Global Logistics and Supply Chain Strategies - April 2008 - (Page 8)

Collaboration Helps Cisco Systems Fight Growing Complexity Editorial Director Jean V. Murphy A conversation with Angel L. Mendez, senior vice president of global supply chain management at Cisco Systems, San Jose, Calif. A technology leader and enabler of the internet revolution, Cisco Systems produces a wide variety of switching and network products that enable fast and secure internet communications for enterprises and consumers alike. With suppliers and customers located around the world, Cisco’s supply chain is broad, diverse and extremely complex. The company manages this complexity through a centralized supply chain organization under the leadership of Mendez, whose global organization has approximately 2,000 employees with responsibility for global supplier management, manufacturing and product operations, advanced sourcing, reverse logistics, manufacturing technology and quality, and demand management and planning. of complexity organize into some form of divisional structure. That is not the case at Cisco. We have one functional organization for global supply chain management that looks after all products, regardless of division. I think that distinguishes us, certainly among tech companies and, I assume, among companies in other industries as well. The complexity here is a great challenge and the first level of that is just the breadth of the products. We have more than 200 product families and more than 150,000 specific products. These range from products where we make millions of units a month or a quarter to ones where we only make hundreds or even dozens of units each week or month. And we sell to a variety of segments. Cisco is the largest provider of internet technologies to the world, which is its core business. But it also has products in the consumer space, most notably the Linksys brand, which produces routers and other products that consumers buy at retail stores and use in their home or small business to power their LAN [local area network] or other entertainment and home networking products. On the other side of the spectrum, Cisco’s service provider division sells to large and mid-sized telecommunications and cable companies around the world. The products these companies need are highly specialized, very complex and very expensive so that is the high end of our product line. In the middle is the segment that really made the company. That’s where we have the switching and routing technologies that allow enterprises and small businesses to power the internet. Another interesting challenge for us is that we go to market in many parts of the world through partners. So we sell through value-added resellers and distributors as well as having direct sales to corporations and to service providers and enterprises. And then to add to the fun, the lion’s share of our products are configure to order. This isn’t true of the product bought through retail channels, of course, but the majority of our products are ordered in much the same way as you would order a Dell computer, Q: Tell us a little about the path that led to your current position as senior vice president of supply chain at Cisco. Mendez: Over a 24-year career, I have worked for several companies. After graduating from GE’s Manufacturing Management Program, I served 11 years with General Electric in manufacturing and supply chain management assignments. Then I worked at Allied Signal as head of the aerospace sector’s international sourcing operation and later led supply chain efforts at Aerospace Equipment Systems, which then was AlliedSignal’s largest business unit. I moved to Citigroup, where I worked as a division executive for global procurement, leading the consolidation of supply chain management activities during the merger of Citicorp and Travelers Group. After that, I was head of global supply chain management at Gateway Inc. and I was senior vice president for global operations for PalmOne. Q: That’s an impressive resume. What drew you to the job at Cisco? Mendez:Cisco is unique in many ways, but one of the key things that differentiates the company’s supply chain is that it operates as one functional team. Most companies our size that deal with a similar level 8 APRIL 2008

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Global Logistics and Supply Chain Strategies - April 2008 Contents Editorial GL & SCS Exclusive Fast Forward Up Front Cover Story: Continuing to Add Ever More to Their Offerings, 3PLs Are - At Your Service Over the Long Haul Opinion: Freight Audit Bill Can't Show All Mistakes that Hurt the Bottom Line Opinion: The ‘Good-Freight’ and ‘Bad-Freight’ Trucking Customers Industry Voices

Global Logistics and Supply Chain Strategies - April 2008

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