1. Supply Chain Risk Management
John O’Connor
Director, Global Supply Chain Management Cisco Systems, Inc.

2. Business Continuity Planning
CMs
SLCs
Components
BCP Light
BCP Cisco Regular
Physical site preparedness questions in the Cisco Specific BCP
Contact information, site locations, TTR & alternates
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
BCP Validation
BCP Light process is semi-annual
Cisco – Specific BCP requests is annual for a subset of suppliers
Generic BCPs are requested of remaining suppliers
BCP Site Resiliency
<10 suppliers
< 5 suppliers
> 500 suppliers

3. As I mentioned in our Vision, we want to be the leader in recovery times for our industry
This means that we need to focus on each products recovery profile that comprehends Mfg, Test Equipment and Component recovery times and drive each of those towards our goal
For manufacturing this means alternate site readiness that includes an alternate that is pre-qualified and can deliver the required capacity within the TTR goal for PCBA, DF, Hub and SLC sites.
In order to bring up a product at an alternate site we need to have test equipment delivered within the TTR goal, to that end we are focusing on lead time programs with key suppliers. For example, we have an agreement with on of our chamber suppliers to provide 10 pieces of equipment within 10 weeks
One of the largest exposures in our component supply base, which extends to thousands of locations around the world. In order to deliver resiliency we are working with GSM to identify the parts that are the most risky and develop alternatives for manufacturing those components
© 2008 Cisco Systems, Inc. All rights reserved.
Cisco Confidential
Presentation_ID 3

4. As I mentioned in our Vision, we want to be the leader in recovery times for our industry
This means that we need to focus on each products recovery profile that comprehends Mfg, Test Equipment and Component recovery times and drive each of those towards our goal
For manufacturing this means alternate site readiness that includes an alternate that is pre-qualified and can deliver the required capacity within the TTR goal for PCBA, DF, Hub and SLC sites.
In order to bring up a product at an alternate site we need to have test equipment delivered within the TTR goal, to that end we are focusing on lead time programs with key suppliers. For example, we have an agreement with on of our chamber suppliers to provide 10 pieces of equipment within 10 weeks
One of the largest exposures in our component supply base, which extends to thousands of locations around the world. In order to deliver resiliency we are working with GSM to identify the parts that are the most risky and develop alternatives for manufacturing those components

5. Crisis Response: Chengdu
Customer Impact
Product B
Product A
Product C
Product D
Partner Impact
No Impact (CM 1, CM2, CM3, CM4)
No Impact
(SLC)
Moderate Impact
(4 suppliers)
Sample disruptions that demonstrate our ability to isolate the revenue impact of a disaster regardless if it is at a supplier, CM or Cisco location.
We know the products impacted as well as the recovery times
Max Rev Impact
TTR: XX Weeks
Max/ Rev Impact: $XXM

6. Events Focus Risk: Earthquake Headquarters San Jose Risk: Earthquake
Foundries
Taiwan
Image NASA
© 2008 Europa Technologies
Image © 2008 DigitalGlobe
© 2008 Tele Atlas
Image NASA
© 2008 Europa Technologies
Image © 2008 DigitalGlobe
© 2008 Tele Atlas
Image NASA
© 2008 Europa Technologies
Image © 2008 DigitalGlobe
© 2008 Tele Atlas
Image NASA
© 2008 Europa Technologies
Image © 2008 DigitalGlobe
© 2008 Tele Atlas
Image NASA
© 2008 Europa Technologies
Image © 2008 DigitalGlobe
© 2008 Tele Atlas
Risk: Earthquake
Single / Sole Sourced Parts
Japan
Risk: Typhoon & Flooding
Single / Sole Sourced Parts
CM concentration
Hong Kong
Risk: Typhoon & Flooding
Highest Revenue CM Site
CM site
© 2007 Cisco Systems, Inc. All rights reserved.
Cisco Confidential 6

7. Products Focus 50% Revenue Coverage 200 Product Families 8500 Products
Top Revenue Products
50% Revenue Coverage
Top Revenue Product Families
25 Product Families
4000 Products
80%
All
200 Product Families
8500 Products
100%

8. How We Deliver Resiliency: Sustaining Products
Mfg TTR
Alternate site readiness
Test TTR
Lead-time programs and/or inventory for test equipment
Component TTR
2nd source, alternate supplier site and/or inventory
TTR Goals T0
T75
Weeks
Time to Recover (TTR): number of weeks required to restore 100% operational output following a supply chain disruptions

9. How We Deliver Resiliency: New Products
Phase II – FY’09 
How We Deliver Resiliency: New Products
Product Design for Risk
Supply Chain Design for Risk
Comp TTR
Mfg TTR
Test TTR
TTR-based risk rating
BCP requiremnt
Risk Board
TTR-based SC design
Risk-based
bus. awards
Crisis management and BCP with suppliers started prior to 2005 but were revamped when a dedicated risk team was created in 2006
Just because items have a check mark does not mean we’re done with them. All of our programs will continue to evolve even as we add new ones to scope
Crisis management – defined team for managing supply chain disruptions with our suppliers and internally
BCP External – Supplier BCP program
BCP Internal – Business continuity mgmt program for Cisco processes & tools
Substitutes – Identifying viable product substitutes for use in a SC disruption and to prioritize component risk mitigation work
Component – Identifying high risk, high revenue impact parts and mitigating the risk
Manufacturing -- Identifying high risk, high revenue mfg sites and mitigating the risk
Test -- Identifying test equipment with long LTs and mitigating the risk
Design for Risk – influencing the product design process to minimize product risk from the beginning of the product lifecycle
Supply Chain for Design – incorporating risk in the SC design decision making process
First Customer Ship

10. How We Measure Supply Chain Resiliency
Very Resilient
Index Metrics
Goal 10 1 2 3 4 5 6 7 8 9
Manufacturing Recovery
X Weeks
Test Recovery
X Weeks
Component Recovery
X Weeks
Single / Sole Sourced
xx%
Likelihood of Disruption 4
Not Resilient

11. Resiliency by Business Unit
Not Resilient
Very Resilient 10 1 2 3 4 5 6 7 8 9
Not Resilient
Very Resilient 10 1 2 3 4 5 6 7 8 9
Not Resilient
Very Resilient 10 1 2 3 4 5 6 7 8 9
Not Resilient
Very Resilient 10 1 2 3 4 5 6 7 8 9
Not Resilient
Very Resilient 10 1 2 3 4 5 6 7 8 9
Relative Plot Points (see notes view)
This graph was used to plot the resiliency scores to determine the relative positions on the resiliency meters.

12. Key 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!
Crisis management and BCP with suppliers started prior to 2005 but were revamped when a dedicated risk team was created in 2006
Just because items have a check mark does not mean we’re done with them. All of our programs will continue to evolve even as we add new ones to scope
Crisis management – defined team for managing supply chain disruptions with our suppliers and internally
BCP External – Supplier BCP program
BCP Internal – Business continuity mgmt program for Cisco processes & tools
Substitutes – Identifying viable product substitutes for use in a SC disruption and to prioritize component risk mitigation work
Component – Identifying high risk, high revenue impact parts and mitigating the risk
Manufacturing -- Identifying high risk, high revenue mfg sites and mitigating the risk
Test -- Identifying test equipment with long LTs and mitigating the risk
Design for Risk – influencing the product design process to minimize product risk from the beginning of the product lifecycle
Supply Chain for Design – incorporating risk in the SC design decision making process