New Product Development Makeup Assignment Abhradita Sen (2016191)

Cisco Systems, Inc.: Collaborating on New Product Introduction

1. What are the challenges and risks faced by technology companies in new product
introduction?

• Keeping up with announced date of release in spite of realising the necessary

modifications during the tenure of development of the product. Cisco had to redesign
Viking and yet keep up with the scheduled launch date
• Competitive pricing to keep competitors at bay. Deviated from usual practice of
outsourcing a new complex product in USA first and sending it to China only after the
process has matured. Viking was supposed to be made in China since its inception
• Credibility of supplier. Its main supplier Foxconn had never made such a complex product
before. There were doubts on its ability and close engagement was the need of the hour
• A new complex project for a MNC demands phenomenal coordination and collaboration
from all of its global teams. Viking tested Cisco’s NPI expertise

2. What were the risks and benefits of using Chinese contract manufacturing from the start?

Risks
• Doubts prevailed over Chinese contract manufacturer’s ability to handle the
complexity of the product as Cisco couldn’t effort any error
• Product quality
• Reliability of its services
• Timely delivery

Benefits
• Low-cost of production since the beginning by manufacturing in China
• Saving the switching costs (money, time and effort included) on supplier change in
later stage of product as in earlier products
• China might emerge as the manufacturing destination for other complex products
• Developing a low-cost efficient supplier in Foxconn, thus adding to Cisco’s options
of efficient suppliers

3. In selecting Foxconn and expanding its role in the supply chain, what were the potential
risks and values to Cisco?

Risks
• Foxconn’s ability to handle such a complex product was a big risk as they have
never dealt with such complex technological products in the pasts
• Deterioration of relation with Cisco’s other suppliers (Flextronics, Jabil, Celestica)
who have till now handled complex products for Cisco after qualifying Level 3
qualification from Cisco

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New Product Development Makeup Assignment Abhradita Sen (2016191)

Values
• Low-cost manufacturing demanded fundamental discipline and mindset of lean and
push manufacturing that were hard to hard to inculcate in suppliers otherwise
• The Viking project was awarded to Foxconn after much assessment of the latter’s
ability to handle such complexity. Foxconn, usually a Level 2 qualifier, qualified as
a Level 3 supplier this time. Therefore, Cisco lived up to its core values by such an
assessment

4. What should Cisco do to mitigate these risks and ensure successful development and launch
of the Viking router?

• Employ the concept of “design for manufacturability” early in its supply chain. It
meant that Cisco should engage with its suppliers from the start to consider their
feedback while creating the prototypes
• Close association and collaboration of scientists, engineers (software and hardware)
and workers
• Strict adherence to timelines at all levels
• Overcoming the challenges of geographies, time-zones and culture by leveraging
its web-based tool - NPI Metrics. It should help everyone by giving a single view
of timelines, deliverables and tasks across the global teams