Cisco Systems is a global technology company founded in 1984 that designs and sells networking equipment. In developing a new router, the Viking project, Cisco faced challenges including an accelerated schedule, low cost pressure, and ensuring the technical complexity could be handled by their contract manufacturer Foxconn. Selecting Foxconn involved both risks around Foxconn's experience level, but also benefits from their vertical integration. To mitigate risks, Cisco took measures such as designing for manufacturability, early supplier involvement, knowledge transfer, and using technology to facilitate collaboration.
Cisco Systems is a global technology company founded in 1984 that designs and sells networking equipment. In developing a new router, the Viking project, Cisco faced challenges including an accelerated schedule, low cost pressure, and ensuring the technical complexity could be handled by their contract manufacturer Foxconn. Selecting Foxconn involved both risks around Foxconn's experience level, but also benefits from their vertical integration. To mitigate risks, Cisco took measures such as designing for manufacturability, early supplier involvement, knowledge transfer, and using technology to facilitate collaboration.
Cisco Systems is a global technology company founded in 1984 that designs and sells networking equipment. In developing a new router, the Viking project, Cisco faced challenges including an accelerated schedule, low cost pressure, and ensuring the technical complexity could be handled by their contract manufacturer Foxconn. Selecting Foxconn involved both risks around Foxconn's experience level, but also benefits from their vertical integration. To mitigate risks, Cisco took measures such as designing for manufacturability, early supplier involvement, knowledge transfer, and using technology to facilitate collaboration.
Cisco Systems is a global technology company founded in 1984 that designs and sells networking equipment. In developing a new router, the Viking project, Cisco faced challenges including an accelerated schedule, low cost pressure, and ensuring the technical complexity could be handled by their contract manufacturer Foxconn. Selecting Foxconn involved both risks around Foxconn's experience level, but also benefits from their vertical integration. To mitigate risks, Cisco took measures such as designing for manufacturability, early supplier involvement, knowledge transfer, and using technology to facilitate collaboration.
61,535 employees and 40 business units Overlapping circles organized both vertically and horizontally Collaborative, cross functional organization Collaborative Leadership Collaborative Technologies 2
II. Supply Chain and New Product Introduction
Supply Chain
Globally networked and adaptive
Outsource all manufacturing and focus on product design and development Partners have increased responsibility Reduction of contract manufacturers MX-Initiative Major aspirational improvements rather than incremental changes Cisco Lean pull product is built only after customer ordered it Auto-test System Real-time data of facilities from contract manufacturers
New Product Introduction
Concept Commit Execute Commit
Phase 1: Strategy and Planning
Prototyping
Final Technical Readiness
Review
Phase 2: Execution
Pilot Build
Orderability Review First Customer Shipment Time to Quality and Volume
Phase 3: Deployment
Post-Project Assessment 3
III. Viking Project
Demand for product that can handle the demands of video, which used more bandwidth than other type of data
New Product Introduction
ASR 9000 Edge router platform for the next 10-15 years
High speed High capacity Compact Footprint Power efficiency Low costs per connection Ability to scale up routers capacity
Challenges 1. 2. 3. 4.
Accelerated Schedule Low Cost Pressure Handling of Technical Complexity by Contract Manufacturer New Product Introduction Expertise 4
Q1. What are the challenges and risks faced by technology companies in new product development?
Uniqueness Product should have features that other existing products doesnt have Technological Innovations Risk of investing in a form of technology that might be obsolete soon Market Potential Demand for this product should exist Time Product should be introduced at a time when there is a need for this product. Competition Awareness of similar products developed by competitors Production How to make the product prototyping/testing Pricing Right pricing against competitors products Promotion Determine the best promotion techniques for greater longevity in the market 5
Q2. What were the risks and benefits of using Chinese contract manufacturing from the start?
Cost Pressure
Chinese contract manufacturing
Demand for a fully advanced but
cost-effective product Emerging markets were the fastest growing part of Ciscos business
Risks
Unable to handle the routers
technical complexity Fall short on quality, reliability and ontime delivery
Benefits
>> No room for error for carrier-class
products
Low-cost Production Avoiding transition to another manufacturing site saves time, money and effort Long-term possibility of using China as manufacturing base.
Q3. In selecting Foxconn and expanding its role in the supply chain, what were the potential risks and values to Cisco? Selecting Foxconn is a high-risk high-reward decision.
Strengths
High-Level of Vertical Integration
Deep experience in procuring components Extended supply chain concentrated in Asia
Weaknesses
Lack of Experience Might be unable to handle complexity Just passed Level 3 Qualification
Q3. In selecting Foxconn and expanding its role in the supply chain, what were the potential risks and values to Cisco?
Benefits
Vertical Integration benefits
Flexible, responsive, efficient Lower costs Reduced inventory Eliminate price markups Easier logistics (save shipping time) Ability to react more quickly to market demand shifts (shorter lead time) Simpler information flow Easier coordination
Flexibility in Ciscos choice of
contract manufacturers in the future
Risks
Dependency on a single supplier
Miss out the chance to work with suppliers which might be more efficient More devastating impact in case of natural disaster, catastrophe or poor performance
Q4. What should Cisco do to mitigate these risks and ensure successful development and launch of the Viking router? Risk-Mitigating Measures
design for manufacturability
Engaging supply chain partners Early involvement of Foxconn in the development process Cisco and Foxconn engineers collaboration Transferring of knowledge Movement of prototype making closer to manufacturing site Production of more prototypes Following strict schedule to produce more prototypes
Use of Technology
Ciscos WebEx webconferencing and TelePresence Teleconferencing System
NPI Metrics (web-based tool view of timelines and tasks) Utilization of different time zones Meetings 3 times a day wiki site Technology links Logging in for testing and diagnostics
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Download full Data Mining for Business Intelligence Concepts Techniques and Applications in Microsoft Office Excel r with XLMiner r 2nd ed Edition Patel ebook all chapters
PDF Qualitative Research Methods in English Medium Instruction for Emerging Researchers Theory and Case Studies of Contemporary Research 1st Edition Curle download
