Conversion of Supply Chains into Demand Chains
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Conversion of Supply Chains into Demand Chains
use of shared information. The use of these systems has the potential to convert supply chains into demand chains in the sense that the system can now respond to known demand rather than having to anticipate that demand through a forecast. Figure 7.5 describes the architecture of such a system. One company that has recognised the importance of improving supply chain visibility through shared information is Cisco Systems, a market leader in telecom- munications and network equipment (see below).
Laying the foundations for synchronisation
In the same way that the conventional wisdom in production and manufacturing is to seek economies of scale through larger batch quantities, similar thinking can often be found in the rest of the supply chain. Thus companies might seek to ship by the container or truck load, customers are discouraged from ordering in smaller quantities by price penalties and delivery schedules are typically based on opti- mising the efficiency of routes and the consolidation of deliveries. Clearly such an
Cisco Systems: creating a virtual supply chain through shared information Cisco Systems, one of the world’s leading players in the networking and tel- ecommunications markets, has created a virtual supply chain in which almost all manufacturing and physical logistics are outsourced to specialist contract manu- facturers and third-party logistics companies. Only a very small proportion of their 20,000 different stock keeping units are actually ‘touched’ by Cisco. Following a sudden collapse in sales as the Internet bubble of the closing years of the twentieth century finally burst, Cisco was forced to write off over $2 billion of obsolete inventory. Subsequent investigations highlighted the reason for this spec- tacular fall from grace: inadequate visibility of real demand across the entire supply chain leading to significant over-ordering of components. Determined not to see a repeat of this catastrophic event – the size of the inven- tory write-off created a new world record and led to a major financial setback for the company – Cisco set out to build a state of the art communications network to enable information to be shared across the ‘extended enterprise’ of their major tier 1 suppliers and logistics service providers. This has been achieved through the creation of an ‘e-hub’. The purpose of the e-hub is to act as the nerve centre and to ensure real-time visibility of demand, inventory levels and production schedules. Through its event management capability it can provide early warning of supply chain problems. As a result of its investment in creating supply chain wide visibility through shared information, Cisco has enabled a highly synchronised network of global partners to act as if they were a single business.
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One role of seasoned, experienced human resources professionals is to mentor junior professionals. You have decided to share your expertise with a group of college students who are considering making human resources their profession.
Research and address the following:
How has the field of human resources management evolved over the past ten years?
Discuss how the HR professional acts as a strategic partner to senior leadership.
Discuss the major specialty areas within the field, such as Employee Relations, Organizational and Employee Development, etc.
What generally are the differences in responsibilities of an HR generalist and an HR specialist?
What criteria would you recommend college students use to decide if human resources was the right profession for them?
Conversion of Supply Chains into Demand Chains
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