© 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential 1 Supply Chain Risk Management – Chengdu EQ Lessons Learned John O’Connor Erica Agiewich

© 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential 2 Crisis Management The Manufacturing Crisis Management Team (MCMT) is a cross functional team to preserve continuity of supply to customers in the event of a supply chain disruption  Objectives: Ensure continuity of supply to customers Optimize operational recovery through effective coordination of MCMT functional teams and members for internal or external disruptions Provide critical supply chain business continuity planning data and documents and analysis Support theater, corporate and executive crisis management teams as necessary

© 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential 3 MCMT Activation & Resolution Process 1.Event Notification (NC4, SSBR, news, employees or 2.Log Event in Crisis DashboardCrisis Dashboard 3.SCRM Team Event Assessment (sites, revenue) 4.Activate MCMT Incident (L0-L3) 5.Alert MCMT Members (meet as needed) 6.Incident Resolution Valid SC Risk? YES

© 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential 4 Day 1  Initial NC4 notification on Sunday night (steps 1-2)  MCMT incident created Monday morning based on initial mapping of 8 sites (1 with significant revenue impact) in a 400m radius (step 3)  MCMT met 2x on Monday to determine go forward plan (step 4-5). Vendor managers checked: Commodity suppliers initially identified in EQ zone China factories for supply chain impact Airport, road, rail status in EQ zone  Cisco TCMT initiated to track employee safety Crisis Management Case Study: Chengdu

© 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential 5 Days 2-5  MCMT met daily rest of week to validate scope, status with focus on employees, sites, transportation  Number of sites of concern in earthquake zone scaled down as each supplier reported back no impact other than transportation delays  By end of week problem narrowed to one supplier whose factory suffered damage  Supplier confirmed impact parts from that site and Cisco started to assess product level impact Crisis Management Case Study: Chengdu

© 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential 6 Week  MCMT met 1-2x/week to focus on recovery of 15 parts made at the impacted suppliers (step 6)  Commodity team worked with suppliers to understand factory ramp & commit and working with alternate suppliers  Ongoing revenue impact analysis by planning team Crisis Management Case Study: Chengdu

© 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential 7 Impact Analysis  CPNs  Suppliers/Sites  Emerg. contacts Max Rev Impact TTR (Weeks): TBD Max/Rev Impact: TBD Partner Impact No CM Impact No SLC Impact Moderate Impact Crisis Management Case Study: Chengdu Manufacturing Sites Logistics Centers Suppliers

© 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential 8 Crisis Management Case Study: Chengdu

© 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential 9 Lessons Learned  MCMT activation process well documented but recovery processes not sufficiently detailed Need criteria for when MCMT hands off to operations Need playbooks for different types of situations

© 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential 10 Lessons Learned  Communication Balance between keeping communication tight vs. including appropriate SMEs Crisis dashboard access Content & timing to extended mfg team and company Need to streamline communications when multiple individuals associated with a site and/or supplier

© 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential 11 Lessons Learned  Roles & responsibilities Need to set expectations for each functional group (who delivers what when) High turnover on MCMT is a training challenge MCMT reps delegate down – proxies not trained and/or not decision makers

Q&A

© 2007 Cisco Systems, Inc. All rights reserved.Cisco Confidential 13