John O’ConnorJohn O’Connor

Director, Global Supply Chain ManagementCisco Systems, Inc.

SSupply upply CChain hain RRisk isk MManagementanagement

Business Continuity PlanningBusiness Continuity Planning

CMs SLCs Components

BCP Cisco RegularBCP Cisco Regular

BCP Site ResiliencyBCP Site Resiliency

BCP Validation BCP Validation

<10 suppliers < 5 suppliers

> 500 suppliers

BCP LightBCP Light

Contact information, site locations, TTR & alternates

Contact information, site locations, TTR & alternates

BCP data including emergency contacts, primary & alternate site locations, part site mapping, and Time to Recover (TTR)

BCP data including emergency contacts, primary & alternate site locations, part site mapping, and Time to Recover (TTR)

Onsite crisis drills to test supplier Cisco-Specific BCPs

Onsite crisis drills to test supplier Cisco-Specific BCPs

Physical site preparedness questions in the Cisco Specific BCP

Physical site preparedness questions in the Cisco Specific BCP

© 2008 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 3

Customer ImpactCustomer Impact

Product B Product A

Product C Product D

Max Rev ImpactMax Rev ImpactTTR: XX Weeks

Max/ Rev Impact: $XXM

Partner ImpactPartner Impact

No Impact(CM 1, CM2, CM3, CM4)

No Impact(SLC)

Moderate Impact(4 suppliers)

Crisis Response: ChengduCrisis Response: Chengdu

Events FocusEvents Focus

© 2007 Cisco Systems, Inc. All rights reserved. Cisco Confidential 6

Image NASA© 2008 Europa TechnologiesImage © 2008 DigitalGlobe

© 2008 Tele Atlas

Image NASA© 2008 Europa TechnologiesImage © 2008 DigitalGlobe

© 2008 Tele Atlas

Image NASA© 2008 Europa TechnologiesImage © 2008 DigitalGlobe

© 2008 Tele Atlas

Image NASA© 2008 Europa TechnologiesImage © 2008 DigitalGlobe

© 2008 Tele Atlas

Image NASA© 2008 Europa TechnologiesImage © 2008 DigitalGlobe

© 2008 Tele Atlas

Risk: Earthquake HeadquartersRisk: Earthquake Headquarters

Risk: EarthquakeFoundriesRisk: EarthquakeFoundries

Risk: EarthquakeSingle / Sole Sourced PartsRisk: EarthquakeSingle / Sole Sourced Parts

Risk: Typhoon & Flooding Single / Sole Sourced Parts CM concentration

Risk: Typhoon & Flooding Single / Sole Sourced Parts CM concentration

Risk: Typhoon & Flooding Highest Revenue CM Site

Risk: Typhoon & Flooding Highest Revenue CM Site

San JoseSan Jose

CM siteCM site

Hong KongHong Kong

JapanJapan

TaiwanTaiwan

Products FocusProducts Focus

100%All200 Product Families

8500 Products

50%Revenue Coverage

TopRevenueProducts

25Product Families

100 Products

25Product Families

100 Products

80%

Top Revenue Product Families

25 Product Families

4000 Products

How We Deliver Resiliency:How We Deliver Resiliency:Sustaining ProductsSustaining Products

TTR GoalsTTR GoalsT0 T75Weeks

MfgTTR

TestTTR

ComponentTTR

2nd source, alternate supplier site and/or inventory2nd source, alternate supplier site and/or inventory

Alternate site readinessAlternate site readiness

Lead-time programs and/or inventory for test equipmentLead-time programs and/or inventory for test equipment

Time to Recover (TTR): number of weeks required to restore 100% operational output following a supply chain disruptionsTime to Recover (TTR): number of weeks required to restore 100% operational output following a supply chain disruptions

How We Deliver Resiliency:How We Deliver Resiliency:New ProductsNew Products

Phase II – FY’09 Phase II – FY’09

Comp TTR

First Customer Ship

Mfg TTRTest TTR

TTR-based SC design

Risk-based

bus. awards

Supply ChainDesign for RiskSupply Chain

Design for RiskProduct

Design for RiskProduct

Design for Risk

TTR-based risk rating

BCP requiremnt Risk Board

How We Measure Supply Chain How We Measure Supply Chain ResiliencyResiliency

GoalGoalIndex MetricsIndex Metrics

Not ResilientNot Resilient

Very ResilientVery Resilient10

1

2

3

4

5

6

7

8

9 Manufacturing Recovery

Manufacturing Recovery

TestRecovery

TestRecovery

Component Recovery

Component Recovery

Single / Sole Sourced

Single / Sole Sourced

Likelihood of Disruption

Likelihood of Disruption 44

X Weeks X Weeks

X WeeksX Weeks

X WeeksX Weeks

xx%xx%

Resiliency by Business Unit Resiliency by Business Unit BU 1BU 1

NotResilient

NotResilient

VeryResilient

VeryResilient

10

1

2

3

4

5

6

7

8

9

BU 2BU 2

NotResilient

NotResilient

VeryResilient

VeryResilient

10

1

2

3

4

5

6

7

8

9

BU 3BU 3

NotResilient

NotResilient

VeryResilient

VeryResilient

10

1

2

3

4

5

6

7

8

9

BU 4BU 4

NotResilient

NotResilient

VeryResilient

VeryResilient

10

1

2

3

4

5

6

7

8

9

BU 5BU 5

NotResilient

NotResilient

VeryResilient

VeryResilient

10

1

2

3

4

5

6

7

8

9

Key Take AwaysKey Take Aways

BCP program is a necessary foundation

Many ways to focus your risk management program – pick one!

Design for Risk approach for highest impact

SCRM standards needed!

BCP program is a necessary foundation

Many ways to focus your risk management program – pick one!

Design for Risk approach for highest impact

SCRM standards needed!