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HP SPaM
HP SPaM Logo
Formation
1989
Type
Internal consulting organization
Headquarters
Palo Alto, CA, USA
HP SPaM (
Hewlett-Packard Strategic Planning and Modeling) is an internal consulting group that supports HP businesses on mission-critical strategic and operation decisions. As evidenced by its publications and awards, SPaM has been a prominent example of the deployment and practice of OR/MS (
operations research and the
management science) in large companies. Together with
HP Labs, SPaM represents HP at the
INFORMS Roundtable, a group of organizations whose purpose is to promote OR/MS excellence in practice.
History
Contributions
SPaM pioneered[1] and leads innovation in supply chain and procurement practices.[2] They created dramatic improvements in manufacturing,[3] distribution,[4][5][6] procurement,[7] product design,[8] forecasting,[9] metrics,[10] and inventory control[11][12][13][14]
efficiencies; leading to the publication and adoption of their methods outside HP.[15] 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 configurations[16][17]
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.[18]
The use of simple, practical spreadsheet tools to deploy the power of advanced statistical inventory target setting to a broad range of businesses.[19]
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.[20]
Founders
The team was established in 1989[21] by Corey Billington[22] (currently a professor at
IMD) who had recently joined HP and was working with Sara Beckman[23] (currently a Senior lecturer at
UC Berkeley). Billington asked then HP
CEOLew 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 Lee[24] (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[25] (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 - 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:
SPaM members are Analytical Business Consultants (ABC) who share strong interests in addressing business decisions from analytical and data-driven perspective.[26]
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.[27]
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.[28]
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.[29]
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.[30]
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.[31]
Publications
SPaM members have published more than 50 articles[32] 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.[33] 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.[34] Many MBA programs teach techniques created by SPaM members as part of their curricula.[35]
^Davis 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
^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
^Johnson, M. Eric and Tom Lofgren (1994) Model Decomposition Speeds Distribution Center Design, Interfaces, vol 24, No 5, 95-106
^Waller, 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.
^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
^Johnson, M. Eric and Tom Davis (1998), “Improving Supply Chain Performance Using Order Fulfillment Metrics,” National Productivity Review, Summer, 3-16.
^Johnson, 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.
^Johnson, M. Eric and Emily Anderson (2000), “Postponement Strategies for Channel Derivatives,” International Journal of Logistics Management, Vol. 11, No. 1, 19-35.
^Lee, 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.
^see reference section of this article for numerous examples
^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
^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
External links
[1][permanent dead link] a Harvard Business Review article in
.pdf form, Building an Innovation Factory, about knowledge-brokering in several organisations, such as
IDEO, which mentions HP SPaM on pages 163 and 164.
[2] a book The Knowing-Doing Gap by Harvard Business School Press which mentions many businesses including HP SPaM (as in Hewlett-Packard's Strategic Planning, Analysis, and Modeling group) for knowledge-brokering management within
Hewlett Packard.