Cisco - Supply Chain in Hi-Tech Manufacturing Driven by OTM

Supply Chain in Hi-Tech Manufacturing Driven by OTM

Cisco Systems Inc• Kevin Franklin• Sree Guru Sankaran

Cisco Confidential 2© 2013-2014 Cisco and/or its affiliates. All rights reserved.

Speaker IntroductionKevin Franklin• Manager, Global Logistics

Processes and Projects• 15+ years experience in global

supply chain management

Sree Guru Sankaran• Lead Analyst, Supply Chain

Management IT• 11+ years experience supply chain

management

• Worldwide leader in networking

• Founded in 1984

• FY14 revenue of $47.1B

• ~70,000 employees

• >165 countries

• >153 acquisitions

Broad range of products, solutions,

and services

About Cisco

Vision

Enable Cisco’s success and unrivaled customer experience by delivering an adaptive, innovative, and scalable supply chain

Strategy

• Enable the Business• Deliver Operational Excellence• Improve Customer Experience• Differentiate through Supply Chain Innovation• Empower Our Team


Cisco’s Value Chain … Complex, Global

CVCM CVCM IT

Manufacturing Team By the NumbersHybrid production model

95% outsourcedIT = 69% outsourced

~9,000 employees90+ locations/32 countries

9 functional groups

$32B Division>1,000 suppliers

35,000 componentsIT=~4% of spend


The Customer Value Chain is Changing

From Lack of Visibility in Shipments to Optimized

Shipments Through Transparent Visibility

From Static Mode of Transportation to Dynamic

Mode of Transportation

From Customized System and Processes to

Standardized Systemand Processes


Supply Chain’s “Layers of Manufacturing”

TECHNOLOGY ASSEMBLY

Printed Circuit Board Assembly (PCBA)

Economies of scale, majority manufactured in Asia and Mexico

COMPONENTS

Global sourcing, economies of scale and technology, open source, commercial and Cisco software

LOGISTICSClose proximity to transport network, multi-function centers, licensing, and software asset management

SYSTEM INTEGRATIONDirect Fulfillment (DF)

Regional, closer proximity to customers, electronic delivery


Fulfillment Models in Cisco

CONFIGURE TO ORDER (CTO) BUILD TO STOCK (BTS)


Configure to Order Flow

Build to Stock Flow

ODM BTS Node

Customer

Destination 3PL warehouse

Option AOption BOption COption D

Contract manufacturer

Port

CustomerOrigin 3PL warehouse

Destination 3PL warehouse

Any Node Any Product Network Modeling at Cisco


Inbound Component Freight Lanes

G-HubG-Hub

RM SuppliersRM Suppliers

PCBAsPCBAs

DFDF

PO

PO

PO

DRAY

Interplant

Interplant

DRAYPO 29 % (150 M)

Interplant 23 % (120 M)

Total 52 % (270 M)

Leg 0 5 % (25 M)

Leg 1 19 % (100 M)

Leg 2 19 % (100 M)

Others 5 % (25 M)

Total 48 % (250 M)

Inbound

Outbound

Slide with animation

Solution in OTM


Technical Landscape

TransportationOrders

Shipment Plan& Freight Cost

Using Rosetta Net & Web Service Gateway

Standard Messaging

Single Sign-on - OAM

INV

APSOM

AR

WIP

WSH

OTM 6.2.8

3PL WMSContractManufacturer

Cis

co

Fire

wal

l

Carriers


Any Node Any product in OTM


End to End Process Flow

Web Services

LaneSelection

Order Release Creation

Mode Selection

Review & Approve shipment

Ship Confirm

Track& Trace

Audit & Settle

Order Mgmt. ASCP Inventory Shipping

Execution Purchasing

• Items, Products,

• Location• Sales order• Move order• Delivery

• Planned Shipments

• Shipment Ack

• Ship confirmation

• Shipment Events

Invoice

Financials

Shipping Control

Load consolidation

Oracle Transportation Management

Rate Shopping

Value Chain Partners

Bulk Plan/Instant Plan

Shipment Creation

External Rating Engine

Fusion Transportation Intelligence• Order

• Shipment• Invoice

Rate Inquiry/Response

ETL

• Route Inquiry

• Transit Time


Shipping Controls


Supply Chain Event Management ProcessCisco Business Process

• Near real-time status updates to customer • Ensure Sequence of milestone is validated• Ensure that the time based SLA between milestones are met

SLC/BTS DestinationGateway Customer

Wheels Up

Customs Clearance

Delivered to Customer

Shipment 1 Shipment 2

Wheels Down

36 hrs.36 hrs.

5 hrs. 4 hrs.

Sent by Carrier 1

Sent by Carrier 1 or Carrier 2

52 3

4Ship Confirm1


Milestone Monitors


Milestone Monitors – Contd.


Rate Shopping

80% of Shipments in Cisco are Parcel shipment. Kewill, FedEx and Czarlite are used as external rating engines.


OTM will optimize deliveries into shipments. Optimization will include:

Low-cost carrier selectionOptimal service typeMode selectionConsolidation of deliveriesAutomation of constraints on for each lane, customer, product, etc.

Accurate freight cost estimate for customer invoicing – actual estimate known before shippingLimit/Control 3rd Party changes to shipping

Shipment Planning

Example Screen in OTM

2

Slide 19

2 3) OTM data kept current allows for freight cost known before carrier invoicingkevinfra, 10/27/2014

Benefits


Reduced Logistics CostImproved Operational Efficiency

Increased Control and Faster Decision Making

Logistics Transformation Benefits

• Improved On time shipments. OTS increased to close to 98%

• Flexible Lane and partner enablement from 6 months to 3 months

• Dynamic re-routing of shipments to avoid delays

• Improved SOX compliance• Near real time visibility for improved

agility and response to a supply chain disruption

• ~15~18 Million cost savings per Year• Network and Inventory optimization• Load consolidation • Mode optimization • Rate shopping

Thank You!


If you have any questions, please contact

Sree Guru [email protected]

Kevin [email protected]

TOMORROW

starts here.

Software

Cisco - Supply Chain in Hi-Tech Manufacturing Driven by OTM