HP to optimize supply chain in cost saving drive

25 May 2012

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25 May 2012 | Adam Leach

Technology firm HP will leverage spend across its international operations to drive cost savings with suppliers and in transportation.

The company, in a statement published yesterday, said in addition to the $3 billion to $3.5 billion (£1.9 billion to £2.2 billion) in savings it expects to get from restructuring plans - which will also cut 27,000 jobs equivalent to eight per cent of its global workforce - it will look for further savings in its supply chain operations.

“HP expects to achieve additional savings from non-headcount cost reductions, including supply chain optimization, SKU and platform rationalisation, go-to market strategy simplification and business process improvement,” the statement said.

A spokesman for HP told SM the business plans to leverage its spend across its global operations. “It’ll be things like combining different business groups of HP to use the same parts of the supply chain. Which could be anything from suppliers and leveraging [what] they’re buying, to transportation or warehousing. It’s that kind of integration we’ll be looking for,” he said.

Announcing the restructuring and cost saving, HP CEO Meg Whitman, said: “These initiatives build upon our recent organisational realignment, and will further streamline our operations, improve our processes, and remove complexity from our business.”

The job cuts will span across the companies’ global operations and will impact a number of departments, but the firm has not confirmed where the losses will take place. HP will be offering early retirement to some staff.

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