News release

HP Interactive Tool Helps Manufacturers Strike a Balance Between Lean Manufacturing and Supply Chain Agility

HP introduced an online interactive tool that, for the first time, enables manufacturers to measure their business agility in relation to competitors in real time. The tool was introduced at the National Manufacturing Week Conference held in Chicago.

Based on data HP collected from more than 100 manufacturers from the Fortune 1000, the tool, called the HP Agility Quick Scan, measures manufacturers' agility and evaluates how responsive companies are to 14 internal and external market-driven change-events such as mergers and acquisitions, unexpected sales demand and a shift in the supply market.

"Agility is a leading indicator of a company's ability to react to market changes and increase business performance," said John Madden, practice director, Summit Strategies, a Boston-based IT analyst firm. "So it's important for manufacturers to strike a balance between being 'lean' in order to execute established processes efficiently and 'agile' in order to adequately respond to disruptions in processes both planned and unpredictable."

Agility Quick Scan builds on the HP Agility Index, a qualitative survey that assesses business agility, which the company developed in collaboration with INSEAD School of Business. HP Agility Quick Scan uses quantitative research to measure companies' ability to make changes specific to the manufacturing industry and provides real-world results based upon the agility dimensions of time, range and ease. Understanding agility helps create Adaptive Enterprise environments, where IT and business are synchronized to capitalize on change.

"In addressing cost issues, companies reached levels of efficiency that are fine for a stable environment but cannot always be easily adapted to address business changes," said Todd Taylor, manager, Global Manufacturing and Distribution Industries, HP. "We created the Agility Quick Scan so manufacturers can see where they need to improve their flexibility and where they can exploit a competitive advantage."

Crafted specifically for manufacturing companies, HP Agility Quick Scan is a short survey that companies can complete in 10-15 minutes. The survey asks how quickly, broadly and with how much effort it takes for a company to respond to the change events.

Upon completion of the Agility Quick Scan, businesses receive:

• A Performance Scorecard - high-level benchmark report, which compares an organization to its industry average and the aggregate of the data collected from 100 Fortune 1000 companies;



• Information on related solutions from HP including Supply Chain Operations Research or SCOR-based services for supply chain efficiency and Design Chain Operations Research or DCOR-based services for product development excellence;



• The opportunity to qualify for the Agile Enterprise Study, which measures the agility of business processes relevant to internal and external change events. (This in-depth survey requires approximately 25 hours to complete.)

The HP Agility Quick Scan is available at http://www.hpagility.com.

About HP

HP is a technology solutions provider to consumers, businesses and institutions globally. The company's offerings span IT infrastructure, global services, business and home computing, and imaging and printing. For the four fiscal quarters ended Jan. 31, 2005, HP revenue totaled $81.8 billion. More information about HP (NYSE, Nasdaq: HPQ) is available at http://www.hp.com.

This news release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they ever materialize or prove incorrect, could cause the results of HP and its consolidated subsidiaries to differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including the expected development, performance or rankings of products or services; statements of expectation or belief; and any statement of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the development, performance and market acceptance of products and services and other risks that are described from time to time in HP's Securities and Exchange Commission reports, including but not limited to HP's Annual Report on Form 10-K for the fiscal year ended Oct. 31, 2004. HP assumes no obligation and does not intend to update these forward-looking statements.