Randy Pond, executive vice president of operations, processes, and systems at Cisco, apologized at its Partner Summit for the ongoing problems with its supply chain.

"We'd never seen demand go down so fast, and up so fast as we have in the last 18 months, and our process really didn't embrace that side of the organization," explained Pond. "We know this is difficult." In addition to the sheer scale of business drop-off in 2009, Pond pointed to difficulties in luring back its Chinese chipset manufacturing workforce, who were dismissed last year during the downturn, and who have now found work elsewhere, following China's economic stimulus.

"Tactically, we are making investments to entice employees back; we have re-hired thousands of employees over the last couple of months," said Pond, who added that the vendor was also "aggressively raising the inventory levels inside the business to give us more flexibility as demand continues to grow." In the long term, Pond said Cisco was re-engineering it operations to "yield more fidelity around our forecast accuracy."

Pond also says the company aims to use its biggest partners to get closer to end users to better anticipate demand, and any ups and downs in the market. "We're not happy where we are, but we think we're going to continue to see progress over the next couple of months," added Pond.

Read Full Article