The Cisco SCFO Story
Global efficient operations through robust scaling and process innovation
Cisco’s SCFO (Supply Chain Field operations) group oversees the gathering and redistribution of returned products from customer programs that allow for the “Trade In” and “Stock Rotation” of working devices for credit toward the purchase of new equipment, as well as the rotation of a percentage of FGI products which went unsold by the distribution channel over the previous quarter. Converting an 8 million USD/year cost center to a profit centerSCFO’s analysis revealed that its reverse supply chain lacked coordination, control, and was a cost center for Cisco. Cisco’s fragmented global returns network drove products to be freighted to an array of outsource partners driving logistics costs and increasing customer turnaround times. Further, once products had been delivered into any of its outsource partners inventory systems, limited inventory visibility was offered to Cisco, thus constricting any opportunity they might have to utilize these products internally. 30,000 units were stored every week across 58,000 unique SKUs from 162 countries around the world. These factors resulted in these products moving to recyclers at a significant cost to Cisco. Cisco recognized that they were getting the exact same products returned that were being ordered as new from manufacturing by other groups within the company. Because of this, SCFO aimed to marry the Reverse Logistics returns to internal demands.
Identify the opportunities, risks, and find the right outsource partnerIn 2006 Cisco assembled a team of seasoned supply chain experts to analyze its material flows, identify key cost drivers, and to develop and prioritize their business objectives. Their decision-making process was driven by the 4 R’s – “Reduce, Reuse, Recycle, and Rethink.” Cisco’s objective was to partner with a supplier capable of implementing a new business model in AMER, EMEA, and APAC. Cisco wanted to select an outsource partner that could offer maximum value for its talent, experience, technical know-how, and flexibility. After some careful consideration it was deemed that Teleplan was the partner which was best qualified for the job.
Design, Develop, and DeployTeleplan worked closely with Cisco to align its business and IT solutions with their key needs. As the process was being built from the ground up Teleplan and Cisco were able take a ‘whiteboard’ approach to the design and build an optimized solution. The business was broken into pieces with leaders from both Cisco and Teleplan being tasked with co-developing a viable business approach. Once an approach was agreed upon it was brought before an operating committee for changes and/or approval. Strong business objectives guided the process redesign: for example, timely reception and discrepancies management would yield higher customer satisfaction and improved value recovery. Teleplan’s flexibility with regard to our IT design partnered with our years of operational experience allowed us to provide a state of the art, uniform, global solution which addressed Cisco’s key objectives. The solution was rolled out sequentially consolidating the global SCFO supply chain into Teleplan.