Cisco Case Study Reverse Logistics Transformation (Interlog)
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The document details Cisco's transformation in reverse logistics, emphasizing the establishment of a consistent, scalable process to recover and redeploy products for maximum value. It outlines key drivers, the complex supply chain, and specific approaches to improve efficiency and customer satisfaction, ultimately converting a cost center into a profit center. The initiative resulted in significant cost reduction and enhanced customer experience while reinforcing corporate responsibility through recycling efforts.
Cisco Case Study Reverse Logistics Transformation (Interlog)
- 1. Reverse Logistics Transformation Case Study at Cisco Mudit Agarwal, Solution Architect, Reverse Logistics, Cisco © 2006 Cisco Systems, Inc. All rights reserved. 1
- 2. Introduction Focus Area Agenda Approach Results Closing © 2006 Cisco Systems, Inc. All rights reserved.
- 3. Introduction: Presenter 12 Years of Industry Experience, last 3 and half years at Cisco Worked in different companies from small start-up to top fortune 100 companies Currently working as Solution Architect, World- Wide Reverse Logistics, Cisco © 2006 Cisco Systems, Inc. All rights reserved.
- 4. Introduction: Company London Ottawa, Canada Amsterdam San Jose, CA Boxborough, MA Tel Aviv Shanghai Herndon, VA Richardson, TX Raleigh, NC Dubai Bangalore Singapore 67,000 employees in 140 countries 300+ office locations Sydney Headquarters: 1/3 Engineering/IT, 1/3 Sales, 1/6 Service, 1/6 Others EBC © 2006 Cisco Systems, Inc. All rights reserved. 2008 Cisco Public 4
- 5. Cisco at a Glance Vision: Changing the way we work, live, play and learn Worldwide leader in networking 10 consecutive years on Fortune Magazine‟s for the Internet “Best Companies to Work For” list Founded in 1984 130+ acquisitions $110B Market Cap (Jan „09) 85+% of Cisco Systems products are $29 B cash and investments distributed via channels More than $5 B/year in R&D Business Week valued Cisco‟s brand at US$19.1 billion and ranked in top 20 WW © 2006 Cisco Systems, Inc. All rights reserved.
- 6. Innovation in Multiple Manifestations New Business Model New Market Unified Linksys Communications New Product New Customer or Service Experience Network Advanced IP Telephony Services New Process New Technology Business Councils CRS-1/IOX New Education Engine New Channel E-Commerce Networking Academies © 2006 Cisco Systems, Inc. All rights reserved.
- 7. 2008 Ranking: AMR Research—Top 25 Supply Chains 2007 2008 1 Apple 14 Best Buy 2 Nokia 15 Nike 3 Dell 16 SonyEricsson 4 Proctor & Gamble 17 Walt Disney 5 IBM 18 Hewlett-Packard 6 Wal-Mart 19 Johnson & Johnson 7 Toyota 20 Schlumberger 8 Cisco 21 Texas Instruments 9 9 Samsung 22 Lockheed Martin 1 10 Anheuser Busch 23 Johnson Controls 0 11 PepsiCo Cisco 24 Royal Ahold 12 Tesco 25 Publix Super Markets 13 Coke Source: AMR Research, 2008 © 2006 Cisco Systems, Inc. All rights reserved.
- 8. © 2006 Cisco Systems, Inc. All rights reserved.
- 9. Introduction Focus Area Agenda Approach Results Closing © 2006 Cisco Systems, Inc. All rights reserved.
- 10. What is Reverse Logistics Recovering Cisco‟s products back from Customer/ Distributor, and redeploying them in the way that brings the best value to Cisco Create a consistent, scalable, global end-to-end process and system for inbound logistics and receiving through disposition and fulfillment © 2006 Cisco Systems, Inc. All rights reserved.
- 11. Reverse Logistics Vision “Deliver a globally consistent, scalable, world class, end-to-end business solution by unlocking value from Product Returns aiming to Optimize net cash contribution, Reduce transaction cost, Improve customer satisfaction, and Promote corporate citizenship”. © 2006 Cisco Systems, Inc. All rights reserved.
- 12. Drivers Lower Product Return Rate after booking Brand Protection / Gray Market Risk Value Recovery Opportunities Building new Customer Base © 2006 Cisco Systems, Inc. All rights reserved.
- 13. Cisco’s Complex Supply Chain Hybrid Wide range Most Breadth of Acquisition Production of Products Products Are Customers Integration Model Configured (131 to date) (95% to Order Outsourced) © 2006 Cisco Systems, Inc. All rights reserved.
- 14. Introduction Focus Area Agenda Approach Results Closing © 2006 Cisco Systems, Inc. All rights reserved.
- 15. Approach: Scale 30,000 Units received each week 22,000,000 Lbs of material recycled annually $100,000,000 Net Contribution annually Note: These numbers exclude products from consumer acquisitions‟ like Linksys © 2006 Cisco Systems, Inc. All rights reserved.
- 16. Approach: Process Verticals Customer Product Returns Management, Inbound Logistics Management of product returns in transit to receiving location – Inbound Receiving & On-dock receipt to put away as per disposition Disposition instructions Express Repair order management, Express Test NPI Screening & process, Shop floor control set up, DGI to FGI conversion Testing Inventory Managing DGI/ FGI inventory, Management of Management Purge/Scrap process Order Point of receipt of order to point of report pick Management Order Report pick to actual ship confirm Fulfillment Outbound Management of refurbished product shipment from the supplier location in transit to customer location - Logistics Outbound © 2006 Cisco Systems, Inc. All rights reserved.
- 17. Inbound Logistics • Follow-up with customers on RMA‟s • Label printing by the customer • Pick-up materials from Customer location • Provide visibility for on Dock receipt to close the return © 2006 Cisco Systems, Inc. All rights reserved.
- 18. Receiving & Disposition • Receiving against a valid RMA • Re-routing Failure Analysis RMA • Apply disposition rules • Manage discrepancy • Provide customer credit © 2006 Cisco Systems, Inc. All rights reserved.
- 19. Inventory Management • Cycle count management • Increment stock based on Receipts – DGI and FGI • Inventory synchronization • Decrement stock through Scrap & Recycling © 2006 Cisco Systems, Inc. All rights reserved.
- 20. Order Management • Demand list management • Order Management • Picking and Packing • Inventory updates / decrement © 2006 Cisco Systems, Inc. All rights reserved.
- 21. Order Fulfillment • Tax , Customs and Legal compliance • Packaging • Shipping • Integration with outbound logistics © 2006 Cisco Systems, Inc. All rights reserved.
- 22. Outbound Logistics • Select a transport provider • Ship the product • Tracking of outbound logistics © 2006 Cisco Systems, Inc. All rights reserved.
- 23. Approach: Reverse Supply Chain Distributor Reseller End Customer Manufacturing Service Provider Cisco Reverse Remarketing Logistics Partner Recycle Cisco Service Repair © 2006 Cisco Systems, Inc. All rights reserved.
- 24. Approach: Architecture Direction RMA Source System ERP System New Acquisition RMA PickList Like Part Return to „A‟ Stock Cisco Other Services Open RMA Sync RMA Cancel X-Dock Part List Product Data SN Data Alt Part Service Gateway Receive product Master Data Inventory (PID,SN etc.) Management Partner Ship product New Partner Other Capabilities (Acquisition Recycle Disposition Integration) © 2006 Cisco Systems, Inc. All rights reserved.
- 25. Approach: Reverse Logistics Interactions RMA / Return tool Reverse Logistics Partner Receipt (2) Cisco Customer (Oracle ERP) Ship (3) Cisco Internal Customers © 2006 Cisco Systems, Inc. All rights reserved.
- 26. Approach: Challenges/ Gaps Implementation Challenges 1. Short Time To Market 2. Evolving Business Model 3. Unavailability of Out Of Box Functionality in Oracle modules 4. New Reverse Logistics Partner On-boarding Gaps in Oracle functionality 1. Like Part Processing 2. Pro-Active Asset Recovery Functionality 3. Business Rules Driven Supply Demand match engine © 2006 Cisco Systems, Inc. All rights reserved.
- 27. Introduction Focus Area Agenda Approach Results Closing © 2006 Cisco Systems, Inc. All rights reserved.
- 28. Solution Benefits Bring new customer into Cisco Recycling – Green Initiative Improved Process Efficiency Reduced Transaction Cost By ~ 30% Enhanced Customer Experience Improved Process for Product Reuse © 2006 Cisco Systems, Inc. All rights reserved.
- 29. Cost Center to Profit Center 3 Year Trend Analysis $157M $160M Value Recovery and Net Contribution $140M $120M $97M $100M $80M $60M $49M $40M $20M $0M FY06 FY07 FY08 © 2006 Cisco Systems, Inc. All rights reserved.
- 30. © 2006 Cisco Systems, Inc. All rights reserved.
- 31. Introduction Focus Area Agenda Approach Results Closing © 2006 Cisco Systems, Inc. All rights reserved.
- 32. Closing: Recap Took about 18 months to complete this project Built end to end Cisco‟s Reverse Logistics Supply Chain On-boarded new partner Services based Architecture Converted Cost Center to a Profit Center © 2006 Cisco Systems, Inc. All rights reserved.
- 33. Q&A Mudit Agarwal Email: Mudit@cisco.com © 2006 Cisco Systems, Inc. All rights reserved.