QUESTION ONE (20 MARKS)

Read the mini case below and answer the questions that follow;

CISCO SYSTEMS

Most people who have heard of Cisco Systems (www.cisco.com) would not be surprised to learn that Cisco is the worlds largest supplier of telecommunications products. What they may be surprised to discover, however, is the answer to the question, What does Cisco manufacture? Answer: Absolutely nothing! Cisco sells solutions to their customers, but their products come from an innovative virtual manufacturing company arrangement with Jabil Circuit and Hamilton Standard, two large electronics suppliers and manufacturers. Lets look at an example of how these three companies collaborate to bring a Cisco solution to market.

An order placed for a Cisco product arrives simultaneously at Cisco in San Jose, California, and Jabil in St. Petersburg, Florida, via Ciscos online ordering system. Jabil immediately starts to build the product by drawing parts from any or all of the three onsite inventories: one owned by Jabil, one belonging to Cisco, and one owned and controlled by Hamilton Standard. When the manufacturing process is complete, the product is tested and checked against the order in St. Petersburg by computers in San Jose, then shipped directly to the customer by Jabil. The shipment triggers the generation of a Cisco invoice sent to the customer and electronic bills from both Jabil and Hamilton Standard sent to Cisco in San Jose. Ciscos virtual manufacturing company alliance with Jabil Circuit and Hamilton Standard gives them an agile, build-to-order capability in the fiercely competitive telecommunications equipment industry.

REQUIRED

1. Identify two main strategy presented in the case study that Cisco has employed and explain any three benefits of this strategy. (5mks)