Traditionally, this is one of the most highly competitive Awards sectors, and this year was no different. For the combination of volumes and complexity, this sector has few rivals, and it has always set the pace for rigorous, data-based supply chain management.
Three entries made it through to the Finals this year (a fourth, from Thales, the judges chose to consider in the Service and Utilities sector, where indeed it won. The entries came from Agilent Technologies UK, Cisco Systems, and Infineon Technologies AG.
In the end the Award was a tough choice between the latter two entries. The judges indeed took the rare step of awarding the Infineon entry a ‘Highly Commended’ title, which doesn’t happen every year. Amongst the many other indications of ‘excellence’ Infineon submitted almost certainly the best questionnaire, which suggests that supply chain understanding is highly developed thoughout the organisation.
Infineon is a manufacturer and shipper of product, and they do this incredibly well. The judges’ final choice, the service supply chain delivery organisation of Cisco Systems, has by contrast a completely outsourced and collaborative supply chain, giving what PRTM call ‘mission assured’ support to many of the organisations that make modern living possible. As ‘Global Product Services’, Cisco was the overall winner of these Awards in 2002 with an entry concentrating on b2b e-commerce, and so the judges were keen to see whether Cisco has scaled yet greater heights, or whether any complacency might perchance have crept in!
Cisco is essentially selling, not products or services, but ‘network uptime’, so the service supply chain capability is very much a strategic factor for business growth and development. The Cisco Service Supply Chain dispatches parts and engineers to customers and partners according to agreed service levels. Ordered parts are shipped from the main warehouse in the Netherlands for ‘next business day’ shipments, or from one of 245 premium depots across Europe, the Middle East and Africa to fulfil two hour and four hour service criteria. A particular feature is an advanced replacement model with asset recovery occurring after networks have been rebooted and are up and
running, with parts then routed through an outsourced repair operation to return them to the supply chain.
Jim Fuller, director, service supply chain, says that the Service Supply Chain team has successfully outsourced the hardware maintenance element of the overall value chain to third party providers – this including logistics, warehousing, field engineering services and parts repair. ‘By doing so, Cisco is able to react quickly to market dynamics and effectively meet ever-changing customer requirements across a very broad and diverse geography’.
The judges recognised the detailed processes that are in place to ensure customers enjoy ‘best in class’ service ensuring the maximum network uptime and stability. Cisco demonstrates a keen ability to manage a complex ecosystem of external suppliers using demonstrable processes and metrics, and the organisational structure as planned and as implemented on the ground is a key feature of their success.
The assessors particularly noticed that Cisco’s organisation is so far advanced that ‘they are working on how to anticipate service supply chain failures before they occur, or before a customer notices that there has been a failure. Their organisation is designed to share experience globally and achieves massive leverage through their management of third parties (Kuhne + Nagel and DHL in logistics, as well as the third party repair centres), high performance, high flexibility and low cost – twelve employees managing a £1.4 billion revenue stream! The assessors concluded ‘through their collaborative model Cisco seem to have optimised nearly all of their supply chain parameters’.
