Casestudy on CISCO

Company profile:
Cisco was founded in the year 1984, it is a multinational corporation that designs and sells consumer electronics, networking and communications technology and services. It has a market capitalization of $110 billion. It invests more than $5 billion/year in R&D. It has got 67,000 employees working in 140 countries. It is headquartered at San Jose, California.

INTRODUCTION:
It took about 18 months to build the Reverse Logistics Supply Chain. Built end to end Ciscos Reverse Logistics Supply Chain. On-boarded new partners for collection of complaints, discards and non functional products. Services based Architecture was developed to reduce the time interval for re delivery of rectified products to the corresponding customers and to have a systematic, coordinated, continuous process to deal with the scraps.

Why reverse supply Chain?

To recover Ciscos products back from Customer/ Distributor, and to redeploy them in the way that brings the best value to Cisco. To create a consistent, scalable, global end-to-end process and system for inbound logistics receiving through disposition and fulfillment. To unlock the value of Ciscos discarded products.

Reverse Supply Chains Vision:

To deliver a globally consistent, scalable, world class, end-to-end business solution by unlocking value from Product Returns aiming to Optimize net cash contribution, Reduce transaction cost, Improve customer satisfaction, and Promote corporate citizenship.

Drivers:
Lower Product Return Rate after booking with the help of the returned products via reverse supply chain cisco could find out the reason behind the product being returned and it could rectify that problem and make sure that the problem is not repeated again in other products thus reducing the product return rate. Brand Protection / Gray Market Risk with the help of reverse supply chain Cisco could make sure that its discarded products are returned to the manufacturing unit and it is not acquired by the gray market where it is reverse engineered and resold Value Recovery Opportunities to unlock the value of Ciscos discarded products. Environment sustainability by reverse supply chain Cisco is reducing its waste footprint, thus Cisco helps to maintain a greener planet. Building new Customer Base by catering to the customer complaints Cisco is enabled to create a goodwill among its customers thus increasing customer loyalty because of which they may not switch brands. New customers can also be found as Cisco takes complete responsibility of damaged goods delivered while other brands may fail to do so.

Approach: Scale to Reverse Supply Chain

Volume: 30,000 Units received each week. Social Responsibility: 22,000,000 Lbs of material recycled annually. Value Recovery: $100,000,000 Net Contribution annually in terms of value of product recovered.

Approach: Process Verticals

Inbound Logistics Customer Product Returns Management, Management of product returns in transit to receiving location Inbound On-dock receipt to put away as per disposition instructions Repair order management, Express Test NPIprocess, Shop floor control setup, DGI to FGI conversion. Managing DGI/FGI inventory, Management of Purge/Scrap Process. Point of receipt of order to point of report pick Report pick to actual ship confirm Management of refurbished product shipment from the supplier location intransit to customer location -Outbound

Receiving &disposition Express Screening & Testing

Inventory Management Order Management Order Fulfillment Outbound Logistics

Approach: Reverse Supply Chain

Approach: Architecture design

New Acquuistion warehouse/reject collection depot ERPSystemRMA

CISCO

RMA, Picklist, Like part, Return to stock, Open RMA sync, RMA cancel, product data, Other services Distributor Customer

Approach: Challenges/ Gaps:

Implementation Challenges

1 2 3 4

1.Short Time To Market 2.Evolving Business Model 3.Unavailability of Out Of Box Functionality in Oracle modules 4.New Reverse Logistics Partner On-boarding

Gaps in Oracle functionality 5 1.Like Part Processing 6 2.Pro-Active Asset Recovery Functionality 7 3.Business Rules Driven Supply Demand match engine

SOLUTION:
CISCO installed an ERP service to tackle the gaps in oracle functionality. CISCO had to develop a new and unique reverse logistics route so that its in function supply chain was not burdened with the load of dealing with the rejections/returns. With this reverse logistic route which doesnt intersect or collide with the original supply chain CISCO is able to deal with the marginal time value to rectify customer complaints and return the rectified products to the customer in a very short duration.

Solution Benefits:
Bring new customers into Cisco. Recycling Green Initiative. Improved Process Efficiency. Reduced Transaction Cost By ~ 30%. Enhanced Customer Experience. Improved Process for Product Reuse. CISCO was able to reduce its operating expense by 39% when compared to FY05. The product reuse increased from 5% in FY05 to 44% in FY09. The Reverse Supply Chain rewarded CISCO by contributing $100 million for FY08 as value recovered from discarded non functional products. The Reverse Supply Chain converted the cost centre (dealing with scraps and rejects) which accounted for $8 million in revenues in FY05 to a profit centre. .