CISCO Systems Inc - Research Paper Example

Management Table of Contents Element 3 Article1 3 Article 2 4 Article 3 4 Article 4 5 Article 5 6 Element 2 8 Background of CISCO Systems Inc 8 Overview of Operation of CISCO 8 Analysis of operations transformation process of CISCO 9 Assessment of quality, speed, dependability, flexibility and cost of CISCO 11 Supply chain management of CISCO 13 Operational issues in the company and its solution 17 Reference List 18 Element 1 Article1 Giunipero, L., Hooker, R. and Denslow, D., 2012. Purchasing and supply management sustainability: Drivers and barriers. Journal of Purchasing & Supply Management, 18, pp. 258-269. The authors aim at reviewing the relevance of supply chain sustainability in an organization and then cited its main drivers. The authors have critically explained the supply chain management activities, which affects the cost of the organization. According to Sroufe (2003), the main drivers of sustainable supply chain management are authority of the top management, government regulations, competitive advantage, ethical concerns related to the organization, change in demand of customers and stakeholders pressures. However, there are few barriers too, which hinders the sustainable supply chain practices in an organization. The barriers are lack of harmony in upper management level, cost of economic and sustainable condition, inefficient standards and regulations pertaining to sustainability and misalignment of the long and short term strategic objectives. The article indicates that sustainability supply chain management is not well developed among the collected sample, however, the literature elaborates that sustainability have succeeded value in developing realm in the social environment by employing proper supply chain management. The two main drivers of sustainable supply chain are identified to be government compliance and inefficient economic incentive to become more proactive. According to the article it is important to minimize the supplier and buyer investment in sustainability so as to overcome the barriers. Article 2 Olhager, J., 2013. Evolution of operations planning and control: From production to supply chains. International Journal of Production Research, 51 (23–24), pp. 6836–6843. The research paper lays emphasis on the historical perspectives of defining the main trends in identifying the shifts in control and planning in an organisation. The paper analyses the trends that are adopted in an organisation from shop floor to material requirements planning (MRP), sales and operations planning (S&OP) and Master Production scheduling (MPS). The author had elaborated the historical perspective of evolution of the control and planning system in organisations over the parts 50 years. He has also highlighted the effects that have been encountered along with the change in planning system over the same period of time. The main findings of the paper indicates the fact that the system as encountered huge change over the past 50 years, which can be encountered from individual machine to the automatic equipments in the supply chain. However, improvements are needed even today in order to serve operational excellence; it is required for both internal operation and supply chain that take into account customers and suppliers. The shifts that are observed during the period are explained thoroughly in the article. Initially the shift was observed during 1980, when the companies felt the need of improving their operational practices and systems and also builds a strong supply chain. Article 3 Pettersson , A. and Segerstedt, A., 2013. Measuring supply chain cost. International Journal of. Production Economics, 143, pp. 357-363. The article depicts the methods used in the industry for measuring the supply chain cost (SSC). It concentrates on a model that is developed for gauging the SSC. In order to execute the research, 30 companies are taken as the representatives, which belong from 10 industries. These representatives are interviewed regarding the different methods that are employed by them to measure the SSC. These methods are then compared with that of the model. The model actually identifies the difference between methods that are used for calculating SSC: actual or standard cost. The finding of the research revealed that the 30 companies or the representatives that are interviewed during the research do not follow any methods for gauging the SSC. Rather they only measure a part of SSC such as manufacturing cost, which is complemented by distribution cost. One of the company indicated that the standard cost influence the supply chain to a great extent as it cost effective. The SSC is divided into six different parts such as administration, manufacturing, warehouse, capital, distribution and installation cost. The reason behind doing so is to determine the main source of the SSC. However, these costs can be further divided into further divisions. Article 4 Sohal , D., 2014. Supply chain professionals: A study of competencies, use of technologies, and future challenges. International Journal of Operations & Production Management, 33(11/12), pp. 1532-1554. The research paper elaborates on the skills and competencies needed for being an efficient supply chain manager. It also depicts the facts regarding usage of technologies by these supply chain managers in order to increase their work efficiency. The future challenges are identified pertaining to the supply chain management. This includes environment, globalization and supply chain integration. The study takes into account a questionnaire survey, where data are collected from different supply chain professionals in Australia. The main findings of the research indicate that team work and communication are the two main competencies that are required by the supply chain managers in order to do the work efficiently. They should understand the use of broad range of technologies so that they can employ it whenever required. The main challenge for supply chain management is lack of appropriate management resources. Hence, it is required for the companies to identify the right set of skills and competencies for the supply chain managers so that they do not encounter any problem later. The top managers should emphasize on the significance of SCM and the need for the effective supply chain. Therefore, it is crucial for the companies to concentrate on their management resources and make it their strength by capitalizing their skills. Article 5 Lintukangas, K. Smirnova, M., Jumpponen, J., Kouchtch, S., Panfilii, V. and Virolainen, V., 2010. The status of purchasing and supply management in Finland and Russia, Journal of Purchasing & Supply Management, 16, pp. 185-194. The papers aims at explaining the capabilities of long term planning, supplier relationship and supply management to influence strategic purchasing and supply chain management of organizations. The study gives emphasis on these elements and examines its effect on the dynamic business environments of Western countries and developed economies. In this context, Russia and Finland are chosen as the sample countries and hence represent extremes with regard to long term planning and the associated variables. It is observed that the control variables of the study form size and age have significant effect on the state of purchasing and supply chain management. This is because a number of firms were established in Russia and the data are prepared accordingly where there may be biasness. The hypotheses that are developed in the study indicates that Long term planning affects supply chain and purchasing management positively; however, the lower value of the impact indicates the fact that the relationship is uncertain in the Russian economy, which forms the part of emerging economy. Supplier relationship also have positive impact on the supply chain and purchasing management; whereas the third hypotheses also proves that there is a positive relationship between supplier and supply chain management. Hence, it is significant to note that though Russian economy has a strong history of operations relation around the globe, but there are different economic realities that can be explained in order to understand the tough framework of present supply chain management. Element 2 Background of CISCO Systems Inc CISCO Systems Inc is a renowned American multination company, which aims at manufacturing and designing networking equipments. However, it is the first manufacturing company that does not produce by themselves but ships the products and services to different contract manufacturer worldwide for manufacturing products on behalf of the company. It is headquartered in San Jose, California. The products and services of CISCO are divided into three broad segments, corporate networks, home users and small business. Corporate network includes borderless networks, data enter and virtualization, IP Next Generation Networks and collaboration. The small businesses take into account businesses that are operated from home. However, the home users are referred to the individuals, who are in need of the services and products that are manufactured and delivered by the company. The strategy of shipping the raw materials to different manufacturers across the globe helps the company to concentrate on production innovation and its marketing. It also ensures that they do not have to encounter expense and hassle related to the maintenance of inventory. Nevertheless, CISCO has encountered huge inventory wreck in 2001, which indicated several loopholes in the inventory system (CISCO Systems Inc., 2014f). Overview of Operation of CISCO The company operates through data centre operations management services, which assists the customers to accelerate the operational success by employing new technologies and solves the problems that arise in due course of time. Figure 1: Data Center Services for Operations Enablement of CISCO (Source: CISCO Systems Inc., 2014a; CISCO Systems Inc., 2014c) The Data Center Services for Operations Enablement of CISCO includes many voluntary modules, which assist in accelerating operational maturity of the Data Center management processes. The three main domains of operation such as plan, build and manage are significant in the company. The services aim at addressing the challenges that are associated with the operational processes and tools. This requires assessment of data effectively and efficiently in the data centre. The business operation of CISCO has undergone huge changes and is also encountering modifications presently so that they can sell the bundles of solutions in high prices. The offered solution bundles need changes in credit selling, revenue attribution, supply chain and order processing (CISCO Systems Inc., 2014a; CISCO Systems Inc., 2014c). Analysis of operations transformation process of CISCO One of the main competitive advantages of CISCO is its ability to offer architectures of different products related to collaboration, mobility, borderless networks and security. The transformation process of the service that is taken into account is Wireless LAN (CISCO Systems Inc. 2014b). The process considers the designing and sale of the solutions of the products that are developed by the units or partners of the unit. Figure 2: Operation transformation process of CISCO (Source: CISCO Systems Inc. 2014b) The business architect highlights the operation transformation process of CISCO that is carried out while offering networking and security solutions to the end users. The operational scenarios of the process comprise quote-to-cash from direct sale, which indicates different capabilities that interact for achieving a predicted outcome. This capability highlights the starting point of the flow models that aims at defining the detailed processes followed in the company. The operational scenarios offer certain contexts for recognizing the main points and gaps in the business capability. However, the operational requirements are characterized for addressing the main points and gaps. The majority of the requirements need to be met by the systems, which aims at automating the processes of the business. Further, the processes are recorded to the systems in the architecture models (CISCO Systems Inc. 2014b). In Figure 2, the layers of operations are clearly highlighted that starts with RTM and ends in offering. Assessment of quality, speed, dependability, flexibility and cost of CISCO In the dynamic business environment, companies are searching for new mobile solutions, which can satisfy their customers and connect them closely with their business while maintaining and securing a network infrastructure that is easily manageable. The company has given endeavour in providing the best quality products to customers so that they are satisfied with the services. For example, the company provides switching, routing, security and wireless technologies through CISCO Borderless networks to the customers, employees and their valued partners; it enables that they can access their critical applications with devices from anywhere at any time. It also offers a very secure and reliable source of network to the end users. The quality of products and the company performance are directly related to reaction of the customers and employees, who are using the LAN services. The number of LAN service of the company has increased to a great extent and it has assured the quality of the products (CISCO Systems Inc., 2014d). Moreover, the Rack Server of CISCO is regarded as the fastest two-socket server offered by the company in 2014. It runs on Microsoft SQL Server and delivers one of the “best price/performance ratio of the server on TPC-H Benchmark at 1000-GB scale factor -60 percent better than the HP DL980 G7 server” (CISCO Systems Inc., 2014d). Figure 3: Performance of CISCO upon its nearest competitors (Source: CISCO Systems Inc., 2014d) In the above figure it is observed that the performance of CISCO’s M3 Rack Sever and UCS M3 Rack Server are better than that of HP’s ProLiant DL980 G7 Server and ProLiant DL980 G7 Server respectively. This performance of the server highlights on the fact that the Servers of CISCO are dependable as compared to competitor’s product (CISCO Systems Inc., 2014d). In order to examine the performance of the company and evaluate its transactions that are made in the due course of business, Transaction Processing Performance Council (TPC) is formulated. TPC is a non-profit organization, which is established for defining database benchmarks and transaction processing; it also helps in disseminating verifiable and objective performance data of industry. The members of TPC consist of major software and hardware companies (TPC, 2014). The following list of server and processor has performed very well in the industry and has helped the company to brand (TPC, 2014). Benchmark Server and Processor Score Comments SPEcjbb 2013 CISCO UCB C220 M4 Intel Xeon E5-2699 v3 at 2.3 GHz 195,119 max-jOPS 51,318 critical-jOPS Number-one 2-stock MultiJVM result for max-jOPS Oracle E-business Suite 12.1.3 CISCO UCS B200 M4 Intel Xeon E5-2697 v3 at 2.6 Ghz Order-to-Cash 243,803 Lines/Hr Large Model Number-one-server VMware VMmark 2.5.1 CISCO UCS B260 M4 Intel Xeon E7-4890 v2 at 2.8 GHz 1170 Number-one-2 stock server The table elaborates the fact that the products of CISCO have gained recognition in the market because of its flexible products. The cost of manufacturing these products is relatively higher; however, the price/performance ratio is outstanding, which have satisfied the customers to a great extent (TPC, 2014). Supply chain management of CISCO The business scenario is changing with the increase in customer demand, development cost and competition. In order to remain competitive in the present market situation, companies are concentrating on its supply chain. They need to alter their supply chains from the back-office and cost-based function to flexible operations that are designed for addressing the challenges that are encountered at present. The life-cycle management of the product develops a particular framework for wide level use in the enterprise in order to optimize its production (CISCO Systems Inc., 2014e; Carr and Smeltzer, 1997). Internet has proved to be one of the effective tools for modifying the supply chains in different industries worldwide. The suppliers, manufacturers, distributors and resellers work together efficiently rather than acting as a solitary virtual company. Hence, the companies concentrate on operation of the business and also improve the time period within which the customers will receive the products from the suppliers (Keller International Publishing Corp, 2014). An integrated and networked supply-chain management systems/ processes can enable a company to reduce its inventory and the associated costs. This helps in improving speed of products and services delivery and assists in delivering accurate real-time forecasting decisions. It also enables improvement in streamline of payment cycle, enhances its revenues as well as progress its services. Presently, the supply chains are technology driven as it dominates the purchase experience of the customers and create a harmonized relation with that of the supplier partners (CISCO Systems Inc., 2014e). CISCO relies on about 600 suppliers who are present worldwide for manufacturing, shipping, testing and recycling the products that are actually designed by them (CISCO Systems Inc., 2014e). The company aims at multiplying their effect on the planet by concentrating on its supplier’s requirement and also examine whether they meet its high business standards set for everyday practice. The virtual supply chain model of CISCO gives emphasis on the limitless capacity for rendering high reliability to the customers. The company concentrates on the core competencies such as designing and sale of innovative network solutions and form close association with the suppliers, through which they can satisfy the customers. The supply chain framework has pyramid structure. Figure 4: Supply chain of CISCO (Source: Attri, 2006) The contract manufacturers of CISCO are supplied with many sub-tier components, which include optical gears and processor chips. This are employed for structuring the network that consists of huge commodity suppliers operating across the globe. The structure helped in adding more value to the company Cisco in areas of manufacturing. Hence, this framework helped in contributing to the growing revenues of CISCO, added shareholder value and gave befits to the suppliers. The suppliers concentrated on the Return on Assets (ROA) by enhancing the asset base, which in turn improved the returns by decreasing the costs. In this manner, the supply chain became more competitive along with low cost sacrificed for the development of the total system; additionally it also increased the responsiveness of the system (Attri, 2006). The major issues that is recognized in this structure relates to the communication gap, which is basically seen within the different tiers. The company ordered for huge quantities of supplies in order to avoid the consequences of scant resources. This decision of bulk ordering is based on the demand forecast, which is gathered from the sales force of the company. However, the forecasters have failed to observe that few predictions are augmented artificially (Attri, 2006). This failed to maintain variability among the network gears and thus the customers of CISCO concentrated on purchasing similar services and products from its competitors. The inventory wreckage brought loss to the company as it indicated the loopholes, which are present in the supply chain system of CISCO. To avoid the situation, the company constructed a new and advanced supply chain system, which is known as e-hub. Figure 5: CISCO’s e-hub supply chain arrangement (Source: Kaas, 2011) The e-hub developed by CISCO has the ability to eliminate the requirement for human participation. The new system aims at facilitating the automatic information flow between suppliers and contract manufacturers (Kaas, 2011). The system highlighted the manner in which information technology have amalgamated with appropriate cooperation from the supply chain partners and how it can assist the company for enhancing quality of services rendered to the customers. Operational issues in the company and its solution When CISCO was earning high profit in the industry, it failed to anticipate the changes that were prominent in the industry during the phase of 2001. They were unable to cope up with the changes and manage the problem of high inventory. Hence, CISCO had to write off its inventory of about $2.2 billion during May 2001 (Attri, 2006). After realizing the problem, the company formed a team under the e-hub remedial program. The programs help in determining the internet technology that is associated with cooperation among the supply chain partners and is employed to offer high level of satisfaction to the customer. The e-hub connected the operational systems across the supply chain of CISCO and ensured that there is adequate flow of information. Hence, the e-hub have enabled tough amalgamation between the suppliers and the company and also improved collaboration between them, which is the main component in the virtual manufacturing system of CISCO (Attri, 2006). Reference List Attri, H., 2006. Extracting Value From Difficult Supply Chains. [online] Available at: [Accessed 19 November 2014]. CISCO Systems Inc. 2014c. Services. [online] Available at: [Accessed 19 November 2014]. CISCO Systems Inc., 2014a. Cisco Domain Ten: Domain 10: Process and Governance. [online] Available at: < http://blogs.cisco.com/datacenter/cisco-domain-ten-domain-10-process-and-governance-part-b > [Accessed 19 November 2014]. CISCO Systems Inc., 2014b. Enterprise Architecture and IT Service Management. [online] Available at: [Accessed 19 November 2014]. CISCO Systems Inc., 2014d. Cisco UCS Delivers the Best 2-Socket Server Performance and Best Overall Price/Performance on the TPC-H Benchmark at the 1000-GB Scale Factor. [online] Available at: < http://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CBwQFjAA&url=http%3A%2F%2Fwww.cisco.com%2Fc%2Fdam%2Fen%2Fus%2Fproducts%2Fcollateral%2Fservers-unified-computing%2Fle-46305-pb-tpch-140820a.pdf&ei=8oltVLanKcHImAXY6YCIDA&usg=AFQjCNHoao9IjnkQAaxWp0s_MOka8ryGPg&bvm=bv.80185997,d.dGY > [Accessed 19 November 2014]. CISCO Systems Inc., 2014e. Supply Chain Management / Product Lifecycle Management. [online] Available at: < http://www.cisco.com/web/about/ac79/scm/overview.html > [Accessed 19 November 2014]. CISCO Systems Inc., 2014f. About Us. [online] Available at: [Accessed 19 November 2014]. Giunipero, L., Hooker, R. and Denslow, D., 2012. Purchasing and supply management sustainability: Drivers and barriers. Journal of Purchasing & Supply Management, 18, pp. 258-269. Kaas, B., 2011. Cisco e-hub. [online] Available at: [Accessed 19 November 2014]. Keller International Publishing Corp, 2014. Cisco Borrows from Sales, Finance to Transform Returns Into a Profit Maker. [online] Available at: [Accessed 19 November 2014]. Sroufe, R., 2003. Effects of environmental management systems on environmental management practices and operations. Production and Operations Management, 2(3), pp. 416–431. TPC, 2014. TPC-H. [online] Available at: < http://www.tpc.org/tpch/default.asp > [Accessed 19 November 2014]. Read More