Supply chain Cisco Systems

The supply chain failures grab headlines. Success in the supply chain happens slowly over many years, but when a leader stumbles the impact on the balance sheet is pervasive. Much of the public understanding of supply chain management comes from reading about the failures. When companies with names like Apple, Boeing, Cisco Systems, Coca-Cola, CoirAgra, Hershey, Johnson Johnson, Ericsson, Mattel, Nestle, Nike, PepsiCo, Sainsbury s, and Western Digital make headline news due to supply chain failure, it is hard to not pay attention. Each time these premier brands stumbled, failed, and learned new lessons, the bar on supply chain excellence was raised. 

Between 2000 and 2010, there were many market shifts, and companies found that without the ability to sense and adapt to market conditions, the reliable supply chain was not sufficient. In 2000, Cisco Systems was caught in the downturn of the e-commerce bubble. As a result of not sensing demand changes, the company was forced to write off 2.25 billion in inventory in 2001. This loss taught the company an important lesson. The redefinition of supply chain processes to be more resilient enabled the company to sense and withstand the downturn of the Great Recession of 2008. 

Failure gave birth to supply chain horizontal processes. Today s leaders in horizontal process evolution—Cisco Systems, Coca-Cola, IBM, Intel, Hewlett-Packard, Samsung, and Walmart—all learned the need for horizontal processes the hard way. Each stubbed its big toe and stumbled before learning that bricks matter. 

Figure 1.5 A Detailed Internal Supply Chain (From Cisco Systems, San Jose, CA)...

One company that has recognised the importance of improving supply chain visibility through shared information is Cisco Systems, a market leader in telecommunications and network equipment (see below). 

Cisco Systems, one of the world s leading players in the networking and telecommunications markets, has created a virtual supply chain in which almost all manufacturing and physical logistics are outsourced to specialist contract manufacturers and third-party logistics companies. Only a very small proportion of their 20,000 different stock keeping units are actually touched by Cisco. 

To implement collaboration in a relationship, partners must agree on the purpose of collaboration and means of achieving it. Collaboration may necessitate certain changes in how the companies operate. It should be tailored to specific business processes such as, order placement, order fulfillment, logistics, and payment. Cisco Systems coordinated supply and demand across its supply chain with an intelligent-software for early detection of conflicts and their resolutions (Lee and Whang 2004). 

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