Scm Cisco

Coordination in SCM:

Bullwhip Effect di Cisco (dikutip dari CIO Magazine)

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What’s Went Wrong at Cisco In 2001

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isco rose above a crop of small networking companies through two strategies: outsourced manufacturing and growth through acquisition. From the time it went public 11 years ago, Cisco was never not growing. Sometimes its growth was staggering. Its stock split 12 times in the ’90s. Its revenues went from millions to billions to tens of billions as fast as the Internet would let it. 44,000 people worked at Cisco, and thousands of them were millionaires. For a New York Stock Exchange minute, Cisco topped GE as the most highly valued company in the world and earned a half-trillion-dollar market capitalization. If growth continued at the same pace for another decade? and why wouldn’t it? Cisco would be as big as the U.S. economy. Without a hint of irony, analysts suggested Cisco might be the first company to have a trillion-dollar market capitalization.

At the same exact time, a few components for Cisco’s networking equipment were rumored to be in short supply. Privately, Cisco was already twitchy because lead times on delivering its routers and switches were extending. Eventually those lead times would reach nearly six months on some products. Not having the components could push those delivery dates out even further. So Cisco decided to build up its components inventory. Doing that would accomplish two things: It would reduce the wait time for its customers, and it would give the manufacturers of Cisco’s switches and routers a reserve to draw on if components makers ran out.

Of course, everyone else wanted those components and the manufacturing capacity to build the networking devices too. So in order to get both, to make sure they would have them when they needed them (and they knew they’d need them; the virtual close told them so), Cisco entered into long-term commitments with its manufacturing partners and certain...