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Lean forward case study at Cisco


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Lean Forward is a global supply chain program, which utilizes unique levels of collaboration to extend the supply chain and transform business for Cisco and its Distribution Partners. This exciting program has deployed a portfolio of initiatives across the supply chain and Cisco's own organization to mitigate waste and other operational inefficiencies. Lean Forward also provides "one face" to Cisco distributors within the supply chain and delivers improved supply chain visibility and better supply chain coordination. The program is a collaborative effort between Global Supply Chain Management and WW Distribution and involves extensive cross-functional cooperation within Cisco and with our Distribution Partners.

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Lean forward case study at Cisco

  1. 1. Lean Forward<br />Case Study at Cisco<br />Mudit Agarwal – IT Eng/ Solution Architect<br />
  2. 2. Agenda<br />What is Lean Forward <br />Problem Statement<br />Business Vision<br />Lean Forward Charter<br />Framework/ Solutions/ Key Metrics<br />Distributor’s Voice<br />Solution Benefits<br />Challenges<br />Closing and Q&A<br />
  3. 3. AMR Research Ranked Cisco 8th in the 2008 Supply Chain Top 25, Citing Lean Forward<br /><ul><li>First time in Top 10 (April 2008)
  4. 4. Ranked on innovation in supply chain design / management, operational excellence, and contribution to outstanding business results </li></li></ul><li>What is Lean Forward<br />Global initiative to power profitable Growth and Sales acceleration for Cisco and its Distributors <br />Extending Principles of Lean Manufacturing into the Channel<br />Extending Supply Chain to Cisco’s Distribution Partners<br />Lean Forward is organized into 4 tracks - D=S, Physical Inventory Optimization, Landed Costs, and Improved Productivity<br />Driving profitable growth through <br />partnerships<br />
  5. 5. Problem Statement<br />Higher Distributor/Reseller operating-cost and working capital<br />Overstocks due to unpredictable lead times<br />Project-based orders that must be delivered complete before releasing to reseller<br />Inefficient supply chain fulfillment<br />Distributor purchase price misaligned with market price<br />
  6. 6.
  7. 7. Business Vision<br />Transforming the Customer Experience with a streamlined, highly integrated global supply chain, driving profitable growth and sales acceleration for Cisco and its Distribution Partners<br />
  8. 8. 46<br />Extending Supply Chain visibility into Distribution has highlighted new opportunities for improvement<br />Disti Operating Cost<br />Disti Working Capital<br />Cisco Reseller Development<br />Cisco Demand Generation<br />“Right” Cisco Inventory<br />Distributors<br />Our Dock<br />Disti Cash Flow Reinvestment<br />…focused on driving profitable growth for Cisco and our Distributors<br />Revenue and Profit Growth for Cisco and Distributors<br />Lean Forward Charter: Driving Profitable Growth for Cisco and our Distribution Partners<br />Lean Forward is a collaboration across:<br /><ul><li> Supply Chain Mgmt
  9. 9. WW Distribution
  10. 10. Cisco Capital
  11. 11. Export Compliance
  12. 12. other organizations…</li></li></ul><li>
  13. 13. High Level Solution Detail <br />Demand=Supply (D=S)<br /><ul><li>Distribution Partner overstocks due to unpredictable lead times
  14. 14. Balance Demand – supply equation at SKU level
  15. 15. Freeing Working Capital for reinvestment
  16. 16. Actual POS serves as demand signal
  17. 17. Supply driven from demand input </li></ul>Merge In Transit (MIT)<br /><ul><li>Project-based orders that must be delivered complete before releasing to reseller
  18. 18. Reduce the lag time between ship sets
  19. 19. Release to ship and invoice at the delivery </li></li></ul><li>Key Metrics<br />The Financial Metrics include:<br />Working Capital freed up <br />Operating Cost Reductions <br />Savings Reinvestments <br />Incremental Sales Generation <br />The Operational Metrics include: <br />Lead Time <br />Fill Rates <br />Inventory Weeks of Supply <br />Stock rotation percents <br />Daily Rebate Claims Rejections <br />
  20. 20. Global Distributors’ Voice<br /><ul><li>“Whether it be forecasting or demand or fulfillment or configuration …Lean Forward causes us to look at those opportunities together in a different way.”
  21. 21. Lean Forward is “an opportunity to improve profitability …improve return on capital … and to reinvest that into our partnership.”</li></li></ul><li>Solution Benefits<br />Lean Forward provides "one face" to distributors worldwide within Cisco’s global supply chain<br />Enables supply chain control and visibility<br />Improves the customer experience of Cisco products<br />Closer partnership for solving supply chain issues<br />Involves mutual reinvestment - resulting in mutual profitable growth<br />
  22. 22. Challenges<br />Evolving Business Models<br />Short Time to Market<br />Consistent Terms and Condition across multiple Partners<br />
  23. 23. Q and A<br />