Bus 360 Case Study

Cisco Systems, Black & Decker, and O'Reilly Auto Parts: Adapting Supply Chains to Tough Times

by

Jillian Stout

Submitted for

BUS 360 Introduction to Information Systems

September 19, 2015

1. Cisco Systems went from a “push” to a “pull” approach to its supply chain after the dot-com debacle. How are these two approaches different? Does it depend on the state of the economy which one should be used? Why?

The push approach is based on forecast demand of certain products from the market and the pull approach is based on actual or consumed demand in the market. In other words, companies adopting the push approach would produce first based on forecasting and wait for the products to be sold; pull approach is more similar with “order to make” which means producers are more sensitive to the change or demand of the market.

It is all depending on the state of the economy to choose which one to use, but a different approach would have a different performance in a different state of the economy. When the economy is on its upturn, the market has higher potential purchasing desire, so manufacturers would benefit better to use the push approach to achieve economy of scale to reduce cost and maintain high level of sales.

On the other hand, producers would prefer using pull approach when the economy is in its downturn, and the market has less buying power. In this way, less material and labor would be saved and a high productivity level would be reached due to appropriately match-up of demands and supplies. This strategy would be well suited to technology based manufacturers, because their products have higher sensitivity to the market.

2. What are the different elements that need to come together to bring supply chains to the optimal levels needed by these companies? What role does IT play?

Generally speaking, the optimal level of supply chain would be achieved by applying lowest cost to acquiring highest sales. However, some of the major trends of...