co.: A Circular Supply Chain for Recycled Plastic" Harvard business case study is written by Jury Gualandris, Deishin Lee, Cole Beattie. It deals with the challenges in the field of Operations Management. The case study is 13 page(s) long and it was first published on : Mar 19, 2021
At Fern Fort University, we recommend HP Canada Co. implement a comprehensive circular supply chain strategy for recycled plastic, focusing on innovation, supply chain management, and digital transformation. This strategy will involve optimizing manufacturing processes, product development, and logistics to create a sustainable and competitive advantage in the market.
2. Background
HP Canada Co. faces the challenge of incorporating recycled plastic into its product portfolio while maintaining quality and cost-effectiveness. The case study highlights the complexities of sourcing, processing, and integrating recycled plastic into their supply chain. This involves navigating various challenges, including:
- Sourcing reliable and consistent supply of high-quality recycled plastic: The availability and quality of recycled plastic can vary significantly, impacting product performance and brand reputation.
- Developing robust manufacturing processes: Integrating recycled plastic requires adapting existing manufacturing processes to ensure product quality and durability.
- Managing logistics and inventory: The circular supply chain necessitates efficient logistics and inventory management to handle the flow of recycled materials and finished products.
- Communicating the value proposition to customers: HP needs to effectively communicate the environmental benefits and value of using recycled plastic in its products.
Main Protagonists: The case study focuses on the efforts of HP Canada Co. to integrate recycled plastic into its supply chain.
3. Analysis of the Case Study
This case study can be analyzed through the lens of operations strategy, supply chain management, and environmental sustainability.
Operations Strategy:
- Product Development: HP needs to focus on developing products specifically designed for recycled plastic, ensuring quality and performance meet customer expectations. This involves process design, product lifecycle management, and innovation.
- Manufacturing Processes: HP must adapt its manufacturing processes to effectively handle recycled plastic, potentially implementing Lean manufacturing and Six Sigma principles to optimize efficiency and quality.
- Capacity Planning: HP needs to accurately forecast demand and plan capacity for recycled plastic products, considering potential fluctuations in supply and demand.
Supply Chain Management:
- Sourcing: HP must develop a robust sourcing strategy for recycled plastic, focusing on quality control, risk management, and relationship management with suppliers.
- Logistics: HP needs to optimize its logistics network to efficiently manage the flow of recycled plastic and finished products, considering inventory management, transportation, and warehousing.
- Information Systems: Implementing a robust Enterprise Resource Planning (ERP) system and digital transformation can improve visibility and control across the entire supply chain, enabling better demand forecasting, production planning, and inventory management.
Environmental Sustainability:
- Circular Economy: HP's commitment to a circular economy requires a comprehensive approach to reverse logistics, recycling, and reuse of materials.
- Green Operations: HP should implement green operations practices throughout its supply chain, minimizing environmental impact and promoting sustainable practices.
- Communication and Transparency: HP needs to effectively communicate its sustainability efforts to customers, building trust and promoting brand loyalty.
4. Recommendations
To address the challenges and capitalize on the opportunities presented, HP Canada Co. should implement the following recommendations:
1. Develop a Comprehensive Circular Supply Chain Strategy:
- Define clear goals and objectives: Establish specific targets for recycled plastic usage, environmental impact reduction, and cost savings.
- Develop a roadmap: Outline the key steps, timelines, and resources required to implement the circular supply chain strategy.
- Engage stakeholders: Involve key stakeholders, including suppliers, manufacturers, logistics providers, and customers, in the development and implementation of the strategy.
2. Invest in Innovation and Product Development:
- Develop products specifically designed for recycled plastic: Focus on product design that optimizes performance and durability while utilizing recycled materials.
- Invest in R&D: Allocate resources to research and develop new technologies and materials that enhance the use of recycled plastic in products.
- Partner with universities and research institutions: Collaborate with experts to explore innovative solutions for incorporating recycled plastic into products.
3. Optimize Supply Chain Operations:
- Establish a robust sourcing strategy: Identify and vet reliable suppliers of high-quality recycled plastic, ensuring consistent supply and quality control.
- Implement a robust logistics network: Optimize transportation, warehousing, and inventory management to ensure efficient flow of recycled materials and finished products.
- Leverage technology and analytics: Implement advanced ERP systems, data analytics, and digital transformation to improve visibility, control, and efficiency across the supply chain.
4. Enhance Sustainability and Communication:
- Implement green operations practices: Reduce energy consumption, minimize waste, and promote sustainable practices throughout the supply chain.
- Develop a strong communication strategy: Clearly communicate the environmental benefits and value of using recycled plastic in products to customers.
- Promote transparency and accountability: Publish data and reports on environmental performance and progress towards sustainability goals.
5. Basis of Recommendations
These recommendations are based on a thorough analysis of the case study and consider the following factors:
- Core competencies and consistency with mission: The recommendations align with HP's commitment to sustainability and innovation, enhancing its core competencies in technology and product development.
- External customers and internal clients: The recommendations address customer demand for sustainable products and improve internal processes for employees.
- Competitors: Implementing a circular supply chain strategy can differentiate HP from competitors, creating a competitive advantage in the market.
- Attractiveness ' quantitative measures: The recommendations are expected to generate cost savings, improve efficiency, and enhance brand reputation, leading to increased revenue and market share.
6. Conclusion
By implementing a comprehensive circular supply chain strategy, HP Canada Co. can create a sustainable and competitive advantage in the market. This strategy will involve optimizing operations strategy, supply chain management, product development, and digital transformation, enabling HP to effectively integrate recycled plastic into its products while maintaining quality, cost-effectiveness, and environmental responsibility.
7. Discussion
Alternatives:
- Outsourcing: HP could consider outsourcing certain aspects of the circular supply chain, such as sourcing or logistics, to specialized companies. However, this could lead to potential loss of control and difficulty in ensuring quality and sustainability standards.
- Joint ventures: HP could form partnerships with other companies to share resources and expertise in developing and implementing a circular supply chain strategy. This could accelerate innovation and reduce costs but requires careful partner selection and management.
Risks:
- Supply chain disruptions: Fluctuations in the availability and quality of recycled plastic could disrupt production and lead to delays.
- Cost increases: Implementing a circular supply chain strategy may involve initial investments in new technologies, processes, and infrastructure, potentially increasing costs.
- Customer acceptance: Customers may not fully embrace products made with recycled plastic, requiring effective communication and marketing efforts to build trust and acceptance.
Key Assumptions:
- Availability of high-quality recycled plastic: The recommendations assume that HP can access a consistent supply of high-quality recycled plastic to meet its production needs.
- Technological advancements: The recommendations assume that advancements in technology will continue to improve the efficiency and effectiveness of recycled plastic processing and utilization.
- Customer demand for sustainable products: The recommendations assume that customers are increasingly demanding sustainable products and are willing to pay a premium for them.
8. Next Steps
- Develop a detailed implementation plan: Outline the specific steps, timelines, and resources required to implement the recommendations.
- Establish a dedicated team: Create a cross-functional team responsible for driving the implementation of the circular supply chain strategy.
- Pilot projects: Conduct pilot projects to test and refine the new processes and technologies before full-scale implementation.
- Monitor and evaluate progress: Regularly track progress towards achieving the goals and objectives of the circular supply chain strategy.
- Continuously improve: Identify areas for improvement and implement changes to optimize the circular supply chain model.
By taking these steps, HP Canada Co. can successfully implement a circular supply chain strategy that will benefit the environment, enhance its competitive advantage, and contribute to a more sustainable future.
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Case Description
It was June 2020, in the midst of the COVID-19 pandemic, and Frances Edmonds, head of sustainable impact at HP Canada Co., the Canadian subsidiary of HP Inc. (HP), was continuing HP's decades-long pursuit of sustainable impact. HP was now committed to using 30 per cent post-consumer recycled plastic across its personal systems and printers by 2025. However, decreasing commodity prices during the COVID-19 pandemic, global supply challenges, and lowered global collection of recycled content could potentially undermine HP's recycling efforts and goals. Edmonds was considering possible strategic, tactical, and operational actions to cope with the situation and sustain HP's aspirations. Would HP's circular supply chain remain viable and competitive?
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