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SUPPLY CHAIN MANAGEMENT - CISCO SYSTEMS INC. Question 1 The key reason for the introduction of the ‘Networked Supply Chain’ concept in Cisco in 1996 has been the increase of the company’s transactions. Having to handle hundreds of customers’ queries on a daily basis the company needed to develop a framework for interacting with its customers globally.
Customers were able to ask for technical help – online – anytime, a fact, which has been an important criterion for the improvement of the firm’s image in the market (Simchi-Levi, David, Kaminsky, Philip, Simchi-Levi, Edith, 2003). At the same time, the specific system supported the increase of the company’s profits; since the orders of customers could be processed quite rapidly the level of the company’s sales has been significantly increased, a fact which is reflected in the firm’s financial statements in the years that followed the establishment of the Networked Supply Chain strategy. Indeed, in 1995, i.e. before the introduction of the particular strategy, the firm’s profits were estimated to $2 billion. In 1998, i.e. in just three years from the above system’s implementation, the firm’s profits reached the $9 billion, which is a significant increase. Apart from the financial benefits of the particular framework, its ability to create a dynamic relationship between customers and suppliers should be also highlighted. More specifically, through the particular system, suppliers were notified of each new order, a fact that allowed the suppliers to start building the product ordered immediately after the order was placed. ...
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