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Strategies & Market Trends : Cents and Sensibility - Kimberly and Friends' Consortium -- Ignore unavailable to you. Want to Upgrade?

To: Mike E. who wrote (95265)	4/12/2000 7:47:00 AM
From: Mike E.	Respond to of 108040

(COMTEX) A: Cisco Jumps Supply Chain Hurdles A: Cisco Jumps Supply Chain Hurdles Apr 11, 2000 (Tech Web - CMP via COMTEX) -- If there is one name in the industry that conjures up visions of a model electronics supply chain, Cisco Systems may be it. The San Jose, Calif.-based communications giant has long used the Internet to handle customer orders, communicate with contract manufacturing partners, and source components. But it has not been an easy road to carve, according to RamS. ChandraSekaran, senior manager of Internet Strategies at Cisco's Internet Business Solutions Group. Winning the buy-in from supply chain partners, providing total customer satisfaction, and scaling applications to many partners were among the challenges, he said in a talk at the Supply Chain Council's Supply Chain World conference in Chicago on Monday. "We didn't get there overnight," he said. "It took us four or five years to build this network." Cisco's (stock: CSCO) e-business success -- which has let it realize $75 million in annual savings, cut lead times from about eight weeks to less than three weeks, and accelerate the time-to-volume of its new-product introduction by a quarter -- rests in its strategic focus, ChandraSekaran said. "We started with the customer," he said. "We looked at the ability to manage that relationship, and not at how many boxes we needed to sell to meet the quarterly numbers. ... Every project within Cisco is around the question, 'How will it increase customer satisfaction?' " Homing in on customer satisfaction and relationships is part of the recipe for a successful e-commerce venture, particularly in the emerging business-to-business segment, added keynote speaker and consultant Frank Maguire, a former senior executive at ABC, Federal Express, and KFC. "E-business is the biggest window of opportunity. The journey is just beginning," Maguire said. "When I was at FedEx, we had two objectives. One was commitment to 100 percent customer satisfaction after every transaction. The other was 100 percent commitment to service," he said. "I'm not talking about putting it in a brochure. It all revolves around putting the passion behind that commitment. How committed are you?" Cisco's commitment started in the mid-1990s. And while customers were not initially happy with the concept of doing business over the Net, the company worked hard to garner support from both its customer and supply base and its employees. This included educating buyers and creating incentives for employees, ChandraSekaran said. "We went to key customers to train purchasers on the value of using a Web system," he said. As for employees, customer satisfaction has been rolled into a metric that is used to calculate bonuses. The next step was to reach downstream and reel in CEMs, distributors, and suppliers. "Our product-development team includes an extended-partner team. Having our contract manufacturers, distributors, and suppliers involved in the extended team is one way of avoiding time-to-market issues," ChandraSekaran noted, adding that the format also helps resolve design problems early in the game. Investing in information technology to support the relationships has also been critical. In fact, between 1996 and 1998, the compound growth of annual spending on IT was 68 percent, compared with 40 percent growth in other company spending, he said. Copyright (C) 2000 CMP Media Inc. techweb.com -0- * end of story *