Oracle R12 Supply Chain Management Solution: Cisco's Business Transformation Case Study Saravanan N IT Systems Engineer Cisco Inc Rachna Mittal Lead Consultant (Consulting & SI) Infosys Ltd Sep 25, 2013
Agenda Customer Profile Cisco Value Chain Cisco s Agile & Flexible Supply Chain Transformation Supply Chain transformation using Oracle Value chain Enabler s Supply chain solution highlights Recap Questions & Answers
About Cisco Vision Change the way the world works, lives, plays, and learns. To Lead Every Move We Make with Networked IT Strategy Solve our customers most important business challenges by delivering intelligent networks and technology architectures built on integrated products, services, and software platforms Worldwide leader in networking Founded 1984 FY13 revenue of $48B Broad range of products, solutions and services ~70,000 employees >165 countries >150 acquisitions
Agenda Customer Profile Cisco Value Chain Cisco s Agile & Flexible Supply Chain Transformation Supply Chain transformation using Oracle Value chain Enabler s Supply chain solution highlights Recap Questions & Answers
Cisco Value Chain Evolution Through Market Transitions 1980s 1990-2000 2001-2009 2010-2013 Cisco Owned Manufacturing Outsourced Manufacturing Lean Manufacturing Customer Value Chain Core vs. Context Separation of Activities Pull-Based Manufacturing and Inventory Reduction Collaboration Large Scale Services
Cisco Value Chain Is Complex and Global Offerings Hardware Software Services Bundles Business Models CTO Fulfillment BTS Fulfillment Any Node Any Product distribution S/W Supply Chain Key Stats > 1000 Suppliers ~ 35, 000 Components ~ 33,000 Products 5 Mfg Partners, Local sites in Brazil, Russia CTO Partners BTS Partners 3PL Partners
Agenda Customer Profile Cisco Value Chain Cisco s Agile & Flexible Supply Chain Transformation Supply Chain transformation using Oracle Value chain Enabler s Supply chain solution highlights Recap Questions & Answers
Drivers of Supply Chain Transformation Without a dramatic change in the way Cisco transacts business, Cisco risks leaving substantial revenue on the table and increasing vulnerability to competitors. Capitalize on revenue opportunities through full buy and sell capabilities in emerging markets Provide a single foundational platform mitigating current resiliency issues and promoting scalability Enable new business models such as Software as a Service (SAAS) and bundling Imperative for Company Growth, Revenue Uplift, Global Consistency, Simplification, Speed, and Scalability Align with industry standards and best practices Improve acquisition efficiency, accelerating Cisco s time-to-value and time-to-monetization from acquired entities
Supply Chain Transformation Initiative Simplicity. Scale. Speed. What is SC Transformation? Supply chain shift from Work Order to Purchase Order based model Upgrade of Enterprise Resource Planning (ERP) System Foundational technology to enable new business models Extended access to emerging markets Ability to rapidly integrate acquired companies Enhanced business capabilities such as Build to Stock (BTS)
What business results are expected? to Customers and Partners to Cisco s Growth & Profitability New Business Models More self-service options Increased satisfaction levels and ease of doing business Up to a 73% reduction in cycle times New ways to structure deals: enhanced contracting, progress-based billing, solutions selling, New Business Models Increased global market share BRICM and emerging market penetration Increased profitability through a 12% target reduction in the cost-to-serve ratio Ability to focus on high-value customers through a tiered engagement model to Operations to Cisco employees Reduced touches estimated 25% reduction in manual touches Quicker time to market estimated 30% reduction in time to market Scalability and agility Shift from contextual to core work Elimination of known inefficiencies and painful workarounds through increased automation Enhanced international career opportunities Enhanced acquisition efficiency Dramatically improved system resiliency
Approach And Methodology Global Design Common process flow and global design adherence Adopt Standardization and best practices Apply Localization Rules if applicable Out of Box processes Partner Enablement Change Management Program Management for lane enablement On-time shipment, SLA measurement Supply Chain Solution Performance and Monitoring Pre-Built Industry Processes Load testing, Data generator Fine Tuning supply chain Processes Monitoring tools, Seamless transactional flow Industry Tailored Business Flows pre-built Template & Questionnaire approach Integration Framework Integration with upstream / downstream / other products EDI /Rosetta net Integration Pack for most common industry requirements E2OPEN integration with trading partners Toolkit Documentation standards -Oracle A.I.M Naming Standards Configuration, documents and templates Self Service Solution Videos
Agenda Customer Profile Cisco Value Chain Cisco s Agile & Flexible Supply Chain Transformation Supply Chain transformation using Oracle Value chain Enabler s Supply chain solution highlights Recap Questions & Answers
Target Landscape Manufacturing & Distribution Manufacturing Partner Order Scheduling Payables Order Management Supplier Returns Master Data Management Cost Management Procurement Flow Manufacturing Sourcing & Negotiation Work In Process Procurement Shipping LPN Track & Order Trace Management LPN Bills Of Material Flexible Routing Return Flow to Mfg Manufacturing Pick Release Ship Confirm Transportation Management Shipping Control Route Options Rate Shopping Freight Pricing Forecast & Build Signal Master Data Sync Up Final Config, Pack & Ship Oracle Transportation Billing Management Advices & Returns Inventory Management Shipping Execution Costing Inbound Signal & Ship Instructions Rcpt Confirm Ship Confirmation B 2 B I n te rf a c e Logistics Partner / Cariers Inventory receipt Ship Fleet Information Backlog Build Pack & Ship Stage shipment Label Milestone Report Event Management Change Plan
Cisco s Logistics Optimization Solution CISCO ODM Port Supplier Hub Mfg Partner Origin 3PL Destination 3PL Customer Single Leg Domestic Direct Ship Single Leg International Multi Leg International Manufacturing Partner 3PL Origin Warehouse Static Route to Flexible Route Options 3PL destination Warehouse Oracle Transportation Management & Oracle Shipping Execution Customer
Agenda Customer Profile Cisco Value Chain Cisco s Agile & Flexible Supply Chain Transformation Supply Chain transformation using Oracle Value chain Enabler s Supply chain solution highlights Recap Questions & Answers
Cisco s Order Flow CISCO Mfg Partner Multiple Channels Order Booking & Scheduling Oracle PO Creation Purchase Order Customer Manufacturing Partner Site Purchase Order Creation (Partner Systems) Customer Service Rep 3rd Party Logistics / Carrier Procurement Material Sourcing Ship/Deliver Pack-out and Label Print Quality Inspection Test Assemble
Carrier/Broke r 3PL Warehouse Receipt Ship Plan Milestones Inbound Ship Confirm Cisco CM Supply Chain Solution Build Ship to WH/ASN PR to CM w/otm IB Ship Instructions OTM Inbound PO Receipt 3B2 Qualify for Full ShipSet / Create Delivery Move inv SLC subinventory 4B2 OTM Shipping Controls OTM Plan OB Order Send Plan 3B18 Pick Release Update Plan 3B18 Generate Docs PDF Delayed RR Y Ship Confirm 3B2 N AR Integration WAIT for Carrier Update 3B3 Receive Inbound Confirm Arrival Receive shipment Plan Change (in OTM) Print Docs Stage product ( Level SID) 3B18 Prepare Shipment Handover to Carrier Ship Confirm Receive Shipment Plan Pick up Import & export filling Deliver Milestone Updates
Integration Architecture CISCO Environment Partner Environment CCIX(J2EE Env) Data Source/ Destination Event Pull Delivery Status Update Business Process Orchestration JMS Request Queue Request AS2 Gateway AS2 Document Response (Sync MDN) Partner AS2 GW Backend System JMS Response Queue Logging DB Errors/Logs
Supply Chain Flow- An Example Order booking and PO to Contract manufacturer Cisco Order Flow Starts with customer order booking which interacts with OTM and derives the Route Code based on the Order information 1 3A4 2 3A4 is sent to the contract Manufacturer with the PO number, route and item information Purchase Order is created with the Contract Manufacturer 3 3B2 ASN 4 On completion of the order CM sends Advance Shipment Notice to the 3PL Logistics for build completion via 3B2 message
Shipment receipt and LPN assignment 4B2 Inbound 5 6 Workflow depicts the supply line eligibility for the order line. The Order with reservations and LPN assignment goes to awaiting shipping The Logistics Partners receives the goods and sends a 4B2- Shipment Receipt Message The reservations are now intact for the order line in Intransit Subinventory and LPN assigned to the delivery 7 8 The LPN DFF for the cartons is used for tracking the movement of the Goods
Inventory movement and delivery creation The Subinventory Transfer takes care of the movement from Intransit to Finished good Subinventory 9 10 The LPN Subinventory Status is changed to FG Subinventory The delivery creation takes place after Subinventory Transfer 11 12 Validation process seamlessly create delivery and interface to OTM through middleware
OTM: Planning and Supply chain event management OTM helps in planning the order so that it can optimize the movement of the order from the origin to the end customer 13 14 Supply Chain events like the carrier picking up the goods and leaving the origin etc. sent by 3PL and Carrier can be tracked in the system OTM Shipment plan creates the trips and stops in EBS 15 16 The delivery is Now picked after Trip creation with reservation at Staging Subinventory and 3B18 is sent
Order Ship confirm 3B18 17 18 3B2 Ship Confirm Based on 3B2 SC Received, the delivery gets shipped along with associated trip and stops closed 19 After customs and trade compliance validations, The 3B18-Shipment Plan is sent to the carrier and 3PL partners Once the goods are picked up and shipped out for customer delivery a 3B2 Ship confirm notification is sent to Cisco 20 E2E workflow of Typical Cisco Sales order
Implementation Challenges SME Coverage Industry Standards Program Management People Vanilla Theme System Implementation Challenges Process Process Harmonization Partner Enablement Partnership Change Management Simplicity, Speed, Scale
Agenda Customer Profile Cisco Value Chain Cisco s Agile & Flexible Supply Chain Transformation Supply Chain transformation using Oracle Value chain Enabler s Supply chain solution highlights Recap Questions & Answers
Cisco s Flexible Fulfillment Models SLA CTO Cycle Time to Replenish 52 Days Fulfillment Lead Time 17 Days BTS Cycle Time to Replenish 36 Days Fulfillment Lead Time 3-5 Days Footprint G-Hubs, Fulfillment & Logistics Center Heavy Assembly and Test Operations Consolidated to 3PL Node Light Postponement and VMI Purchase Order Based Fulfillment Model Flow MFG and Consigned Inventory Process Any Node Any Product Distribution Critical Component (PCBA) Planning Direct Customer Ship Top Assembly based Planning Final Configuration based Payment Periodic Consumption based Payment
Value Proposition Accelerators Playbooks comprising of preconfigured process flows, configuration documents Partner message simulator Design Templates and Test Scripts Training guides Technical Know How System Performance, scalability for high volume Standardize the Partner Integration Processes and messages Integrating OTM with Third- Party systems based on Industry standards processes Functional Value Adds Global rollout strategy for partner enablement Best practices and Oracle OOB solution Standard B2B communication What it means for Partner & Customer Business Process Reengineering & Automation supported by business benefits Faster time to market for new business models Pre-built accelerators reduces time and cost to enable new partners 10-15% reduction in TCO Accelerate Cisco s ability to bring products to new geographies
Industry Benchmark As per Gartner Study, Cisco is well-positioned to capitalize on major trends driving increased long-term IT investment. In close partnership with IT, its supply chain team is focused on proactively enabling Cisco to break into new markets for its hardware, software and services-based solutions. Cisco is now thinking about supply chain as a menu of service offerings and taking a segmented approach to delivering the right services for each business at the right cost structure. Source: Gartner (May 2013)
Agenda Customer Profile Cisco Value Chain Cisco s Agile & Flexible Supply Chain Transformation Supply Chain transformation using Oracle Value chain Enabler s Supply chain solution highlights Recap Questions & Answers
If you have any questions, please contact Saravanan N sarn@cisco.com Rachna Mittal ramittal@infosys.com
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