The top of our top-performing supply chain management list is a business that incorporated their own ecosystem to stay on top of their rapidly growing demand. Ranking at number one, Cisco Systems showcases the effectiveness of this system, as it continues to enable the remarkable success of their operations.
Gartner’s list of top-performing supply chains aims to inspire and educate our community on success themes and innovations that have allowed these businesses to support their respective growth. We’ve previously explored 24 companies who have managed their supply chain to an excellent standard, and it’s time to explore the winning supply chain of 2021, Cisco Systems.
Cisco Systems has proven to the world once again that they’ve got a lot to teach, not only because of their supply chain transformation but their ability to sustain its new growth. Cisco develops network devices, and as we know of the modern world, the scale of connection has grown exponentially – asking network companies to grow with it or be left behind.
Cisco Systems rose to the challenge by completely transforming their supply chain and developing a supply ecosystem – it became its own entity of connecting partners, suppliers, customers, and employees. The electronic network system is fully scalable to support Cisco’s growing demand and new ventures.
Excelling in nearly all of the Gartner success themes, Cisco has earned the top spot through their demonstrated revenue growth, prominent leaders in the community, and strength in ESG activities.
Consider the idea of e-business as an electronic platform for information sharing within an organization and supporting a range of business processes, like many of us use today. Now, reflect on what a supply chain is at its most basic – a network of operations, facilities, carriers, and customers that procure materials and deliver finished products. Cisco leadership traced the two and saw the prosperous opportunity in creating an ecosystem for their supply chain network called Cisco Manufacturing Connection Online (MCO).
The MCO application leverages the productivity and efficiency of the supply function, which all parties can view on the Cisco supply chain portal that connects contract manufacturers, distributors, and logistics partners to Cisco. It also lowers the cost of communication between any parties within the supply chain and enables faster and more accurate information exchange.
The core of the MCO application consists of a three-part strategy to help suppliers cost-effectively scale as needed:
- Automated testing: Cisco developed and installed technology to perform automated tests on production lines and configure test procedures for each customer order. They manage to save time and money on reactive testing while controlling the quality of production.
- Direct order fulfillment: The company launched a global direct shipping and fulfillment system, where most manufacturers can ship directly to customers. Direct shipping saves inventory carry costs and order processing time and reduces errors by eliminating a supply chain step.
- Dynamic replenishment: The connected portal links directly to suppliers, so Cisco gains real-time access to supplier information and uses this information to instantly determine replenishment options, saving delivery times and reducing errors and inventory storage.
As a whole, this connected system means that Cisco can continuously scale by increasing their outsourced partners and link them straight into the system to streamline their operations for Cisco.
Cisco’s upstream supply chain outsources most of its manufacturing and logistics to increase production capacity and make it scalable to their demand. Cisco suppliers provide 100 percent of their components, including 90 percent pre-assembly of their final products.
This vast amount of outsourcing has resulted in Cisco multiplying their output by a factor of four without developing any new infrastructure. Typically, outsourcing comes with a lack of visibility and can leave companies vulnerable, which Cisco combated with their connected network mentioned above.
Like the MCO, the COO is a virtual portal storing information of Cisco’s planning databases and provides the ability for customers, resellers, suppliers, and partners to communicate and receive information. The COO is the primary channel for customer contact, which means data and information can feed directly into the Cisco Systems supply chain decision-making.
The benefits of COO were immense for Cisco, significantly improving the customer experience and supplier relationships through the following:
- COO includes a virtual marketplace where customers can shop online, enabling a smooth ordering process with efficient technology.
- Cisco’s sales teams gain immediate access to critical information about the status of orders, preventing billing and shipping issues before they arise.
- Self-service customer service delivers the instant ability for customers to resolve their non-technical issues.
- When there are technical issues, customers and partners are met with online answers and arrive at a timely resolution to finish placing an order or resuming their operations.
We’ve touched upon three major components of Cisco System’s effective supply chain management, but there is a whole world of intricacies involved in their global operation. Creating their own web platforms and portals is a strikingly challenging and ambitious task to streamline the Cisco Systems supply chain. Yet, as a company trying to keep up with the demand of a connected world, they were aware they needed a transformative approach.
Creating the CMO and COO systems to connect their supply chain operators seamlessly and their customers with their supply chain is a remarkable feat and may inspire businesses with a similar capacity. The effectiveness of these platforms has meant that their supply chain can scale while increasing their success, which is evident from their performance and number one ranking on our list of top performers. Well done, Cisco.