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    Cisco Systems-The Supply Chain Strategy

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    Aashish Pant
    Cisco primarily outsources its manufacturing to contract manufacturers in order to focus on product design as its core competency. It owned only 2 of 40 manufacturing facilities by 2000. Cisco aimed to ensure quality while outsourcing major portions of the process to reduce costs. However, Cisco's forecasters failed to anticipate a demand shortage, leading inventory levels to rise and Cisco writing off $2.2 billion in inventory in 2001. Cisco's reverse logistics process recovers products from customers and redistributes them, handling 30,000 units and 220,000 pounds of materials recycled per week to generate $100 million annually.

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    Cisco Systems-The Supply Chain Strategy

    Uploaded by

    Aashish Pant
    46 views15 pages
    Cisco primarily outsources its manufacturing to contract manufacturers in order to focus on product design as its core competency. It owned only 2 of 40 manufacturing facilities by 2000. Cisco aimed to ensure quality while outsourcing major portions of the process to reduce costs. However, Cisco's forecasters failed to anticipate a demand shortage, leading inventory levels to rise and Cisco writing off $2.2 billion in inventory in 2001. Cisco's reverse logistics process recovers products from customers and redistributes them, handling 30,000 units and 220,000 pounds of materials recycled per week to generate $100 million annually.

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    channel management of cisco

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    Channel Management

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    Cisco primarily outsources its manufacturing to contract manufacturers in order to focus on product design as its core competency. It owned only 2 of 40 manufacturing facilities by 2000. Cisco aimed to ensure quality while outsourcing major portions of the process to reduce costs. However, Cisco's forecasters failed to anticipate a demand shortage, leading inventory levels to rise and Cisco writing off $2.2 billion in inventory in 2001. Cisco's reverse logistics process recovers products from customers and redistributes them, handling 30,000 units and 220,000 pounds of materials recycled per week to generate $100 million annually.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    46 views15 pages

    Cisco Systems-The Supply Chain Strategy

    Uploaded by

    Aashish Pant
    Cisco primarily outsources its manufacturing to contract manufacturers in order to focus on product design as its core competency. It owned only 2 of 40 manufacturing facilities by 2000. Cisco aimed to ensure quality while outsourcing major portions of the process to reduce costs. However, Cisco's forecasters failed to anticipate a demand shortage, leading inventory levels to rise and Cisco writing off $2.2 billion in inventory in 2001. Cisco's reverse logistics process recovers products from customers and redistributes them, handling 30,000 units and 220,000 pounds of materials recycled per week to generate $100 million annually.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    Download as pptx, pdf, or txt
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    Cisco Systems- The supply chain strategy

    Supply Chain Network

    Outsourced activities of Cisco


    Manufacturing by contract manufacturers.
    It owned only 2 of its 40 manufacturing facilities by 2000. Assembly Product Configuration. Distribution system- Through the network of suppliers,

    distributors, partners, resellers and customers

    Why Outsourcing
    Cisco identified its core competency as Product

    Designing.
    Ensure quality product though major portions of the

    process were outsourced.


    To Reduce manpower cost. To reduce cost of wages.

    Problems
    Cisco entered in a long term

    contract with suppliers.


    Ciscos forecasters failed to

    notice the demand shortage.


    This led to inventory cycle from 53.9 days to around

    88.3 days.
    Write off inventory worth $2.2 billion in May 2001

    Reverse Logistics
    Recovering Ciscos product back from its customers/

    distributors and redeploying them in a way that brings best value to Cisco.
    Create a consistent, scalable, global end to end process

    and system for inbound logistics.

    Ciscos complex supply chain


    Hybrid production model , 95% outsourced.
    Wide range of products. Most products are configured to order. Acquisition Integration (131 till date).

    Approach for reverse supply chain


    30,000 units received each week.

    2,20,00,000 Lbs of material recycled annually.


    $100,000,000 net contribution annually.

    Process Verticals
    Inbound logistics Follow up with customers, Pick up materials from

    customer location. credit.

    Receiving and disposition Manage discrepancy, Provide customer Screening and testing of the products. Inventory management- Synchronization, decrement stock through

    scrap and recycling.

    Order management- Picking and packing Outbound logistics- select transport provider, ship the product.

    Thank you

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