VI. Short "Collaboration" Case Studies
B. Cisco Systems - Supply Chain "Management by Exception"
1. Cisco Systems, the Internet router company, is also famous for its supply chain
collaboration. Cisco's network of contract manufacturers, component suppliers,
and distributors are linked through Cisco's extranet to form a virtual, just-in-time
a) When a customer orders a router through Cisco's website, the order triggers a
flurry of messages to contract manufacturers of printed circuit board assemblies.
b) Meanwhile, component suppliers are alerted to supply the generic components of
the router, such as a power supply.
c) Cisco's contract manufacturers who make subassemblies like the router chassis and
others who assemble the finished product, already know what's coming down the order
pipe because they've logged on to Cisco's extranet and linked in to Cisco's own
manufacturing execution systems.
d) Soon after the contract manufacturers reach into Cisco's extranet, the extranet
starts poking around the contractor's assembly line to make sure everything is
kosher. Factory assemblers slap a bar code on the router, scan it and plug in
cables that simulate those of a typical corporate network. One of those cables
is a fire hose for Cisco's automated testing software. It looks up the bar code,
matches it to a customer's order and then probes the nascent router to see if it
has all the ports and memory that the customer wanted. If everything checks out
- and only then - Cisco's software releases the customer name and shipping
information so that the subcontractor can get it off the shop floor.
2. That's it! No warehouses, no inventory, no paper invoices, just a very nosy software
program that monitors Cisco's supply chain automatically, in real-time, everywhere,
simultaneously. The chain runs itself until there's a problem, in which case the
system alerts some poor human to get off his duff and fix something. Nothing needs to
be done unless there is something wrong.