Cisco Systems The Supply Chain Story Free Essay Example, 1000 words

Cisco’s problems began in early 2001, and (Shinal, 2000) states that the decline in sales and revenues was not anticipated. It would be appropriate to state that problems resulting from the system were the main causes of the unanticipated financial setbacks. The company is to blame for overwhelming the system due to the addition of different networking protocols meant to suit the change in the nature of the supply chain. Secondly the system lacked in terms of its application to the current changes in the nature of the adjustments in supply and demand. The model was initially set up on a preexisting rule of growth and the company ought to have implemented different alterations in the system to incorporate changes resulting from a large market, high demand, complex organizational processes and the change in the state of the supply chain. As illustrated earlier, the company had built the system on the assumption that assured demand was a component of the company’s structu re. As a result of the assumption above, the company did not build the model used to anticipate changes in the demand pattern which affected the supply chain negatively. We will write a custom essay sample on Cisco Systems: The Supply Chain Story or any topic specifically for you Only $17.96 $11.86/pageorder now Additionally, the company had not implemented a suitable policy to ensure that the company would transition effectively in the event that the demand and the number of members of the supply chain increased rapidly. Due to the size of the company and the numerous orders it received from different consumers all over the world, the available systems were overwhelmed by the existing traffic. Secondly, the company had not built the appropriate infrastructure to improve communication between new manufacturers and suppliers and as a result there was a lapse in communication which increased the total number of inventory that suppliers availed to the manufacturers. Some lapses on the system also caused conflicts between suppliers and manufacturers as the payment system which catered for the delivered commodities was not efficient to the preferences of the suppliers which resulted to suppliers withholding manufacturing components. To sum up the failure of the system, problems which resulted to the overlapping of orders due to the subsequent customer orders which were mainly conducted to increase the rate at which orders were delivered, resulted to an increase in inventory. Other problems resulted from the company’s long term commitment with suppliers which increased the overall inventory factoring other factors resulting from poor communication.