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Business Process Reengineering In Cisco Systems Inc.

Ishita Gupta

with a market capitalization of more than US$500 billion.Cisco Systems Inc. Cisco became the most valuable company in the world. at the height of the dot-com boom.0 billion as of 2011 O In late March 2000. O Worldwide leader in the highly competitive networking industry O Cisco is recognized for its profitability and low operating expenses O Cisco has more than 60. it is still one of the most valuable companies.000 employees and annual revenue of US$ 43.[ .[ In November 2011. with a market cap of about US$94 billion.

which consist of a chassis and a set of printed circuit boards O Often the boards in the plant need to be returned to the vendor for a variety of reasons . which was costing Cisco a significant percentage of its operating expenses in write-offs and loss of productivity.The Process-Return to Vendor O Return-to-vendor (RTV) process. O Cisco manufactures routers and switches.

The Process-Pre Reengineering Production Department Inspect boards Reject Materials Department Verify request Forward Cost Accounting Calculate costs of Return File Paperwork .

Pre reengineering Procurement Department Ship back the boards Cost accounting Receive credit Update books .The Process.

O Cases remained till 120 days . there were scattered records of the board being sent or received or the paperwork would be so inaccurate that Cisco could not be reimbursed. O Traceability is always a challenge in a manual process.The fallouts O Often. when it came time to receive the credit from the supplier.

Fallouts O Worst was the expense of the write-offs Cisco experienced every quarter due to untraceable returns which was in tune of $ 7. .3 millions per quarter.

 eliminate at least one head count  increase the speed of returning boards  Increase speed of receiving credit .The Reengineering O Cost Accounting drove this project with the following goals reduce write-offs.

O Once redesigned.the Cost Accounting Department gave the plant three weeks to train over 130 people in the new process .The Reengineering O The Information Systems Department worked with a representative from each of the groups involved to reengineer and automate the process. the paper process would be completely computer-based and all of the sign-offs could be done on line O On completion of the programming.

. O This was one of the earliest training processes which was mapped at all the four levels of Kirk Patrick Model.Reengineering-Training efforts O This Cisco reengineering effort is notable also from a training point of view. O A case study of its own.

. O Hence one complete head was eliminated.The New Process O The new process completely eliminated the need for the cost accounting department to verify request and calculate the cost associated with processing each request.

Cycle time went down to 3 days 10% increase in requests honored Cost accounting department reported a productivity increase of 32%. . Cost Savings of upto $ 7.The reap O Complete elimination of the write-offs due O O O O to non traceable RTVs.3 m/ quarter.

Donald Kirk Patrick .References O Evaluating Training Programs By Dr.