The Global Service Supply Chain (GSSC) division of Cisco is hoping to capitalise on the potential $19 trillion value of the Internet of Everything (IoE) revolution after succesfully growing its global installed base to more than $400 billion.
This growth in the Cisco installed base of networking equipment such as switching, routing, servers and storage facilities nearly doubled over the past five years and has been supported by ongoing investments in people, processes and technology; something which the company believes is foundational to its evolution.
Going back as early as the Dot.com era of the 1990s, Cisco realised the importance of supply visibility, global demand and process automation and was busy introducing technologically agile tools to stay ahead of the industry curve.
The company, which is headquartered in San Jose, California and has 380 global sites doing business in over 165 countries, now sits on the cusp of another digital revolution as it plans to utilise its market expertise to its advantage and gain a share of the $19 trillion expected to be generated from IoE.
For Cisco GSSC, part of CiscoServices, it is much more than getting replacements parts to the right place at the right time. The team has a wide-ranging mission spanning inventory management and distribution, demand planning, service entitlement, fulfillment, vendor management, configuration, lifecycle support, and logistics, through to acquisition integration and compliance.
Marco van Duijnhoven, Director of Global Repair Operations within Cisco’s service supply chain, said: “Cisco’s strategy is to be number one or extremely close to number one in every market we participate, while growing to at least 40 percent market share in each segment.
“We’re in a transformational era where we’re beginning to see people, process, data, and things come alive as part of the Internet of Everything; a growing network of everyday things like cars, refrigerators or street lamps that use a web connection to communicate with each other and the people around them.
“This transformational era is creating new connections, turning information into action, and creating a huge financial opportunity.”
With over 1100 depots worldwide, Cisco’s service supply chain provides hardware replacement in 128 countries and delivers 840,000 parts annually, so naturally there is an acute focus on supply chain transformation to support the customer experience and expected business outcomes from the Internet of Everything.
This supply chain transformation includes investments in web services, analytics, data modelling, virtualisation and decision support to provide a pathway from reactive to proactive and predictive capabilities; from real-time monitoring of end-to-end business processes, automatic detection and management of deviations from plan, to real-time reporting and analysis of operational metrics and trends.
Internet of Everything
Cisco is the only company with market share leadership across all its industry segments, and its diverse product portfolio from collaboration, data centre and the cloud, to security and unified computing, has seen it grow nearly four-fold since 2005.
Its growth strategy is aligned to several technology transitions that are combining to enable IoE. This includes the Internet of Things (the networked connection of physical objects), increased mobility, the emergence of cloud computing, and the growing importance of big data.
The Internet of Everything is expected to have five to 10 times the impact of the original Internet and it is expected to create $14.4 trillion for the private sector, while $4.6 trillion of the overall $19 trillion value will come from the public sector.
There are five main drivers of the IoE value at stake: Asset utilisation reduces selling, general, and administrative expenses and cost of goods sold by improving business process execution and capital efficiency; Employee productivity creates labour efficiencies that result in increased productivity; Supply chain and logistics efficiency eliminates waste and improves process efficiencies; Improved customer experience occurs as customer lifetime value is increased and market share grows by adding more customers. Lastly, innovation increases the return on R&D investments, reduces time to market, and creates additional revenue streams from new business models and opportunities.
“The substantial opportunity customers stand to gain through the Internet of Everything cannot be fully realised without Cisco technology” the company stated.
Infrastructure and Investments
Within Cisco’s service supply chain, business agility is directly linked to systems flexibility. Service levels change as new service offerings are introduced and new products may require delivery options that cannot be serviced with a static systems footprint.
Specifically within the Service Supply Chain, two years ago Cisco created a vision for a proactive organisation; one that could build and provision services faster than ever before. In collaboration with Capgemini and Pegasystems, it is crafting solutions to accelerate time to capability to address ever-changing market forces and has adopted Pega as a platform for real-time ‘Sense and Respond’ capabilities for Global Service Supply Chain operations.
“As our business grows, we cannot incrementally increase our operations costs, especially when considering our business grows at approximately 10 percent per year in terms of RMA volumes. So as a business, we rely heavily on our systems and partners to meet our delivery service level agreements,” van Duijhoven said.
“Achieving our vision to become a proactive service supply chain is well underway; at the Pegaworld 2014 conference in June, we won the Business Impact Award for our work in the Service Supply Chain domain.”
By 2020, there will be approximately 50 billion objects connected to the Internet, generating a tremendous amount of data. It is also projected that in this year alone the number of mobile-connected devices will exceed the number of people on earth.
Subsequently, this means speed, agility and flexibility are all needed to spearhead both the adoption and support of new technologies, such as cloud, to enable fast access to IT and new applications.
Competitive advantage
Year after year, Cisco has focused on disrupting the technology market to deliver intelligent networks and technology architectures built on integrated products, services, and software platforms.
The company’s innovation began with the first multi-protocol router in 1984. By 1993, it had $714 million in revenue and had hit a milestone of shipping 100,000 routers. Most recently, Cisco engineers introduced the Network Convergence System—or Cisco NCS ; it provides the performance and intelligence needed to cope with increasing mobility and cloud computing, as well as the broad capabilities to manage the Internet of Everything.
Van Duijhoven concluded: “As the market continues to change, we’ll continue to see around corners. We’ll also continue to put our customers first, making adjustments where needed. In the 2013 financial year, the corporation spent $5.9 billion, making it one of the top research and development spenders in the world.
“At the end of the day, it’s about solving our customers’ problems and helping them succeed.”