Reverse Logistics Transformation
 Case Study at Cisco



Mudit Agarwal, Solution Architect,
Reverse Logistics, Cisco



  ...
Introduction

                                                    Focus Area

Agenda                                      ...
Introduction: Presenter
                      12 Years of Industry Experience, last 3 and half
                      years...
Introduction: Company




                                          London
                     Ottawa, Canada            ...
Cisco at a Glance
Vision: Changing the way we work, live, play and learn




 Worldwide leader in networking             ...
Innovation in Multiple Manifestations

                    New Business Model                 New Market
                 ...
2008 Ranking: AMR Research—Top 25 Supply Chains
                                           2007                           ...
© 2006 Cisco Systems, Inc. All rights reserved.
Introduction

                                                    Focus Area

Agenda                                      ...
What is Reverse Logistics
 Recovering Cisco‟s products back from Customer/
  Distributor, and redeploying them in the way...
Reverse Logistics Vision


   “Deliver a globally consistent, scalable, world class,
  end-to-end business solution by unl...
Drivers

 Lower Product Return Rate after booking
 Brand Protection / Gray Market Risk
 Value Recovery Opportunities
 ...
Cisco’s Complex Supply Chain




Hybrid                          Wide range              Most           Breadth of   Acqui...
Introduction

                                                    Focus Area

Agenda                                      ...
Approach: Scale

      30,000 Units received each week

      22,000,000 Lbs of material recycled
      annually

      $1...
Approach: Process Verticals
                                           Customer Product Returns Management,
Inbound Logist...
Inbound Logistics




 •   Follow-up with customers on RMA‟s
 •   Label printing by the customer
 •   Pick-up materials fr...
Receiving & Disposition




 •   Receiving against a valid RMA
 •   Re-routing Failure Analysis RMA
 •   Apply disposition...
Inventory Management




 •   Cycle count management
 •   Increment stock based on Receipts – DGI and FGI
 •   Inventory s...
Order Management




 •   Demand list management
 •   Order Management
 •   Picking and Packing
 •   Inventory updates / d...
Order Fulfillment




 •   Tax , Customs and Legal compliance
 •   Packaging
 •   Shipping
 •   Integration with outbound ...
Outbound Logistics




  •   Select a transport provider
  •   Ship the product
  •   Tracking of outbound logistics


   ...
Approach: Reverse Supply Chain
                                   Distributor              Reseller               End Cust...
Approach: Architecture Direction
                                  RMA
                                 Source
           ...
Approach: Reverse Logistics Interactions

                                                                      RMA /
    ...
Approach: Challenges/ Gaps

 Implementation Challenges
   1. Short Time To Market
   2. Evolving Business Model
   3. Una...
Introduction

                                                    Focus Area

Agenda                                      ...
Solution Benefits

 Bring new customer into Cisco
 Recycling – Green Initiative
 Improved Process Efficiency
 Reduced ...
Cost Center to Profit Center


          3 Year Trend Analysis
                                                           ...
© 2006 Cisco Systems, Inc. All rights reserved.
Introduction

                                                    Focus Area

Agenda                                      ...
Closing: Recap

 Took about 18 months to complete this project
 Built end to end Cisco‟s Reverse Logistics Supply
  Chai...
Q&A



Mudit Agarwal
Email: Mudit@cisco.com



   © 2006 Cisco Systems, Inc. All rights reserved.
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Cisco Case Study Reverse Logistics Transformation (Interlog)

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Aligning with changing dynamics, Cisco has embarked upon major foundational changes in the Reverse Logistics space to support the Manufacturing Excellence Strategy and streamlining its processes to create a world class, end-to-end global business model.

Building globally consistent, scalable and reliable process with connected system(s) for Inbound Logistics, Receiving/Disposition, Inventory Management and Value Recovery of returned products, in other words unlocking value from Cisco product returns.

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Cisco Case Study Reverse Logistics Transformation (Interlog)

  1. 1. Reverse Logistics Transformation Case Study at Cisco Mudit Agarwal, Solution Architect, Reverse Logistics, Cisco © 2006 Cisco Systems, Inc. All rights reserved. 1
  2. 2. Introduction Focus Area Agenda Approach Results Closing © 2006 Cisco Systems, Inc. All rights reserved.
  3. 3. Introduction: Presenter 12 Years of Industry Experience, last 3 and half years at Cisco Worked in different companies from small start-up to top fortune 100 companies Currently working as Solution Architect, World- Wide Reverse Logistics, Cisco © 2006 Cisco Systems, Inc. All rights reserved.
  4. 4. Introduction: Company London Ottawa, Canada Amsterdam San Jose, CA Boxborough, MA Tel Aviv Shanghai Herndon, VA Richardson, TX Raleigh, NC Dubai Bangalore Singapore  67,000 employees in 140 countries  300+ office locations Sydney  Headquarters:  1/3 Engineering/IT, 1/3 Sales, 1/6 Service, 1/6 Others EBC © 2006 Cisco Systems, Inc. All rights reserved. 2008 Cisco Public 4
  5. 5. Cisco at a Glance Vision: Changing the way we work, live, play and learn  Worldwide leader in networking  10 consecutive years on Fortune Magazine‟s for the Internet “Best Companies to Work For” list  Founded in 1984  130+ acquisitions  $110B Market Cap (Jan „09)  85+% of Cisco Systems products are  $29 B cash and investments distributed via channels  More than $5 B/year in R&D  Business Week valued Cisco‟s brand at US$19.1 billion and ranked in top 20 WW © 2006 Cisco Systems, Inc. All rights reserved.
  6. 6. Innovation in Multiple Manifestations New Business Model New Market Unified Linksys Communications New Product New Customer or Service Experience Network Advanced IP Telephony Services New Process New Technology Business Councils CRS-1/IOX New Education Engine New Channel E-Commerce Networking Academies © 2006 Cisco Systems, Inc. All rights reserved.
  7. 7. 2008 Ranking: AMR Research—Top 25 Supply Chains 2007 2008 1 Apple 14 Best Buy 2 Nokia 15 Nike 3 Dell 16 SonyEricsson 4 Proctor & Gamble 17 Walt Disney 5 IBM 18 Hewlett-Packard 6 Wal-Mart 19 Johnson & Johnson 7 Toyota 20 Schlumberger 8 Cisco 21 Texas Instruments 9 9 Samsung 22 Lockheed Martin 1 10 Anheuser Busch 23 Johnson Controls 0 11 PepsiCo Cisco 24 Royal Ahold 12 Tesco 25 Publix Super Markets 13 Coke Source: AMR Research, 2008 © 2006 Cisco Systems, Inc. All rights reserved.
  8. 8. © 2006 Cisco Systems, Inc. All rights reserved.
  9. 9. Introduction Focus Area Agenda Approach Results Closing © 2006 Cisco Systems, Inc. All rights reserved.
  10. 10. What is Reverse Logistics  Recovering Cisco‟s products back from Customer/ Distributor, and redeploying them in the way that brings the best value to Cisco  Create a consistent, scalable, global end-to-end process and system for inbound logistics and receiving through disposition and fulfillment © 2006 Cisco Systems, Inc. All rights reserved.
  11. 11. Reverse Logistics Vision “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”. © 2006 Cisco Systems, Inc. All rights reserved.
  12. 12. Drivers  Lower Product Return Rate after booking  Brand Protection / Gray Market Risk  Value Recovery Opportunities  Building new Customer Base © 2006 Cisco Systems, Inc. All rights reserved.
  13. 13. Cisco’s Complex Supply Chain Hybrid Wide range Most Breadth of Acquisition Production of Products Products Are Customers Integration Model Configured (131 to date) (95% to Order Outsourced) © 2006 Cisco Systems, Inc. All rights reserved.
  14. 14. Introduction Focus Area Agenda Approach Results Closing © 2006 Cisco Systems, Inc. All rights reserved.
  15. 15. Approach: Scale 30,000 Units received each week 22,000,000 Lbs of material recycled annually $100,000,000 Net Contribution annually Note: These numbers exclude products from consumer acquisitions‟ like Linksys © 2006 Cisco Systems, Inc. All rights reserved.
  16. 16. Approach: Process Verticals Customer Product Returns Management, Inbound Logistics Management of product returns in transit to receiving location – Inbound Receiving & On-dock receipt to put away as per disposition Disposition instructions Express Repair order management, Express Test NPI Screening & process, Shop floor control set up, DGI to FGI conversion Testing Inventory Managing DGI/ FGI inventory, Management of Management Purge/Scrap process Order Point of receipt of order to point of report pick Management Order Report pick to actual ship confirm Fulfillment Outbound Management of refurbished product shipment from the supplier location in transit to customer location - Logistics Outbound © 2006 Cisco Systems, Inc. All rights reserved.
  17. 17. Inbound Logistics • Follow-up with customers on RMA‟s • Label printing by the customer • Pick-up materials from Customer location • Provide visibility for on Dock receipt to close the return © 2006 Cisco Systems, Inc. All rights reserved.
  18. 18. Receiving & Disposition • Receiving against a valid RMA • Re-routing Failure Analysis RMA • Apply disposition rules • Manage discrepancy • Provide customer credit © 2006 Cisco Systems, Inc. All rights reserved.
  19. 19. Inventory Management • Cycle count management • Increment stock based on Receipts – DGI and FGI • Inventory synchronization • Decrement stock through Scrap & Recycling © 2006 Cisco Systems, Inc. All rights reserved.
  20. 20. Order Management • Demand list management • Order Management • Picking and Packing • Inventory updates / decrement © 2006 Cisco Systems, Inc. All rights reserved.
  21. 21. Order Fulfillment • Tax , Customs and Legal compliance • Packaging • Shipping • Integration with outbound logistics © 2006 Cisco Systems, Inc. All rights reserved.
  22. 22. Outbound Logistics • Select a transport provider • Ship the product • Tracking of outbound logistics © 2006 Cisco Systems, Inc. All rights reserved.
  23. 23. Approach: Reverse Supply Chain Distributor Reseller End Customer Manufacturing Service Provider Cisco Reverse Remarketing Logistics Partner Recycle Cisco Service Repair © 2006 Cisco Systems, Inc. All rights reserved.
  24. 24. Approach: Architecture Direction RMA Source System ERP System New Acquisition RMA PickList Like Part Return to „A‟ Stock Cisco Other Services Open RMA Sync RMA Cancel X-Dock Part List Product Data SN Data Alt Part Service Gateway Receive product Master Data Inventory (PID,SN etc.) Management Partner Ship product New Partner Other Capabilities (Acquisition Recycle Disposition Integration) © 2006 Cisco Systems, Inc. All rights reserved.
  25. 25. Approach: Reverse Logistics Interactions RMA / Return tool Reverse Logistics Partner Receipt (2) Cisco Customer (Oracle ERP) Ship (3) Cisco Internal Customers © 2006 Cisco Systems, Inc. All rights reserved.
  26. 26. Approach: Challenges/ Gaps  Implementation Challenges 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 1. Like Part Processing 2. Pro-Active Asset Recovery Functionality 3. Business Rules Driven Supply Demand match engine © 2006 Cisco Systems, Inc. All rights reserved.
  27. 27. Introduction Focus Area Agenda Approach Results Closing © 2006 Cisco Systems, Inc. All rights reserved.
  28. 28. Solution Benefits  Bring new customer into Cisco  Recycling – Green Initiative  Improved Process Efficiency  Reduced Transaction Cost By ~ 30%  Enhanced Customer Experience  Improved Process for Product Reuse © 2006 Cisco Systems, Inc. All rights reserved.
  29. 29. Cost Center to Profit Center 3 Year Trend Analysis $157M $160M Value Recovery and Net Contribution $140M $120M $97M $100M $80M $60M $49M $40M $20M $0M FY06 FY07 FY08 © 2006 Cisco Systems, Inc. All rights reserved.
  30. 30. © 2006 Cisco Systems, Inc. All rights reserved.
  31. 31. Introduction Focus Area Agenda Approach Results Closing © 2006 Cisco Systems, Inc. All rights reserved.
  32. 32. Closing: Recap  Took about 18 months to complete this project  Built end to end Cisco‟s Reverse Logistics Supply Chain  On-boarded new partner  Services based Architecture  Converted Cost Center to a Profit Center © 2006 Cisco Systems, Inc. All rights reserved.
  33. 33. Q&A Mudit Agarwal Email: Mudit@cisco.com © 2006 Cisco Systems, Inc. All rights reserved.

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