Bricks Matter: The Role of Supply Chains in Building Market-Driven Differentiation

CHAPTER 5

Building Horizontal Connectors

Companies need to have strong operations in vertical processes before they can move horizontally to build processes to sense and respond.

—Lora Cecere

Failure gave birth to supply chain horizontal processes. Today's leaders in horizontal process evolution—Cisco Systems, Coca-Cola, IBM, Intel, Hewlett-Packard, Samsung, and Walmart—all learned the need for horizontal processes the hard way. Each stubbed its big toe and stumbled before learning that bricks matter.

Each supply chain leader learned that strong horizontal supply chain processes are a prerequisite to drive success in building market-driven value networks. They need to be built brick by brick. This chapter is about their journey. Let's start with the most pivotal case studies:

• Cisco stumbles and then builds strong supply chain processes. The dotcom era was a speculative market bubble from 1995 to 2000 (with a height on March 10, 2000). During the mid- to late 1990s, due to their market capitalizations, Cisco Systems, Dell, Intel, and Microsoft were known as “the Four Horsemen of the NASDAQ.” In this period, a combination of rapidly increasing stock prices, market confidence on future profits, and speculation in individual stocks along with widely available capital created a “Wild, Wild West” environment where many investors were willing to overlook traditional metrics in favor of confidence in future technological advancements. Caught in this e-commerce hype, Cisco Systems did ...