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© 2007 Cisco Systems, Inc. All rights reserved. Cisco Confidential 1
Supply Chain Risk Management – Chengdu EQ Lessons Learned
John O’Connor
Erica Agiewich
© 2007 Cisco Systems, Inc. All rights reserved. Cisco Confidential 2
Crisis Management
The Manufacturing Crisis Management Team (MCMT) is a cross functional team to preserve continuity of supply to customers in the event of a supply chain disruption
Objectives: Ensure continuity of supply to customers
Optimize operational recovery through effective coordination of MCMT functional teams and members for internal or external disruptions
Provide critical supply chain business continuity planning data and documents and analysis
Support theater, corporate and executive crisis management teams as necessary
© 2007 Cisco Systems, Inc. All rights reserved. Cisco Confidential 3
MCMT Activation & Resolution Process
1. Event Notification (NC4, SSBR, news, employees or [email protected])
2. Log Event in Crisis Dashboard
3. SCRM Team Event Assessment (sites, revenue)
4. Activate MCMT Incident (L0-L3)
5. Alert MCMT Members (meet as needed)
6. Incident Resolution
Valid SC Risk? YES
© 2007 Cisco Systems, Inc. All rights reserved. Cisco Confidential 4
Day 1
Initial NC4 notification on Sunday night (steps 1-2)
MCMT incident created Monday morning based on initial mapping of 8 sites (1 with significant revenue impact) in a 400m radius (step 3)
MCMT met 2x on Monday to determine go forward plan (step 4-5). Vendor managers checked:
Commodity suppliers initially identified in EQ zone
China factories for supply chain impact
Airport, road, rail status in EQ zone
Cisco TCMT initiated to track employee safety
Crisis Management Case Study: Chengdu
© 2007 Cisco Systems, Inc. All rights reserved. Cisco Confidential 5
Days 2-5
MCMT met daily rest of week to validate scope, status with focus on employees, sites, transportation
Number of sites of concern in earthquake zone scaled down as each supplier reported back no impact other than transportation delays
By end of week problem narrowed to one supplier whose factory suffered damage
Supplier confirmed impact parts from that site and Cisco started to assess product level impact
Crisis Management Case Study: Chengdu
© 2007 Cisco Systems, Inc. All rights reserved. Cisco Confidential 6
Week 2 - 3
MCMT met 1-2x/week to focus on recovery of 15 parts made at the impacted suppliers (step 6)
Commodity team worked with suppliers to understand factory ramp & commit and working with alternate suppliers
Ongoing revenue impact analysis by planning team
Crisis Management Case Study: Chengdu
© 2007 Cisco Systems, Inc. All rights reserved. Cisco Confidential 7
Impact AnalysisImpact Analysis
CPNs
Suppliers/Sites
Emerg. contacts
Max Rev ImpactMax Rev ImpactTTR (Weeks): TBD
Max/Rev Impact: TBD
Partner ImpactPartner ImpactNo CM Impact
No SLC Impact
Moderate Impact
Crisis Management Case Study: Chengdu
Manufacturing Sites
Logistics Centers
Suppliers
© 2007 Cisco Systems, Inc. All rights reserved. Cisco Confidential 8
Crisis Management Case Study: Chengdu
© 2007 Cisco Systems, Inc. All rights reserved. Cisco Confidential 9
Lessons Learned
MCMT activation process well documented but recovery processes not sufficiently detailed
Need criteria for when MCMT hands off to operations
Need playbooks for different types of situations
© 2007 Cisco Systems, Inc. All rights reserved. Cisco Confidential 10
Lessons Learned
Communication Balance between keeping communication tight vs. including appropriate SMEs
Crisis dashboard access
Content & timing to extended mfg team and company
Need to streamline communications when multiple individuals associated with a site and/or supplier
© 2007 Cisco Systems, Inc. All rights reserved. Cisco Confidential 11
Lessons Learned
Roles & responsibilitiesNeed to set expectations for each functional group (who delivers what when)
High turnover on MCMT is a training challenge
MCMT reps delegate down – proxies not trained and/or not decision makers
Q&A
© 2007 Cisco Systems, Inc. All rights reserved. Cisco Confidential 13