It is postulated that the supplier derives maximum benefits when a customer initiates the system and the supplier enhances the system’s capabilities. From a theoretical perspective, this scenario creates the highest reduction in transaction costs for the buyer and the maximum negative externalities for other suppliers. With respect to operational process benefits for both parties, establishing advanced Electronic Data Interchange capabilities with customers significantly improves the performance of the order-processing system as measured by both the accuracy of order processing and timeliness of payments. Both parties benefit from reduced support resources required for the order-management function
Suppliers benefit by being better able to …show more content…
Managers understand that its stringent requirements for partnering can place a heavy burden on supply partners. Cisco carries its portion of the burden by investing in technology and infrastructure that benefits both Cisco and its partners. Cisco calls it the Global Networked Business Model and uses it to manage supply chain activities that integrate Cisco with its suppliers. To make the extended enterprise a success, Cisco managers have to examine the company's capabilities before choosing supply chain partners. The selection process looks for partners with similar philosophies and complementary skills to Cisco. There are 20 to 25 strategic partners linked to the firm through electronic tools, meetings, and strategy sessions. For example, the dynamic replenishment initiative links forecasting, inventory, and back-logs to help the suppliers forecast their own production and assist in man-aging Cisco's overall cycle …show more content…
Cisco makes a point of keeping financially healthy while also providing customers with a contemporary product mix. Even through its difficult early calendar 2001 period, Cisco has maintained nearly billion in cash on its balance sheet. Cisco makes sure, before any acquisition, that the acquired company shares Cisco's intense customer driven focus. Long-term benefits to customers are obtained when Cisco can consistently, year after year, deliver at a high level in all critical areas. If personnel are acquired who do not share this intense customer commitment, then the customer focus may erode over time. It may not happen all at once, but may start first in pockets of problems that can eventually infect the rest of the organization. This lack of focus could well cost Cisco its customer relationships and subsequent orders a losing situation for all constituencies
Suppliers benefit by being better able to …show more content…
Managers understand that its stringent requirements for partnering can place a heavy burden on supply partners. Cisco carries its portion of the burden by investing in technology and infrastructure that benefits both Cisco and its partners. Cisco calls it the Global Networked Business Model and uses it to manage supply chain activities that integrate Cisco with its suppliers. To make the extended enterprise a success, Cisco managers have to examine the company's capabilities before choosing supply chain partners. The selection process looks for partners with similar philosophies and complementary skills to Cisco. There are 20 to 25 strategic partners linked to the firm through electronic tools, meetings, and strategy sessions. For example, the dynamic replenishment initiative links forecasting, inventory, and back-logs to help the suppliers forecast their own production and assist in man-aging Cisco's overall cycle …show more content…
Cisco makes a point of keeping financially healthy while also providing customers with a contemporary product mix. Even through its difficult early calendar 2001 period, Cisco has maintained nearly billion in cash on its balance sheet. Cisco makes sure, before any acquisition, that the acquired company shares Cisco's intense customer driven focus. Long-term benefits to customers are obtained when Cisco can consistently, year after year, deliver at a high level in all critical areas. If personnel are acquired who do not share this intense customer commitment, then the customer focus may erode over time. It may not happen all at once, but may start first in pockets of problems that can eventually infect the rest of the organization. This lack of focus could well cost Cisco its customer relationships and subsequent orders a losing situation for all constituencies