In order to sell their communication technology systems, Cisco has an elaborate system of its own: its supply chain.
To say the least, Cisco has a very complex supply chain system. For its 200 product families, Cisco purchases about 500,000 parts every year from over 600 suppliers. These suppliers or partners provide everything from test, design, and logistic management services. To manage all of these details, supply chain management is an ongoing process at a company as large as Cisco.
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It is interesting that Cisco deliberately associates its supply chain management policies with its commitment to social responsibility Cisco supports the Electronics Industry Code of Conduct (EICC), which “promotes an industry code of conduct for global electronics supply chains to improve working and environmental conditions”. Cisco also supports the Global e-Sustainability Initiative, which is “dedicated to information and communication technologies (ICT) sustainability through innovation”.
Cisco also takes these commitments to working and environmental conditions a step further, by implementing the Cisco Supplier Code of Conduct, which follows the EICC guidelines but also includes additional requirements. The procedure involves risk assessment of each supplier facility, review of the systems for those facilities that are identified as being most at risk, a process for conducting third-party facility audits, and a corrective action program.
After having partnered with a supplier, Cisco conducts quarterly business reviews of the suppliers’ business activities, financial stability, engineering practices, and quality procedures.
In 2007, Cisco participated in special Joint Pilot Audits, which had third parties audit Cisco facilities in China, and focused on the “labor, environmental, health, safety, ethics, and management system aspects of the code of conduct”. Cisco also frequently requests third party audits of any supplier’s business operations to make sure all suppliers adhere to their Code of Conduct.
Cisco takes diversity into consideration when selecting suppliers. Many of these suppliers are small businesses and contractors, and they provide a wide array of services. Cisco pays attention to three types of diversity: Regional, Cultural, and Social.
Regional diversity allows access to worldwide skills and markets, and provides business resiliency if disruptions occur in a particular region. It also helps reduce transportation costs. Cultural diversity, when suppliers offer different viewpoints and styles of interacting, helps develop and market products that fit the needs of the broad global community, which Cisco strives to serve. Lastly, social diversity promotes inclusiveness, which benefits both communities and local economies.
The Cisco Global Supplier Diversity Business Development (GSDBD) program, established in 1994, was designed to provide equal access to businesses owned by minorities, women, disabled people, and military veterans, as well as to companies in Historically Underutilized Business Zones (HUBzones). Cisco hopes to award 10 percent of their supplier expenditures to such businesses.
Cisco is ranked in the top 50 U.S. companies providing multicultural business opportunities, recognized by 350,000 women- and minority-owned businesses.
[Research from http://www.cisco.com/web/about/ac227/ac333/the-environment/supply-chain.html ]
