Cisco Case Study

Amanda Rector Professor Morris GEB 1101 March 10, 2013 CISCO CASE STUDY Cisco is a San Jose, California based company’s “virtual close” software. There was a before and after to Cisco. The primary key issues facing Cisco in 2001 were that the software was not giving adequate information, the employees of the company overlooked economic factors associated with any business, and the company was trying to fill orders that were unsustainable. What Cisco’s systems didn’t do was model what would happen if one critical growth assumption was removed from both their forecasts and their mind-sets. Cisco was already twitchy because lead times on delivering its routers and switches were extending. Eventually those lead times would reach nearly six months on some products. Not having the components could push those delivery dates out even further. Cisco decided to build up its components inventory. It would reduce the wait time for its customers, and it would give the manufacturers of Cisco’s switches and routers a reserve to draw on if components makers ran out. Cisco entered into long-term commitments with its manufacturing partners and certain key components makers. “Promise us the parts”, Cisco said, “and we promise to buy them. No matter what.”
Cisco made big news with its downfall. It did present a lesson for future and existing companies that you shouldn’t depend on just software, because even that isn’t 100% reliable. Chellam started changing the way the company was working by using Xilinx to develop software that injects more macroeconomic indicators into his forecasts. He considers it the key ingredient missing across the networking supply chain. "I can’t rely on just what Cisco tells me," he says. "We’re developing leading indicators that are more macro in nature. Information that comes through banking, Wall Street, debt levels and economic spending they’re not intuitively related to me directly, but they have an effect." In