HP Revs Up R&D Efforts

New designs are seen as a way to simplify and cut costs.

Hewlett-Packards purchase of Compaq Computer in 2002 put R&D on the front lines in HPs battle to right itself financially and compete with fellow technology giants such as Dell and IBM.

HP began using product design—a major element of its R&D operations that had been confined to creating individual products—as a strategic tool for managing its broader business issues.

While the company understood its designers could set HPs products apart from competitors by making them more usable or possibly more attractive, it began applying principles of innovation and simplification to help save on costs as well.

Thus far, HP says it has saved millions of dollars through design initiatives such as replacing corporate logos with a single moniker it calls the HP Jewel logo.

Designers also crafted a common rack-mounting system for use across HPs server lines.

The revised racks "cost savings on the supply chain side were in the tens of millions," said Sam Lucente, vice president of design at HP, in Palo Alto, Calif.

Striving for simplicity, whether in designing a PC chassis to be accessed without hand tools, in sharing components or in changing the color of a desktop, can translate to the bottom line.

But designers must still move carefully, said Randall Martin, director of HPs Business PC Design Center, in Houston.

"We dont talk about design for designs stake—saying, Oh, isnt this cool—were actually presenting these design features as customer benefits," Martin said.

"[Often,] when you design for simplicity, youre saving parts. We may leverage a standard stand across our consumer and business [PC] lines. We may leverage a power switch or a drive technology or a keyboard."

Sharing components, for one thing, allows HP to purchase parts in larger quantities, which in turn lowers its costs.

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Getting costs in line has been one way in which HP has been able to lower its prices and compete with the likes of Dell, while still turning a profit, analysts say.

But it could also simplify maintenance by ensuring that different PCs can be repaired the same way and customers can stock fewer spare parts.

HP designers have even examined the companys methods of applying different colors to its PCs.

Instead of painting plastic bezels silver, for example, the designers found that HP could use parts with colors already embedded in them.

The switch removed a process, which helped cut costs, and didnt affect factors such as reliability or performance, which businesses take into account when making purchasing decisions, Martin said.

Even product packaging has come into play. Putting products into smaller packages saves costs by allowing more to fit in a given shipping container.

Thus, when HPs designers created a removable stand for one of its displays, the company cut the size of the packaging and saved nearly $5 per display in shipping costs, Martin said.

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