Oracle R12 Supply Chain Management Solution: Cisco's Business

Transformation Case Study

Saravanan N
IT Systems Engineer
Cisco Inc

Sep 25, 2013

Rachna Mittal
Lead Consultant
(Consulting & SI)
Infosys Ltd

Agenda
Customer Profile
Cisco Value Chain
Ciscos Agile & Flexible Supply Chain Transformation
Supply Chain transformation using Oracle Value chain Enablers
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

Worldwide leader
in networking

Founded 1984

FY13 revenue of $48B

~70,000 employees

>165 countries

>150 acquisitions

Strategy

Solve our customers most important business challenges

by delivering intelligent networks and technology
architectures built on integrated products, services, and
software platforms

Broad range of products,

solutions
and services

Agenda
Customer Profile
Cisco Value Chain
Ciscos Agile & Flexible Supply Chain Transformation
Supply Chain transformation using Oracle Value chain Enablers
Supply chain solution highlights
Recap
Questions & Answers

Cisco Value Chain Evolution Through Market Transitions

1980s

1990-2000

Cisco Owned
Manufacturing

Outsourced
Manufacturing

Core vs. Context Separation

of Activities

2001-2009

2010-2013

Lean Manufacturing

Pull-Based Manufacturing
and
Inventory Reduction

Customer Value
Chain

Collaboration
Large Scale Services

Cisco Value Chain Is Complex and Global

Offerings

Business Models

Key Stats

Hardware
Software
Services

Bundles

CTO Fulfillment
BTS Fulfillment
Any Node Any Product distribution
S/W Supply Chain

CTO Partners
BTS Partners
3PL Partners

> 1000 Suppliers

~ 35, 000 Components
~ 33,000 Products
5 Mfg Partners, Local sites in Brazil,
Russia

Agenda
Customer Profile
Cisco Value Chain
Ciscos Agile & Flexible Supply Chain Transformation
Supply Chain transformation using Oracle Value chain Enablers
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

Imperative for Company Growth,

Revenue Uplift, Global
Consistency, Simplification,
Speed, and Scalability
Enable new business models
such as Software as a Service
(SAAS) and bundling

Align with industry standards

and best practices

Improve acquisition efficiency,

accelerating Ciscos 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

Enhanced business
capabilities such as Build
to Stock (BTS)

Extended access
to emerging
markets

Ability to rapidly
integrate acquired
companies

What business results are expected?

to Ciscos Growth & Profitability

to Customers and Partners

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

Reduced touches estimated 25% reduction in manual

touches

Quicker time to market estimated 30% reduction in time to

market

Scalability and agility

Enhanced acquisition efficiency

Dramatically improved system resiliency

to Cisco employees

Shift from contextual to core work

Elimination of known inefficiencies and painful workarounds

through increased automation

Enhanced international career opportunities

Approach And Methodology

Global Design

Partner Enablement

Supply
Chain
Solution

Common process flow and global design adherence

Adopt Standardization and best practices
Apply Localization Rules if applicable
Out of Box processes

Change Management
Program Management for lane enablement
On-time shipment, SLA measurement

Performance and Monitoring

Load testing, Data generator

Fine Tuning supply chain Processes
Monitoring tools, Seamless transactional flow

Pre-Built Industry Processes

Industry Tailored Business Flows pre-built

Template & Questionnaire approach

Integration Framework

Toolkit

Integration with upstream / downstream / other products

EDI /Rosetta net Integration Pack for most common industry
requirements
E2OPEN integration with trading partners
Documentation standards -Oracle A.I.M Naming Standards
Configuration, documents and templates
Self Service Solution Videos

Agenda
Customer Profile
Cisco Value Chain
Ciscos Agile & Flexible Supply Chain Transformation
Supply Chain transformation using Oracle Value chain Enablers
Supply chain solution highlights
Recap
Questions & Answers

Target Landscape
Manufacturing Partner
Manufacturing & Distribution

Order Scheduling

Payables

Order Management

Supplier Returns

Master Data Management

Cost Management

Procurement

Flow Manufacturing

Sourcing & Negotiation

Work In Process

Forecast & Build Signal

Backlog

Master Data Sync Up

Final Config, Pack & Ship

Shipping LPN

Flexible Routing
Pick Release

Procurement

Track
Trace Management
LPN
&Order

Bills Of Material

Return
to Mfg
Flow
Manufacturing

Ship Confirm

Oracle Transportation

BillingManagement
Advices & Returns

Inventory Management
Shipping Execution
Costing

Inbound Signal & Ship Instructions

Rcpt Confirm Ship Confirmation

Transportation Management

Shipping Control

Route Options

Rate Shopping

Freight Pricing

Event Management

Change Plan

B
2
B
I
n
te
rf
a
c
e

Build

Pack & Ship

Logistics Partner / Cariers

Inventory
receipt

Stage
shipment

Ship

Label

Fleet
Information

Milestone
Report

Ciscos Logistics Optimization Solution

CISCO

Port

ODM

Supplier
Hub

Mfg
Partner

Origin
3PL

Destination
3PL

Single Leg
Domestic

Direct Ship

Single Leg
International

Multi Leg
International
Manufacturing
Partner

3PL Origin
Warehouse

3PL destination
Warehouse

Oracle Transportation Management & Oracle Shipping Execution

Static Route to Flexible Route Options

Customer

Customer

Agenda
Customer Profile
Cisco Value Chain
Ciscos Agile & Flexible Supply Chain Transformation
Supply Chain transformation using Oracle Value chain Enablers
Supply chain solution highlights
Recap
Questions & Answers

Ciscos Order Flow

CISCO
Oracle
Multiple Channels

Order
Booking &
Scheduling

Mfg Partner
Purchase Order

PO Creation

Customer
Manufacturing
Partner Site
Service Rep

Purchase Order
Creation
(Partner Systems)

Procurement
Material Sourcing

Customer

3rd Party
Logistics / Carrier

Ship/Deliver

Pack-out and
Label Print

Quality
Inspection

Test

Assemble

Ship to WH/ASN

OTM Plan OB Order

Move inv SLC

subinventory

Send
Plan

3B2

Receive
Inbound

4B2

PDF

3B18

3B18

Change
(in OTM)

Prepare Shipment

WAIT for
Carrier
Update

Ship Confirm

3B18

Receive shipment
Plan

AR Integration

Update
Plan

Confirm Arrival

Stage product
( Level SID)

Pick
Release

3B2

Milestones

3PL Warehouse
Carrier/Broke
r

Qualify for Full

ShipSet / Create
Delivery

RR

Generate
Docs

Ship
Confirm

PO
Receipt

Delayed

OTM Shipping
Controls

OTM Inbound

Inbound

Cisco

PR to CM
w/OTM IB Ship
Instructions

Ship Plan

Build

Receipt

CM

Supply Chain Solution

3B3

Print Docs

Handover to
Carrier

Ship Confirm

Pick up

Deliver

Import & export

filling

Milestone Updates

Receive Shipment
Plan

Integration Architecture
CISCO Environment

Partner Environment

CCIX(J2EE Env)

Data
Source/
Destination

Business
Process
Orchestration

Event Pull

JMS
Request
Queue

Request

AS2 Document
AS2
Gateway

Response
(Sync MDN)

Delivery Status
Update
JMS
Response
Queue
Logging
DB

Errors/Logs

Partner
AS2
GW

Backend
System

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

3A4 is sent to the contract

Manufacturer with the PO
number, route and item
information

3A4

Purchase Order is created with

the Contract Manufacturer

3B2 ASN

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

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 4B2Shipment 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

The LPN Subinventory Status is

changed to FG Subinventory

10

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

OTM Shipment plan creates the

trips and stops in EBS

13

14

16
15

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

The delivery is Now picked

after Trip creation with
reservation at Staging
Subinventory and 3B18 is
sent

Order Ship confirm

17
3B18

After customs and trade

compliance validations, The
3B18-Shipment Plan is sent to
the carrier and 3PL partners

Based on 3B2 SC Received ,

the delivery gets shipped along
with associated trip and stops
closed

18
3B2 Ship Confirm

Once the goods are picked up

and shipped out for customer
delivery a 3B2 Ship confirm
notification is sent to Cisco
E2E workflow of Typical Cisco Sales order

20

19

Implementation Challenges
SME Coverage

Industry Standards
Program
Management

Vanilla Theme

People

System

Partner Enablement

Process
Harmonization

Implementation
Challenges

Process

Partnership

Simplicity, Speed, Scale

Change Management

Agenda
Customer Profile
Cisco Value Chain
Ciscos Agile & Flexible Supply Chain Transformation
Supply Chain transformation using Oracle Value chain Enablers
Supply chain solution highlights
Recap
Questions & Answers

Ciscos Flexible Fulfillment Models

CTO

BTS

Cycle Time to Replenish 52 Days

Cycle Time to Replenish 36 Days

Fulfillment Lead Time 17 Days

Fulfillment Lead Time 3-5 Days

G-Hubs, Fulfillment & Logistics Center

Consolidated to 3PL Node

Heavy Assembly and Test Operations

Light Postponement and VMI

Purchase Order Based Fulfillment Model

Flow MFG and Consigned Inventory

Any Node Any Product Distribution

Direct Customer Ship

Critical Component (PCBA) Planning

Top Assembly based Planning

Final Configuration based Payment

Periodic Consumption based Payment

SLA

Footprint

Process

Value Proposition
Accelerators

Functional Value
Adds

Technical Know How

Playbooks comprising of pre

configured process flows,

Partner message simulator

Design Templates and Test

Global rollout strategy for

partner enablement

configuration documents

What it means for

Partner & Customer

Best practices and Oracle OOB

solution

Scripts

Standard B2B communication

Training guides

Business Process Reengineering & Automation

System Performance,
scalability for high volume

supported by business benefits

Faster time to market for new

business models

Pre-built accelerators reduces

Standardize the Partner

time and cost to enable new

Integration Processes and

partners

messages

10-15% reduction in TCO

Integrating OTM with Third-

Accelerate Ciscos ability to

Party systems based on

bring products to new

Industry standards processes

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
Ciscos Agile & Flexible Supply Chain Transformation
Supply Chain transformation using Oracle Value chain Enablers
Supply chain solution highlights
Recap
Questions & Answers

If you have any questions, please contact

Saravanan N

Rachna Mittal

sarn@Cisco.com

ramittal@infosys.com

TOMORROW
starts here.