As many of our Supply Chain Matters readers are aware, the July 4th holiday in the U.S. is a big one. Not only is it the annual celebration of U.S. liberty and independence, complete with numerous concerts, picnics and fireworks demonstrations, the holiday serves as the symbolic kickoff to summer vacation and other family-based activities.
The first two weeks in July is often a period when firms take the opportunity to shut down or scale-back operations to refit or perform major maintenance on manufacturing and other equipment as well as IT applications and systems.
One high tech and consumer electronics manufacturer that will be very busy this summer is that of Hewlett Packard which is in the key preparation stages of splitting the former company into two equally sized companies on November 1st. One company, Hewlett Packard Enterprise Company will oversee operations of the now HP Enterprise division, A $55 billion dollar entity. The other, HP Inc., will oversee operations of the now HP Printer and PC divisions, of equivalent revenue size.
The HP split involves separating balance sheets, facilities, IT systems and applications, including those related directly to the support of HP’s end-to-end supply chain. Purchase agreements among various suppliers must to recast foe each new company along with various special agreements. HP operations currently span 600 locations in 170 countries.
The split comes in the midst of massive headcount reductions that have already occurred across many business and functional groups.
Supply Chain Matters has featured prior commentaries related to the risks in splitting-up HP’s vast and complex supply chain ecosystem of suppliers and manufacturing partners. Most important was the global buying scale of a singular HP that was constantly leveraged among suppliers.
Management of the upcoming split is being overseen by a 500 person Separation Management Office that includes key executives that will make-up both split companies, including HP’s current CIO.
This week, The Wall Street Journal featured an interview of HP CIO Scott Spradley, who described a complex surgery analogy for separating various IT systems. Keep in-mind that HP is primarily supported by an SAP ERP and Business Suite infrastructure and applications backbone. According to the report, HP is about to initiate a global network of IT command centers designed to keep operations humming amid the combined $1.8 billion restructuring effort. The report cites the closing of 2600 internal computing programs that include those supply chain related.
Another sudden twist to this ongoing story comes from today’s WSJ which reports that the executive tasked with leading the HP Separation Management Office announced his departure from HP this week. According to the report, this was an unanticipated setback in what so far has been a smooth transition process.
Obviously it is going to be a rather busy summer across the many halls of HP, particularly the halls of the company’s combined and soon to be separated supply chain ecosystem of suppliers and supply chain support teams.
In the meantime, we extend best wishes to all of our U.S. based readers for a joyous and safe 4th of July weekend.