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Procurement Risk Management (PRM) at Hewlett-Packard Company

Author

Listed:
  • Venu Nagali

    (The Procurement Risk Management Group, Hewlett-Packard Company, Houston, Texas 77070)

  • Jerry Hwang

    (The Procurement Risk Management Group, Hewlett-Packard Company, Houston, Texas 77070)

  • David Sanghera

    (The Procurement Risk Management Group, Hewlett-Packard Company, Houston, Texas 77070)

  • Matt Gaskins

    (The Procurement Risk Management Group, Hewlett-Packard Company, Houston, Texas 77070)

  • Mark Pridgen

    (The Procurement Risk Management Group, Hewlett-Packard Company, Houston, Texas 77070)

  • Tim Thurston

    (The Procurement Risk Management Group, Hewlett-Packard Company, Houston, Texas 77070)

  • Patty Mackenroth

    (The Procurement Risk Management Group, Hewlett-Packard Company, Houston, Texas 77070)

  • Dwight Branvold

    (The Procurement Risk Management Group, Hewlett-Packard Company, Houston, Texas 77070)

  • Patrick Scholler

    (The Procurement Risk Management Group, Hewlett-Packard Company, Houston, Texas 77070)

  • Greg Shoemaker

    (The Procurement Risk Management Group, Hewlett-Packard Company, Houston, Texas 77070)

Abstract

Supply chain risks related to product demand, component cost, and availability uncertainties can have a significant impact on a manufacturing company's revenue and profits. The Procurement Risk Management (PRM) Group at Hewlett-Packard (HP) developed and implemented a mathematical model, business process, and software to measure and manage supply chain risks on the procurement side. In 2006, the software-enabled business process helped HP to manage over $7 billion in spending; this resulted in material-cost savings of $128 million. Over the past six years, HP has realized more than $425 million in cumulative cost savings using the PRM approach.

Suggested Citation

  • Venu Nagali & Jerry Hwang & David Sanghera & Matt Gaskins & Mark Pridgen & Tim Thurston & Patty Mackenroth & Dwight Branvold & Patrick Scholler & Greg Shoemaker, 2008. "Procurement Risk Management (PRM) at Hewlett-Packard Company," Interfaces, INFORMS, vol. 38(1), pages 51-60, February.
    • Handle: RePEc:inm:orinte:v:38:y:2008:i:1:p:51-60
    DOI: 10.1287/inte.1070.0333
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    References listed on IDEAS

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    1. James Schummer & Rakesh V. Vohra, 2003. "Auctions for Procuring Options," Operations Research, INFORMS, vol. 51(1), pages 41-51, February.
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