Cisco's $2 Billion Mistake

from the could-have-been-easily-solved... dept

Amazing. For years we heard about Cisco's amazing inventory tracking system that put it so far ahead of its competitors. That all fell apart last year when Cisco had to writedown $2.1 billion in inventory. So where did they screw up? It seems that wonderful inventory system fell victim to one of the most basic operations problems around: it dealt with multiple suppliers, who magnified demand at each stage of the process. Perhaps if the folks who designed the system had gone to business school and played the ever popular "beer game" that is played in most introductory Operations classes, this could have been avoided.