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Chapter 11 • Supply Chain Management 303

CASE 11-1
Opening Case
Managing the e-Supply Chain at Cisco Systems

Source: Adapted from Managing the e-Supply Chain. Business Intelligence, 2001 and Shister, N. (March 2007).
Cisco Builds a Supply Chain, World Trade, 20 (3), 34.
Headquartered in San Jose, California, Cisco Systems designs and sells the equipment
needed to build Internet technology–based networks: remote dial-up access servers,
routers, switches, and network management software. Cisco has the top market share in 16
of the 20 markets in which it competes and is number two in the remaining four. By the
mid-1990s, Cisco’s managers found that they simply could not increase production capacity
fast enough to meet demand.
James Crowther, customer business solutions manager, enterprise, explained: “We
realized that growth depended on our ability to scale manufacturing distribution and other
supply chain processes quickly. Cisco also realized that we would require the services of
far more people than we could reasonably expect to recruit in time. It was at that point that
the idea of a new business model emerged. Cisco decided to turn itself into a Web-enabled
company by outsourcing most of the manufacturing and logistics activities. In addition, it
used networking technology to link supplier and distributors tightly to their in-house
business processes. This left us free to concentrate on our real strengths: new product
development, looking after customer needs, and brand management.”
In Cisco’s case, using the Internet to reengineer the organization did not mean
pasting a thin dotcom veneer on to a bricks-and–mortar company; however, it was about
fundamentally transforming the company from the inside out. Cisco used Internet-based
technology to transform its entire supply chain into an extended enterprises system or what
Cisco calls “an ecosystem.”
Cisco’s Internet ecosystem seamlessly links customers, prospects, partners, suppli-
ers, and employees in a multiparty, multilocation electronic network. This e-network both
acts as the glue that holds together all the internal operations of the supply chain and
enables all the parties involved to present a unified face to the outside world, with the
result that all the working parts look and act as if they are one company. At the heart of
Cisco’s ecosystem are two portals: Cisco Connection Online (CCO), which provides
access to Cisco’s customers or clients, and Manufacturing Connection Online (MCO),
which provides access to Cisco’s contract manufacturers, assemblers, distributors, and
logistics partners.

CCO COMPONENTS

1. Marketplace: a dynamic online catalogue used by more than 10,000 authorized
representatives of direct customers and partners to configure Cisco products online. It
contains a suite of applications for order processing that enables customers to configure,
price, route, and submit orders.
2. Status agent: gives Cisco’s sales force, direct customers, and partners immediate
access to critical information on the status of orders.
(continued)