Cisco Systems - The Supply Chain Story

Cisco – The Networked Supply Chain Contd...

In 1993, Cisco installed an Internet based system for its large customers, usually multinational enterprises. The system allowed customers to post queries, about their software problems. Cisco also installed a trigger function called 'Bug Alert,' which sent emails containing information on software problems within 24 hours of their discovery. Encouraged by the success of its customer support site, Cisco launched Cisco Information Online in 1994. This online service offered not only company and product information but also technical and customer support to Cisco's customers.

By 1995, the company introduced applications for selling products or services on its website. The main idea behind this initiative was to transfer paper, fax, e-mail and CD-ROM distribution of technical documentation and training materials to the web, thus saving time for employees, customers and trading partners and besides broadening Cisco's market reach. In 1996, the company introduced a new Internet initiative called the 'Networked Strategy' to leverage its network for fostering interactive relationships with customers, partners, suppliers and employees. Cisco wanted to ensure enhanced customer satisfaction through online order entry and configuration. Customers' order information flowed through the supply chain network, which consisted of Cisco employees, resellers, manufacturers, suppliers, customers and distributors. (Refer Figure I).

Orders from customers were stored in Cisco's enterprise resource planning database and sent to contract manufacturers over the virtual private network (VPN²). Cisco's suppliers could clearly see the order information as their own production schedule was connected to Cisco's ERP system.

According to the requirements, the suppliers shipped the needed components to the manufacturers and replenished their stocks. The business model aimed at enabling Cisco's contract manufacturers to start manufacturing built-to-order products within 15 minutes of receiving an order.

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2] A Virtual Private Network is a private network that is actually part of a larger public network. VPN can be created on the Internet. VPN operates as a private network, accessible only to authorized users.

Case Details

Case Code : ITSY001
Themes: EVA Financial concepts
Case Length : 5 Pages
Period : 1997-2001
Organization : L&T
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Construction - Building Materials & Equipment, Financial Services

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