Interview with Angel L. Mendez, Senior Vice President, Customer Value Chain Management, of Cisco Systems, Inc. |
 You head up a relatively new organization at Cisco, Customer Value Chain Management. What is your role?
We formed the new organization in 2008 by bringing together our manufacturing and supply chain teams with our order management and corporate quality management organizations. Our vision is to increase alignment and collaboration across these teams in order to provide our customers with an unrivaled, end-to-end experience. That requires our leadership team to manage an organization of 9,000 people at 90 locations in more than 30 countries, as well as a partner network of suppliers, contract manufacturers, and call center operators. It's a job that involves product design and planning, sourcing thousands of components, building hundreds of product families and solutions, then fulfilling and supporting them for a diverse worldwide customer base. Cisco's CEO, John Chambers, summed up the job when he said: "We need to support any innovation and any business model in any part of the world.”
What's a value chain and how is it different from a supply chain?
We define the value chain as the network of integrated Cisco and partner activities that drives innovation and value to our customers. The value chain, as we see it, is demand driven, distributed, global and collaborative in nature. We are as focused as ever on improving operational excellence and driving down costs, but we balance those traditional supply chain goals with a strategic focus on meeting specific customer needs, capturing new market adjacencies, and driving innovation to customers faster and more reliably than our competitors.
What are your primary areas of focus these days?
One major focus is quality and improving the customer experience across every area of interaction with Cisco, or what we call "customer moments of truth". For example, we have formed dedicated Customer Value Teams that bring together subject matter experts from across different functions to meet the requirements of our strategic customers. We are also in the process of transforming our key metrics to measure success in terms of impact on customers and other key stakeholders.
What are the biggest internal challenges for manufacturers to achieve supply chain excellence?
The principal internal challenge that we face is to manage the growing complexity that follows from changing customer needs, new business models, constant innovation, and the many added factors-such as country-of-origin requirements and product localization-that accompany globalization. The challenge is to manage this complexity while holding down costs and not sacrificing productivity through enormous new investments in IT systems or layers of bureaucracy. Increasingly, we are finding the best solutions in collaborative Web 2.0 technologies such as online web conferencing, TelePresence, Wikis and other flexible software tools that scale globally at low cost while replacing transactions with real-time interactions that speed decision making and streamline key processes.
What are the biggest external challenges in achieving supply chain excellence?
A major external challenge is staying out in front of changes in the macro economy, which as we all know have been difficult to predict. We have worked hard to build out our Demand Management and planning capabilities over the past several years and make the transition to a lean supply chain driven by customer orders and demand. Our ability to improve our demand signal and extend Lean principles across our suppliers, contract manufacturers, and distributor channel really paid off during the recent economic downturn. So did our ability to use Web 2.0 collaboration technologies to monitor the resiliency of our suppliers. During the downturn we were able to dramatically reduce inventory in our supply chain with minimum excess and obsolete inventory exposure, and we did this while maintaining high levels of customer service. Now, as we see signs of improvement in the economy, the challenge is to be equally successful in judging the upturn and responding to increases in demand.
During this economic downturn, how do you keep your entire organization motivated?
You could say that we stayed motivated by preparing for the upturn. We viewed the downturn as an opportunity to shift resources toward strategic priorities and gain market share. I think most of us at Cisco felt fortunate and excited to work for the kind of global leader that provides such an opportunity. For true supply chain professionals, there is also satisfaction in applying all that you've learned to navigate through tough times. We have had to manage expenses more carefully, but the added discipline helped us find new and smarter ways to get things done that will deliver even greater benefits as the economy improves.
In volatile times, risk management becomes more critical than ever. How does Cisco approach mitigating risk in its value chain?
We take a comprehensive approach to risk management that includes business continuity planning, crisis management, and close monitoring of product and supply chain resiliency. We use our collaboration and communications technologies to stay in close communication with our suppliers and we maintain detailed resiliency dashboards that let us know when we need to take remedial action. Our founding leadership in the Supply Chain Risk Leadership Council helps us collaborate with other leading supply chain companies to develop and share risk management standards and best practices.
How is Cisco addressing the market's increasing focus on "green" supply chains and reducing a company's carbon footprint?
Our Customer Value Chain organization plays an integral role in delivering on Cisco's social responsibility and Green strategies. Our corporate strategy has several components, including the development of products and solutions architectures that help our customers reduce their carbon footprints. TelePresence, for example, which is Cisco's highresolution videoconferencing system, has helped Cisco and our customers dramatically reduce both carbon emissions and travel costs. Within our value chain organization, our Green strategy encompasses product design and packaging, sourcing, manufacturing, transport, and the recycling and reuse of our products. We ensure that our products and our customers comply with environmental regulations around the world, but our vision is to go beyond mere compliance and work with our customers and suppliers to innovate and lead in Green solutions. Toward that goal, we work with various industry and scientific groups to develop and implement best practices for environmentally sustainable manufacturing and supply chain solutions.
What's your priority for the coming 2-3 years? 5-10 years?
Our stated goal is to provide our customers with the world's best value chain by 2012. It's not in our nature to aspire to stay in the top five, or to be second best. We want to be the best, and to achieve that goal we need to continue to deliver for our customers faster, more reliably, and at the highest levels of quality, and we need to do it through a segmented customer experience that meets the specific needs of customers in different market segments-from the world's leading telecommunications service providers to home consumers. Looking further ahead, we will need to support an even greater range of business models as Cisco moves into new market adjacencies and becomes a much larger company. This growth direction puts a premium on our ability to deliver flexible, scalable and re-configurable systems and processes.
Cisco recently opened a Supply Chain Leadership Institute in China, together with Fudan University in Shanghai and Stanford University. What motivated you to make this unusual type of investment?
The Supply Chain Leadership Institute illustrates our approach to globalization, which we see as an opportunity to benefit from the talent, innovation and growth markets available in all parts of the world. This educational program helps us partner with China's leading corporate, government and educational institutions to drive supply chain innovation and develop future talent and leadership. It's a great way for Cisco to effectively operate in China by forming strong connections and relationships that support business growth. It also provides opportunities for our own Cisco leadership to learn and lecture, as I did at Fudan this summer.
What are the main skills and attributes that have helped you reach your current position?
To begin with, I was very fortunate to start my career with GE, a company which is likely the best in the world when it comes to leadership development. That experience engrained in me a series of leadership values and change management skills that have served me well over the years. In addition, I think an informal style, a focus on people, and my interest and experience in global business and cultures, have allowed me to lead large and complex business transformations on a global scale. I also believe in the process of constant learning and preparation, something upon which I rely on every single day. Finally, a good sense of humor is essential…. I never take myself too seriously. In a profession where so many things can go wrong every day, humor can keep you calibrated.
Who do you rely on for advice?
I'm fortunate to have a tremendous senior leadership team that is not afraid to speak openly about the obstacles we face and offer solutions that approach problems in innovative ways. We put a great deal of emphasis on leadership development in our value chain organization and cultivating a collaborative, high performance culture among our people at all levels. Over the years I have also counted on valuable coaching from close friends and former bosses. I have been fortunate to work with and for some excellent role models from which I have learned tremendously.
What have you learned as SVP of Customer Value Chain Management that has surprised you or changed the way you do business?
I continue to be amazed by the opportunities that exist across the value chain we manage. Just when you think a process or plant is optimized, you come to find yet another long list of things that can be done better. As we formed CVCM last year, we knew there were plenty of areas that needed to be improved. Nine months into our journey, we're finding many more opportunities than initially met the eye….and we're just getting started. More broadly, I continue to be impressed by the excellent people in my team. If you lay out a vision and nurture a culture focused on excellence, talented people can do amazing things. We really have an infinite capacity to improve everything we touch.
Turbulent times should be the best time to implement changes. However, companies tend to get paralyzed due to uncertainty in the market or human capital. What is your advice to maximize the opportunities to implement changes during tough times?
Three factors stand out. First, I think it's crucial that you have strong standards and values and a clear vision of why your company is in business in the first place. Second, you need to invest in talented, resilient people who have the flexibility and the energy to deal with change. Third, I think it's critical to develop leaders in your organization who can simultaneously manage both business transformation and execution on your immediate targets. That is the essence of the high performance culture that we work hard to develop in our value chain leaders-constantly improving, achieving new levels of excellence, and then starting over and aiming even higher. Business and the economy may go up or down, but the journey to excellence never ends. |
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| October 2009 |
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