Whether it's a truck, a tsunami, or

Whether it's a truck, a tsunami, or an economic downturn, the same general rule applies. You are better off if you can see it coming from a safe distance.
There are not many companies that understand this motion better than cisco system Inc. White-hot during the 1990s, the company was pummeled after its vaunted inventory forecasting system could not or did not predict the dot-com bubble collapse.
The result of this miscalculation was the sales were halved, the company lost 25 percent of its customers in a matter of weeks, and it ultimately wrote off more than $2 billion inventory. After that experience, Cisco's supply chain team vowed that it would never get blindsided again.

"There is a huge difference cutting head count between now and 2001," says Karl Braitberg, Cisco vice president of customer value chain management.

Back then, Cisco's supply chain model was built on a "push" system, where products were made and inventory was built up in anticipation of market demand based on best-guess forecasts. "Then, when demand dropped, the supply chain froze. Nothing happened,"Braitberg says. "We knew we had to build a new system that reacts better than just 'push.'"
Every company is tasked with matching its supply to consumer demand. In a normal business cycle, how well that job is accomplished determines whether the company is profitable. But this current economic downturn is anything but normal, and businesses are struggling to simply stay liquid.

There are various strategies to help preserve working capital, including cutting head count, outlets, and manufacturing lines. But for most companies, the key to capital preservation will be how well they can reduce their inventory levels.

Largely, companies are in survival mode, and they're looking to their supply chain management team to free up precious capital to help them do what. While it may not fall directly on IT executives to make that happen, their role in the equation is very strategic.

With globalization, outsourcing, and increased compliance and security concerns, managing supply chain operations becomes increasingly complex. And shorter, more frequent product cycles targeting more-sophisticated markets create a need to manage more products and parts from remote locations. Add the pressure of shorter cash-to-cash cycles the time from when a business extends credit to build inventory until the time it gets paid - into the equation, and the need for an intelligent, nimble, and timely flow of information becomes critical.

To have visibility as well as command and control, supply chain operations must be tightly integrated with the IT infrastructure. That isn't the case at many companies, and yet it may be the factor that determines success or failure as they endure and emerge from this downturn.

Like bloodletting, reducing inventory is a delicate matter that most people would prefer to avoid. Inventory can range from materials, to parts, to fully assembled products. Nobody wants to run out. If there's too little, customers won't get orders in a timely manner and market opportunities will be missed. Yet if a company carries too much and demand drops, then the inventory must be "bled down," or reduced in price, until it has a buyer.
During a strong economy and when cash flow is loosened, many companies can get by without rigorous inventory management practices, says Larry Lapide, director of demand management at the MIT Center of Transportation & Logistics in Cambridge, Massachusetts. But during a recession, he adds, "companies had better bleed down inventory to reflect the downturn is sales. If they don't, it just sits there."

Inventory optimization is so critical now because of its impact on available cash, Lapide says. In accounting terms, inventory is an asset. So inventory that is on the books through manufacturing, assembly, and distribution represents credit-funded inventory. Whit credit at a premium, it's in a company's best interest not only to keep inventory levels tight, but also sell goods as soon as possible.


Reducing costs and squeezing maximum utility out of fixed assets is nothing new to Black & Decker Corp.'s Hardware and Home Improvement Group in Lake Forest, California. The unit supplies hardware to big-box retailers that have responded to the economic downturn with new low-price strategies. It now falls on Scott Strickland, vice president of IS, to help the group squeeze down its own costs and maintain profit margins.
"We had been loath to drive inventory down to this level," Strickland says.

However, the company had gained invaluable experience by deploying an integrated inventory management system prior to the downturn. The result was that the key decision makers throughout its supply chain were operating with the same information, planners focused only on exceptions, and supplier and material issues were quickly resolved. The system, Strickland says, does the heavy lifting, and as a result, the unit has cut planning cycles from weeks to days and improved forecast accuracy by 10.4 percent.

"If someone had told us nine months ago that we could lower inventory as fast as we could to address decline, we would not have believed it was possible," Strickland says. However, "because of the impetus on freeing up working capital, we have been focused on lowering our inventory and levels. We figured we could do this, and it turned out to not be the bad experience we had imagined."

The effort to lower inventory levels to free up working capital has proved so effective that the Black & Decker unit and its partners are jointly considering making it standard practice even after the economy recovers, Strickland says.
O'Reilly Auto Parts Inc. in Springfield, Missouri, uses inventory as a competitive differentiator, says Greg Beck, vice president of purchasing. One of the largest specialty retailers of automotive aftermarket parts, tools, supplies, and accessories in the United States, O'Reilly is responding to the recession differently than many other companies.
"Business is increasing because of the downturn," Back says. "People aren't buying new cars but instead are putting more money into fixing old cars."
This isn't to say that O'Reilly lacks supply chain challenges or that it can let down its guard. As the result of an acquisition last year, the company increased its total store count to more than 3,300 and now operates in 38 states. To bolster its competitive advantage, O'Reilly's strategy is to increase customer service levels and replenish inventory on a nightly basis, while at the same time managing an increasing number of products.
The partnership between the supply chain operation and IT was critical to O'Reilly's strategy. The company is using Manhattan Associates Inc.'s replenishment software to collect product data information on the half-hour, while updates from the distribution centers are transmitted nightly. The replenishment system uses this data to determine the forecast for these products. As a result, O'Reilly has increased inventory turns by 44 percent, and it still manages to fulfill 97 percent of customer requests immediately, with 3 percent handled through separate channels. At the same time, the company reduced its inventory levels, freeing up $60 million.
Companies say that driving costs out of the supply chain is an important goal, but the big question is whether-especially during a recession-they can afford to invest in their supply chain IT infrastructures to help make that happen.

Dwight Klappich, an analyst at Gartner Inc., calls that a short-sighted and, in the long term, costly approach. "If this focus on short-term tactical issues, while necessary for many businesses, could widen the gap between the best-performing organizations and lower-performing organizations."

Cisco understands this. After the 2001 downturn, it made major system investments to transform its "push-driven," siloed supply chain model into an integrated "pull system" that can extract timely data from suppliers and downstream partners.
This reorders data is sent to Cisco after being triggered by specified parameters and algorithms, to shape "demand signals."





The system doesn't operate in a vacuum. Cisco has optimized its forecasting algorithms by bringing together representatives from its marketing, finance, sales, supply chain, and IT departments, and from key customers. As part of its sales and operations planning process, this group collaborates to create a common view of demand signals This input drives an agreed-upon plan of action to align manufacturing capacity and inventory deployment and meet customer service levels. In short, they work together with the same data to optimally match supply and demand.

"Now, if there are no pull signals, nothing gets brought into the system," says Cisco's Braitberg.
Manufacturers don't continue to source and build inventory that may sit in some warehouse waiting for customers who may never buy it. Cash is freed up for other purposes.
While Braitberg acknowledges that even past history can't be used as a template for this downturn, Cisco is confident that it has better visibility into market demand when it goes down, and that it will be ready when the green shoots emerge.
"We now have the techniques in place to be hypersensitive to demand changes," Braitberg says, "and we can manage our way through a downturn."

Results (Persian) 1:

این که آیا آن یک کامیون سونامی یا رکود اقتصادی، قاعده کلی همان اعمال می شود. شما بهتر است اگر شما می توانید آن را از فاصله. بسیاری از شرکت ها است که درک این حرکت بهتر از سیسکو سیستم شرکت سفید گرم در طول دهه ی 70 وجود ندارند، این شرکت پس از آن موجودی vaunted پیش بینی سیستم نمی توانست یا فروپاشی حباب دات کام پیش بینی بود pummeled بود. نتیجه این miscalculation فروش نصف شد شرکت 25 درصد از مشتریان خود را در عرض هفته را از دست داده و آن را در نهایت خاموش بیش از 2 میلیارد دلار موجودی نوشت. پس از آن تجربه سیسکو را تامین زنجیره ای تیم قول داد که آن هرگز دوباره blindsided دریافت کنید.کارل Braitberg سیسکو معاون مدیریت زنجیره ارزش مشتری می گوید "یک تفاوت بزرگ برش تعداد سر بین سال 2001، در حال حاضر وجود دارد". آن زمان، سیسکو مدل زنجیره تامین در سیستم "فشار"، که در آن محصولات ساخته شد و موجودی در پیش بینی تقاضای بازار مبتنی بر پیش بینی بهترین حدس ساخته شده بود ساخته شده بود. "هنگامی که تقاضا کاهش یافته است، سپس، زنجیره تامین مسدود. هیچ اتفاقی نیفتاد "Braitberg می گوید. "ما می دانستند که ما مجبور به ساخت سیستم جدید است که بهتر از تنها 'فشار." واکنش نشان می دهد" هر شرکت با عرضه آن به تقاضای مصرف کنندگان مطابق وظیفه است. در چرخه کسب و کار طبیعی چگونه به خوبی این کار انجام می شود که آیا شرکت سودآور تعیین کننده است. اما این رکود اقتصادی کنونی چیزی جز عادی است و کسب و کار در حال مبارزه برای ماندن مایع به سادگی. There are various strategies to help preserve working capital, including cutting head count, outlets, and manufacturing lines. But for most companies, the key to capital preservation will be how well they can reduce their inventory levels. Largely, companies are in survival mode, and they're looking to their supply chain management team to free up precious capital to help them do what. While it may not fall directly on IT executives to make that happen, their role in the equation is very strategic. With globalization, outsourcing, and increased compliance and security concerns, managing supply chain operations becomes increasingly complex. And shorter, more frequent product cycles targeting more-sophisticated markets create a need to manage more products and parts from remote locations. Add the pressure of shorter cash-to-cash cycles the time from when a business extends credit to build inventory until the time it gets paid - into the equation, and the need for an intelligent, nimble, and timely flow of information becomes critical. To have visibility as well as command and control, supply chain operations must be tightly integrated with the IT infrastructure. That isn't the case at many companies, and yet it may be the factor that determines success or failure as they endure and emerge from this downturn. Like bloodletting, reducing inventory is a delicate matter that most people would prefer to avoid. Inventory can range from materials, to parts, to fully assembled products. Nobody wants to run out. If there's too little, customers won't get orders in a timely manner and market opportunities will be missed. Yet if a company carries too much and demand drops, then the inventory must be "bled down," or reduced in price, until it has a buyer. During a strong economy and when cash flow is loosened, many companies can get by without rigorous inventory management practices, says Larry Lapide, director of demand management at the MIT Center of Transportation & Logistics in Cambridge, Massachusetts. But during a recession, he adds, "companies had better bleed down inventory to reflect the downturn is sales. If they don't, it just sits there." Inventory optimization is so critical now because of its impact on available cash, Lapide says. In accounting terms, inventory is an asset. So inventory that is on the books through manufacturing, assembly, and distribution represents credit-funded inventory. Whit credit at a premium, it's in a company's best interest not only to keep inventory levels tight, but also sell goods as soon as possible. Reducing costs and squeezing maximum utility out of fixed assets is nothing new to Black & Decker Corp.'s Hardware and Home Improvement Group in Lake Forest, California. The unit supplies hardware to big-box retailers that have responded to the economic downturn with new low-price strategies. It now falls on Scott Strickland, vice president of IS, to help the group squeeze down its own costs and maintain profit margins. "We had been loath to drive inventory down to this level," Strickland says. However, the company had gained invaluable experience by deploying an integrated inventory management system prior to the downturn. The result was that the key decision makers throughout its supply chain were operating with the same information, planners focused only on exceptions, and supplier and material issues were quickly resolved. The system, Strickland says, does the heavy lifting, and as a result, the unit has cut planning cycles from weeks to days and improved forecast accuracy by 10.4 percent. "If someone had told us nine months ago that we could lower inventory as fast as we could to address decline, we would not have believed it was possible," Strickland says. However, "because of the impetus on freeing up working capital, we have been focused on lowering our inventory and levels. We figured we could do this, and it turned out to not be the bad experience we had imagined." تلاش برای کاهش سطوح موجودی برای آزاد کردن سرمایه ثابت شده است موثر است که واحد سیاه & دکر و شرکای آن طور مشترک حتی پس از بهبود اقتصاد آن را به ساخت استاندارد عمل با توجه به Strickland می گوید. شرکت قطعات خودرو O'Reilly در اسپرینگفیلد، میسوری، با استفاده از موجودی به عنوان تفاوت رقابتی می گوید گرگ بک، معاون رئيس جمهور از خرید. یکی از بزرگترین خرده فروشان تخصص aftermarket خودرو قطعات، ابزار، تجهیزات و لوازم جانبی در ایالات متحده، O'Reilly به رکود اقتصادی متفاوت نسبت به بسیاری از شرکت های دیگر پاسخ دهد. "کسب و کار به دلیل رکود اقتصادی، افزایش است" را می گوید. "مردم خرید اتومبیل های جدید اما در عوض قرار دادن پول بیشتر به تعمیر اتومبیل." این را می گویند که چالش های زنجیره عرضه فاقد O'Reilly یا که آن پایین آن گارد اجازه می نمی باشد. به عنوان نتیجه اکتساب سال گذشته این شرکت افزایش تعداد کل فروشگاه خود را به بیش از 3,300 و اجرا در حال حاضر در ایالات 38. به مزیت رقابتی، استراتژی عالی O'Reilly به پر کردن موجودی را به صورت شبانه در همان زمان مدیریت تعداد فزاینده ای از محصولات و افزایش سطح خدمات مشتری است. همکاری بین عملیات زنجیره تامین و به استراتژی عالی O'Reilly بود. این شرکت با استفاده از منهتن همکاران شرکت دوباره پر کردن نرم افزار برای جمع آوری داده ها اطلاعات مربوط به محصولات نیم ساعت، در حالی که به روز رسانی از توزیع مراکز شبانه منتقل می شوند. سیستم دوباره پر کردن این داده ها برای تعیین پیش بینی برای این محصولات استفاده می کند. در نتیجه، موجودی چرخش O'Reilly 44 درصد افزایش یافته است و آن هنوز موفق به تحقق 97 درصد از درخواست های مشتری بلافاصله، با 3 درصد از طریق کانال های جداگانه به کار گرفته. در همان زمان شرکت سطح موجودی خود آزاد تا 60 میلیون دلار کاهش می یابد. شرکت ها می گویند که رانندگی هزینه از زنجیره تامین هدف مهم است اما سوال بزرگ است که به خصوص در طول رکود اقتصادی-وسعشان در زنجیره تامین خود آن سرمایه گذاری زیرساخت برای کمک را به است که اتفاق می افتد. دوایت Klappich تحلیلگر در شرکت گارتنر به که خواستار کوتاه اندیش و در دراز مدت روش پر هزینه. "اگر این تمرکز بر مسائل تاکتیکی کوتاه مدت در حالی که لازم برای کسب و کار بسیاری از شکاف بهترین نمایشی سازمان و سازمان های کوچک انجام پهن کند." سیسکو این درک است. پس از رکود سال 2001 آن را بزرگ ساخته شده سیستم سرمایه گذاری برای تبدیل آن "فشار-رانده،" زنجیره تامین مدل siloed به یکپارچه "کشیدن سیستم" که می تواند اطلاعات به موقع از تامین کنندگان و شرکای پایین عصاره. این پشت reorders داده است ارسال به سیسکو پس از پارامترهای مشخص و الگوریتم ها، باعث می شود به شکل "سیگنال خواست." سیستم در یک خلاء عمل نمی کند. سیسکو الگوریتم های پیش بینی آن توسط نمایندگان از آن بازاریابی، امور مالی، فروش، زنجیره عرضه، و آن بخش های زود، و از مشتریان کلیدی بهینه سازی شده است. به عنوان بخشی از فرآیند برنامه ریزی عملیات و فروش آن, این گروه به نظر مشترک تقاضای سیگنال این برنامه درایو های ورودی توافق بر عمل به چین ظرفیت تولید و موجودی استقرار و دیدار با سطح خدمات مشتری ایجاد کنند. به طور خلاصه، آنها را همراه با همان داده ها مطابقت مطلوب عرضه و تقاضا کار می کنند. سیسکو Braitberg می گوید "اگر هیچ سیگنال های کشش در حال حاضر، هیچ چیز به سیستم، آورده می شود". تولید کنندگان همچنان منبع و ساخت موجودی است که ممکن است در برخی از انبار انتظار مشتریانی که هرگز آن را ممکن است به خرید نشستن نیست. نقدی برای مقاصد دیگر آزاد است. در حالی که Braitberg این است که حتی تاریخ گذشته به عنوان یک الگو برای این رکود قرار گیرد نمی اذعان، سیسکو مطمئن باشید هنگامی که آن پایین می رود که آن دید بهتر به تقاضای بازار، و زمانی که ظهور ساقه سبز که آن آماده خواهد است. "ما در حال حاضر تکنیک در محل فوق حساسيت به تغييرات تقاضا می شود که" Braitberg می گوید "و ما می تواند راه ما را از طریق رکود مدیریت."