Some HP Government VARs Concerned About Shipment Delays

“There are some blocking and tackling problems with HP’s direct fulfillment mechanisms, and they should be doing a better job,” said Chris Ferry, executive vice president of Technology Integration Group, a San Diego solution provider with annual revenue in excess of $200 million.

HP executives say they have moved to address the issue, which stems from a policy by which HP products sold into the government and education markets are direct-shipped by the vendor to either the customer or the solution provider rather than through two-tier distribution.

Ferry said shipments of desktops and servers from HP can take three to four weeks, while notebook shipments can take six to eight weeks.

“We’ve had some situations where customers get very upset,” he said. “We’ve had to fix it. We are part of the HP agent relationship, and we try to help HP be successful. It’s part of our job to keep the customer happy with HP, but we wish [HP] would execute better.”

Pete Busam, vice president and COO of Decisive Business Systems, a $9 million solution provider in Pennsauken, N.J., agreed. “There are some back-end issues that need resolution,” he said. “It doesn’t seem to be getting any better, and we are getting ready to go into the heavy season for government and education.”

Busam said some orders have taken up to four weeks because HP couldn’t locate the data to process an order. One local fire department that has been buying from HP for 10 years recently ordered $100,000 worth of servers, but the order was delayed because HP couldn’t locate the account’s tax-exempt information, he said.

Mike Coleman, HP’s vice president of sales, public sector, said the problems were due to “an operational transition,” which caused the shipping cycle to slip. “We typically have a 90 percent fill rate of 11.7 days for the order cycle time,” he said. “Due to the operational transition, we lagged for a week or more to 15.1 days.”

Coleman said HP has added significant resources to the operations side of the business in question and has increased training to minimize order-entry errors. He said that as a result, the average fill rate last week was back to 11.7 days for 90 percent of the orders.

“That’s not optimal, but we are [working on] the whole process so that we can continue to improve,” he said.

HP’s PC distributors, meanwhile, were not experiencing any shipment delays, according to executives at those companies.

HP President and CEO Mark Hurd acknowledged the shipping issues in an interview late last month. “We’re not as crisp as we could be on our shipments. We’re getting better. It’s not good enough. I get a ton of partners that are still saying, ‘Hey, you’ve got to close the gap,’ ” Hurd said.

SCOTT CAMPBELL contributed to this story.