Slide 14 of 27
Notes:
- Main Point(s)/Script: Cisco has created a virtual factory through networking its supply chain end to end.
- Again, the problem Cisco faced in its supply chain in the early 90s was scaling manufacturing operations in times of massive technology and market change. The market was growing very rapidly and Cisco wanted to move to a Build to Order model for customers
- In response, Cisco has done five things to scale its supply chain cost effectively: it has created a ‘single enterprise’ with suppliers, outsourced manufacturing to key supplier partners, involved partners heavily in New Product Introduction, ensured tha
1. Cisco has created a “single enterprise” and enabled key suppliers to manage and operate major portions of its supply chain in 3 steps:
- It has extended ERP systems to suppliers. By using networked applications Cisco has integrated key suppliers into its production systems
- Second, Cisco has automated routing data transfer using EDI transactions.
- Third, Cisco has developed cross-organizational processes and business models that automated redundant or repetitive processes. For example, it has eliminated the need for purchase orders and invoices to be sent back and forth. Prior to this initiative,
2. Cisco realized that it could never scale its own manufacturing operations at a rate compatible with its growth goals. For example, Cisco's manual testing procedures in the early 90s compromised the integrity of product testing, given uninstitutionali
- Created test cells on its supplier’s line that embodied Cisco’s standard test procedures.
- Ensured that the test cells automatically configure test procedures when an order arrives
- Developed strong supplier partnerships so that suppliers shoulder greater responsibility for quality.
- Demo: Demo and testimonial available
- Transition: Let us examine the next 3 initiatives in Cisco’s supply chain
