Analyzing CSR Reports of an MNC using Triple Bottom Line model and improving

accomplishment through Supply Chain Management

List of contents:

1. Abstract

1.1. Introduction

1.2 Role of Ciscos performance in Supply Chain Management

1.2.1. Stimulating transparency in supply chain:

1.2.2. Processing of audits in Supply chain:

1.2.3. Assessing of suppliers performance:

2A) Advantages and disadvantages to the operational objectives of the business through supply chain

2.1 Eminences of Supply chain in the field of business

2.2 Deprivations of supply chain in the field of business

2.3 Identification of supply chain risks

2B) Information technology as a facilitator for supply chain management

2.4 Supply chain performance in the enhancement of business

2.5 Examples for how business uses technology in its improvement

2.5.1 Network Resilience

2.5.2 Campus verbosity

2.5.3 Powersupply Backup

2.5.4 Security

3. Conclusion

4. Bibliography

1. Abstract:

The main aim of the article is to analyze the performance of on organization in accordance with TBL(Triple-
Bottom-Line) and Supply Chain Management. A survey resulted that TBL has its main focal point on
environmental area whereas supply chain sustainability has its focal point on economic area. Now-a-days
with the cogitation of TBL the concentration of supply chain management must enhance the whole supply
chains social, economy and environmental attainment (Timothy F. Slaper, Ph.D.)

1.1. Introduction:

Achieving a great performance of a company is to integrate social, economic and environment strategies
into governance where it is called as Triple-Bottom-Line. It can guide industries to be successful in the
future too. Cisco attempts to be a well- developed organization in the world. To close to it, Cisco
implements the strategy of using Triple-Bottom-Line model where it can be expounded as people,
presence and profits. Profit is one of the cadent to analyze our economic performance, where people are
also proportionately important. Whereas the concept of supply chain sustainability become a world-wide
requirement. A commission stated supply chain sustainability as meeting the requirements only at this
moment without the thought of future issues.

Ciscos Corporate Social Responsibility focus on linking innovation of technology and human to meet the
needs of the people in the planet. From the past 18 years, Cisco aided 5.5 million students from 170
countries. And only in 2016 the number has reached to 1 million students. In FY15 Cisco initiated
EnergyOps program to increase their energy efficiency and extended their goals to indulge the concept of
supply chain (CSR Reports, 2015). In FY16 employees of Cisco afforded nearly $12 million towards charities
and spent around 187,000 hours towards the organization which was 20 percent more than that was done
in FY15 (CSR Reports, 2016). The evolution of supply chain concept arises because of the drawbacks that
are with the regular orientation where traditional orientation goes on terms like

Entire cost on ownership

Target on price
Attainment of skills
Involvement in the phase of definition
Single-minded objectives

Where supply chain deals with terms like

Target on value
Entire augmentation to ownership
Skills on business
Multi minded objectives i.e., having focus on multiple areas to take right decisions
 Involvement in taking necessary decisions
Interactions with business stack holders (Srivastava, R., and W. C. Benton Jr, 1998).
1.2. Role of Ciscos performance in Supply Chain Management:

In FY16, Cisco Ethics Office received 871 cases seeking for the development of integrity which shows that
there were 584 cases increase when compared with FY16. This proved that enhancement of Cisco towards
up enhancing business. Cisco has adapted Electronics Industry Citizenship Coalition (EICC) Supplier Code
of Conduct (Code) as the mainspring for the survival of supply chain management and extended it towards
safety, health and ethics. This code helps to benefit our supply chain relations (CSR Reports, 2015). There
is a tremendous change around distribution of audits by supplier type and the change is shown below:

In the aspect to augment performance of Cisco through supply chain management it established global
event series where it discusses about Ciscos efforts to provide awareness for CSR challenges and
priorities. SCO also invoked Multi-Company-Rotation-Program to have an eye on professionals of
further generation. Ciscos Brewpub margin rate risen to 15.2 percent in 2016 as this was only 13.4
percent until the quarter end of 2015. In FY15, Supply Chain Program conducted by Cisco equipped a
thousand of sensors to supervise energy consumption in Malaysia. With this program, it is going to have
a look at how big data drive for the less consumption of energy and for the carbon footprints related with
their products. With the succession of Supply Chain Program in FY15 they are striving hard towards Supply
Chain Emissions Reduction Program that will help number of suppliers to avail for the following benefits.

Cost minimizations
Emissions minimizations
To increase accuracy and date transparency
Improved flexibility Supply chain in Cisco encourages human capital where it develops a
culture among employees to move collaboratively and attract top level employees. It
 encircles what employee needs from Cisco and what Cisco expects from employees. The
people of Cisco has three main parts which are

Connecting everything: Cisco supplies required tools for customers to achieve their targets and changes
the world to the best. The employees coordinate their work mainly to the needs of customer and make
no restrictions to what a customer needs.

Innovating everywhere: Cisco creates best platform for the employees to explore their ideas and sharpen
their skills to bring forward best technologies. Employees take bold decisions to fulfill the requirements
needed by a customer.

Benefit to everyone: Cisco opens door to employees to share their feelings, ideas and has a strong belief
of winning together. In these criteria, all sacrifice for shared success. Cisco offers respect, support and
care for the people around them.

A Day-To-Day approach: Culture of a company is figured out by the employees in that company. Cisco
comprises of employees who dedicate their entire hard work to the customers for the growth of the
company and for the progression of world (CSR Reports, 2016).

And the other business highlights of Cisco in 2016 when correlated with 2015 were of many. One of them
is that Cisco repurchased and retired 4.5 billion value of shares at an average cost of $20.97 per each
individual share for a purchase price of $95.1 billion. And some of the factors that proved Ciscos
performance improvement were

Number of hours offered by employees in FY15 where 187,000 were it was only 155,600
in FY15
The number of students having work in Cisco Networking Academy were 1 million in FY15
and 1.09 million in FY16
Cisco contributed $286 million towards Cisco foundation in FY15 and the number reached
to $309 million in FY16 (CSR Report, 2016).

1.2.1. Stimulating transparency in supply chain:

Enhancing of transparency in supply chain is one of the key factors that addresses many labor
standards, impacts on lifecycle environment and ethical sourcing. To designate our work with
partners and peers we must identify certain concerns and impacts. Supply chain transparency is
 the factor that stack holders are urging and governments are demanding too. The management
of transparency in supply chain needs encouragement for suppliers to promote CSR reports that
how they guide sustainability impacts, conducting site audits and requirement of suppliers to
report GHG emissions and goals via scorecard and CDP. To the end of FY15, 58 percent of Cisco
suppliers set targets to reduce GHG emissions from 56 percent to down.

1.2.2 Processing of audits in Supply chain:

Cisco completed audits for 46 suppliers in FY15 and prioritized self-assessment process using EICC.
Their aim is to audit component suppliers for every two years and they reached auditing 25
percent high-risk suppliers in FY14. Auditors can use audit tools and standard protocols developed
by EICC to observe documentations, conducting of site tours and evaluating how suppliers are
going on with their own supplies. If the suppliers come across any findings they need to provide
a corrective plan within 30 days except for the plans that require long-term improvement. Totally,
24 suppliers, 11 from contract manufacturers and 13 from component suppliers will be observed
for a period of six months to manifest improvement with EICC work hours and for rest days too
(CSR Report, 2015).

1.2.3. Assessing of suppliers performance:

Cisco use the approach of using scorecards to assess sustainability performance at least once per
year along with business reviews that are held regularly. Monitoring of scorecards includes
collaboration of cost, quality, responsiveness and range in quality. To be as best key suppliers they
need to maintain good scores. Defining scorecards helps suppliers to get a clear picture of what
Cisco is aiming at and illustrates which is best for the business to develop. Among total score in
score card 5 to 10 percent represents for sustainability. The sustainability includes affirmation of
the code, report on health and illness rates, employee turnover and working hours, reporting of
GHG through CDP.

2A) Advantages and disadvantages to the operational objectives of the business through supply chain:

Mentzer defined that supply chain of traditional type is aged due to the evolvement of e-commerce and
many technologies which made companies forthcomings towards market fulfillments. In thought of this
a new type of supply chain has emerged which was called as Virtual Supply Chain where it symbolizes an
organization to be effective and efficient. A virtual supply chain can easily adopt to the changes that was
going on in the environment. By managing virtual supply chain efficiently, it leads to gain business benefits
such as customers demand can be fulfilled by supplying right products, improving productivity basing on
streamline activities (Cisco Data Virtualization). Cisco products use the model of configure-to-order (CTO)
where products are built on the order of the customers. Ciscos has the capability to bring their own supply
chain and then indulging into core operations of their own firm. In the Atlanta division Cisco had its own
process of supply chain and ERP (Enterprise Resource Planning) system. Along with many of logistic
suppliers and manufacturing customers the supply chain of Cisco encloses on 8 centers for strategic
logistics, shipments of around 9 million to the end of 2014 and product IDs of more than 25,000. There
were many lessons learned by Cisco to provide best practices for the organizations commencing on supply
chain management. The lessons were establishing a team to reduce employee exhaustion, nourishment
of relationship with all the manufacture and logistic providers, to encourage well-equipped decisions and
resolutions, using of combined technology along with supply chain for fast decision making (Cisco, 2017).

With the support of Web-based-tools Cisco saves $500 million from internal operations with suppliers
and customers. With the evolution of e-SCM firms benefited more demonstrating to cost reduction and
improved responsiveness of supply chain. Some of the benefits are Information sharing, best relationship
among partners, improvements for customer satisfaction, have a look on customer needs, easy adoption
to market strategies (Pedro da Cruz Caria, 2017).

2.1 Eminences of Supply chain in the field of business:

Cisco embedded supply chain management into business firms to manufacture partners who can
produce finished cisco products, provide products as per our specifications, providers for logistic
services to distribute products to customers. In FY15 Cisco modernized the language that how to
communicate with manufacturing partners to enhance in the fields of Code of Conduct and
supplier diversity. In addition to that 81 percent of cisco employees gone through human rights
training where it indulges in respecting human rights, responsibility in eradicating human right
offenses. In this year, itself Cisco maintained alliance with Center for Responsible Business at
University of California Berkeley Haas School of Business to publicize the concept of supply chain
management in school curriculums too. It believed that students can learn about challenges faced
by a leader (CSR Report, 2015). Cisco operated Supply Chain Operations Hackathon allowing
teams to work with IT continuously for 48-hour period to achieve a goal of dehumanizing real-
time analysis and submission of audits over the organization. The main objectives that Cisco
followed are authorizing GHG in emission reduction for the operations in-supply chain, working
 with partners in university to inculcate supply chain management into business education to
provide professionals in supply chain (CSR Report, 2016). Two things that developed the growth
of Cisco are limitless capacity of virtual supply chain and high reliability among customers. John
Chambers, who is president and CEO of Cisco explained that Cisco had its arrangements with
contract equipment manufacturers (CEM) to estimate the difference between their own plants
and CEMs in Taiwan (Booz & Company, 2001).

2.2 Deprivations of supply chain in the field of business:

In addition to the benefits with virtual supply chain Cisco also faced many disadvantages such as
predication of market demand is impossible, no fast response to changing market trends, life-
cycles of a product are very high, problems that people face with trust and data security, less
chance for loyalty and bonding (Jaana Auramo & Jouni Kauremaa, 2001). Most manufacturers
believe that there is a high risk prone to supply chain in the coming years where terrorism, natural
disasters, dependence on suppliers are the major areas which need strong potential in supply
chain risk management. The disasters that occurred due to supply chain had its impact on certain
factors like finance, brand equity, stock exchange etc. (Michael Schwarz, 2008). Since 1995, every
year at-least one company was facing issues due to supply chain. Some of the companies were:

Company Issue Impact

Nike Got troubled with planning of new system There is a drop fall of $100 million in the
aspect of revenue and stock reduced to 20
percent.

Apple Apple suffered with demand for Power Macs It loses PC market share which will not be
and didnt delivered the goods recovered.

Adidas New warehouse system and DC automation has Loss in market shares that persisted for
not worked many years.
GM Robert Smith, CEO of GM incurred a lot on robot Also leads to market shares to fell
technology that has no impact

Hershey Foods Implementation of warehouse order There was a loss in revenue of $150 million
management causes Hershey to miss shipments and stock number goes down from 57 to
38, profit reduced to 19 percent.

(Supply Chain Digest).

Cisco supply chain had its great impact on VoIP (Voice over IP projects) projects such as IP phones and
integrated service routers. Chris Church, who is technical service manager for Cisco Midwest observed
that there are long times for ASA (Adaptive Security Appliance) firewalls where they thought of four-to-
six-week estimation but it reached to six-to- seven months (Jessica scarpati, 2010). For the first time in
1999 Cisco faced memory shortage which affected its earnings and problems terminated to $2.25 billion
(Booz & Company, 2001).

2.3 Identification of supply chain risks:

All the problems raised by supply chain are not equal, correspondingly the consequences to solve
these problems are also not equal. Therefore, it is better to look after various sources of supply
chain problems that are going to arise. These sources can be breakdown in equipment,
discontinuity in supplier performance, accidents in the manufacturing plant like fire explosions,
financial crunches, unexpected weather conditions, hurricanes and may be due to terrorist or
political instabilities.

Generally top consultancies do not consider effects like natural disasters like earthquakes,
hurricanes etc., Many companies and individuals do not bother about the prior occurrence of
natural disasters they act after the event occurs. So, there is no certain action to be planned to
get rid of these activities. Evaluation of supply chain risks can be done by

Understanding companys obligations towards supply chain risks

Designing liabilities and roles towards risk management process,

Auditing of supply chain standards and reviewing of implementation plans,

Identifying effects on companys goodwill, assets and inventories,

 Providing feedback to supply chain participants and to the management based on their
performance in the development of plans and objectives (Dhirendra Singh Parihar & Manmohan
Rahul, 2003).

2B) Information technology as a facilitator for supply chain management:

The important factors that had a strong impact on the development of information with supply chain
were customers should be provided with efficient and effective services, to reduce human requirement
to a great level (Lidija Pulevska-Ivanovska & Neda Kaleshovska, 2013). Sharing of information between
partners in supply chain is accomplished by implementing following initiatives which are

Using of bar-code systems

Usage of Electronic Data Interchange (EDI) to establish communication between different
branches.
Implementing web services for communication among partner

The functional roles of IT in SCM are transaction execution, Coordination and collaboration and supporting
decisions. Many organizations have practiced e-SCM such as Dell, Wal-Mart, Cisco, Lanier Worldwide Inc
etc., where cisco is one of the leader in networking that make people connect, collaborate and
communicate. It has adopted e-SCM to work among various customers, suppliers, manufacturers and
distributors. From the past 10 years Cisco maintained usage of internet from $1 billion to $24 billion
increasing satisfaction for customers and revenue improvements. At present Cisco shoots to 90 percent
of their sales through online without any help from any employee of Cisco. Cisco has benefited
approximately $270 through the management of e-SCM.

2.4 Supply chain performance in the enhancement of business:

The impact of supply chain is mainly on four areas which are

Information assimilation: It refers to allocation of information among supply chain members. It

can include any type of data like shipment details, plans regarding to promotions, production
schedules and can influence supply chain of other members also. This type of information can be
accessed by real-time parties too.
Planning in synchronization: It describes about combined design of a product and plans for the
product enhancements, replenishments and innovations. So, this type of planning creates
 coordination among members. Hence members in supply chain have their plans coordinated so
to meet the same objective which will be the final demand of the customer. Here we come across
the concept of Collaborative Planning, Forecasting and Replenishment (CPFR) initiative where
both buyer and seller make use of internet, detect variances and discuss to accustom those
differences. Presently, e Voluntary Industry Commerce Standards Committee focuses on
formalizing the technology framework for CPFR and it supports companies to make use of internet
along with electronic bulletin boards to run after collaborative efforts.
Coordination in workflow: It refers to the concept of how to share the information among
supply chain partners rather than thinking of what to share. Attaining of product enhancement
in terms of cost, quality and time can be done by the involvement of multiple companies so that
all are committed to achieve similar targets. In some cases, supply chain partners can depend on
technology ideas to dehumanize all the work-flow steps.
Employing new business models: Adopting new business models in supply chain integration helps
to improve the efficiency. It allows partners to redefine flows in logistics so that there is
improvement in overall efficiency. A network of supply chain promotes new products,
accompanies mass communications and promotes new customer segments and markets (Hau L.
Lee & Seungjin Whang, 2001).

2.5 Examples for how business uses technology in its improvement:

2.5.1 Network Resilience: The enterprise network in Cisco is serving 36,000 employees among 70
countries world-wide carrying large volume of data in video, voice and data freight. To encourage
business resilience Cisco developed many recovery plans to arrange potential interruptions across the
company even when huge earthquake happens at company headquarters in California. Craig Huegen,
who is chief network architect at Cisco said that Implementing IT infrastructure and network for the
companys growth is their main goal. Network Resilience in Cisco is totally based on design of high-
availability network where it automatically balances connections across failures. This design
developed by Cisco protects individual devices and also huge network infrastructure from power
enormities, viruses, connection failures and from many events .The design of network resilience
mainly includes backup WAN links at the required junctions and access points, IOS software of Cisco
supports many routers and switches such as stateful switchover (SSO), Hot Standby Router Protocol
(HSRP) and nonstop forwarding (NSF), auditing Cisco network 24 hours a day can reduce impact on
business activities and users.
 2.5.2 Campus verbosity: At headquarters of Cisco many metropolitan and local area networks
(MANs/LANs) are established to serve more than 50 buildings with a design where all the routers are
in pairs, equipped with full bandwidth. Spanning tree is also developed between 6500 series switches
to reduce downtime at the time of switch failure. A desktop network in San Jose operates at the speed
of 10 Gigabit ethernet to provide links among Cisco centers. To maintain reliability, every building has
at least two fiber paths that connects other building too. At the Cisco campuses around United States
network links are configured in distribution, core and access layers. To provide same bandwidth across
many offices leased-line SONET circuits are used and if they are unavailable, VPN (Virtual Private
Networks) circuits are used to provide backup to Cisco WAN.

2.5.3 Powersupply Backup: All the offices at Cisco are supported with UPS (Uninterrupted Power
Supplies) that supplies power to all routers, switches and IP phones even for three hours are more. If
power failure occurs employees have enough time to move backward to their business calls so that
there is no loss to the data. Two diesel generators, multiple UPS systems are developed to provide
backup for Cisco data centers such that there is no loss of data at the time of long period of power
failures (Cisco, 2007).

2.5.4 Security: Technologies and procedures adopted by Cisco regarding security are employed in the
entire company to control network access, detect attacks on data storage and preventing separation
of Cisco IP phones and desktops. Many teams are located at various countries to respond fast to the
incidents and to observe security status through virtual operations center. Cisco addresses the
problem of Slammer virus in 2003 where Cisco NetFlow Technology detected the issue in six minutes
to enhance that this virus has no impact. If any attacks were not resolved by traditional antivirus
softwares then Cisco Agent Security software looks after the issue and it was installed in 38,000
desktop computers, notebook computers using by Cisco employees. In addition to many softwares
used by Cisco it also uses many virus scanning tools and e-mail antispam service that helped to solve
many virus problems where Cisco have never seen before. The case study of Cisco Security Agent
describes terms like working of Cisco Security Agent, minimizing the impact of mass-mailing and
deploying of Cisco Security Agent policies in IT process. After an attack faced by Cisco it added an
additional layer so that it reduced the cleanup costs required by Cisco IT.
3. Conclusion:

At the end, Supply Chan Management helps for the proliferation of Cisco in various aspects. In FY15 and
FY16 Cisco initiated survey called People Leader Feedback where people had to provide commitments
regarding how their leaders are up to their obligations. To this survey approximately 35,000 people
provided retaliations and includes 72,700 exact suggestions (CSR Reports, 2015 & 2016). Cisco also
believes that supply chain promotes customers offering world-class services. The Supply Chain
Management Organized Leadership and Team intelligence program to meet a vision of providing best trios
having focus on four aspects like elevate leaders, activate teams, accelerate with digitalization and apply
intelligence (CSR Report, 2016). Due to the continuous changing in economic environment firms need to
develop according to the market strategies. The evolution of internet has made complications to the firms
in various forms like voice, video and data. So, companies must compete with these vast growing
technologies and transform into decisions that make profit to the organizations. Companies that follow
these programs can have an estimation in inventory reduction to 10 to 15 percent, renovation in employer
performance to 30 percent and savings of millions in airfreight services. To accomplish these, they need
to go on some challenges like expansion in the environment of decision making, counteraction to change
according to market, accessing to use and enhance information systems (Ram Muthukrishnan, 2012)

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