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007 Cisco Systems, Inc. All rights reserved. Cisco Confidential Supply Chain Risk Management – Chengdu EQ Lessons Learned John O’Connor Erica Agiewich

© 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential 1 Supply Chain Risk Management – Chengdu EQ Lessons Learned John O’Connor Erica Agiewich

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Page 1: © 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 1

Supply Chain Risk Management – Chengdu EQ Lessons Learned

John O’Connor

Erica Agiewich

Page 2: © 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

Page 3: © 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 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

Page 4: © 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 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

Page 5: © 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 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

Page 6: © 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 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

Page 7: © 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 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

Page 8: © 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 8

Crisis Management Case Study: Chengdu

Page 9: © 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 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

Page 10: © 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 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

Page 11: © 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 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

Page 12: © 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential 1 Supply Chain Risk Management – Chengdu EQ Lessons Learned John O’Connor Erica Agiewich

Q&A

Page 13: © 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 13