HP Scandal Has Connection to Supply Chains -- Really

Loraine Lawson

It wasn't easy, but we found a connection between the most lurid high tech headlines -- the HP boardroom scandal -- and the lowly nuts-and-bolts activities of supply chain management, where the subject of integration is so important.


The straw that broke the camel's back and initiated the HP regime change from Carly Fiorini to Mark Hurd was arguably a supply chain breakdown that led to poor financial performance for HP in Q3 of 2004. And one of Hurd's early coups was the hiring of supply chain genius Randy Mott away from Dell.


Today, HP's repaired supply chain is clearly one of the "solid fundamentals" that financial reporters keep referencing when they speculate the scandal won't affect HP's stock price. (At this writing, it hasn't.)


The moral is that supply chain management (SCM) is important. In fact, according to a recent article from the Wharton Business School, SCM is the only enterprise-scale application that actually contributes to shareholder value. Manufacturers in the Asia-Pacific region (excluding Japan), driven by pressure from China, have pushed IT sales to $56 billion in 2005.


Speaking of China and supply chains, one huge uncertainty is whether the Chinese will insist on their own standard or go with the rest of the world and its EPC global standard.

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