| Article ID: | iaor200947202 |
| Country: | United States |
| Volume: | 38 |
| Issue: | 1 |
| Start Page Number: | 51 |
| End Page Number: | 60 |
| Publication Date: | Jan 2008 |
| Journal: | Interfaces |
| Authors: | Nagali Venu, Hwang Jerry, Sanghera David, Gaskins Matt, Pridgen Mark, Thurston Tim, Mackenroth Patty, Branvold Dwight, Scholler Patrick, Shoemaker Greg |
| Keywords: | supply & supply chains |
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.