How TTR drives SCRM
Bindiya Vakil, Lance Solomon & Jane Khoury, Supply Chain Risk Management, Cisco Systems, Inc.

 

What is TTR

TTR is the time (in weeks) needed to restore 100% of operational output following a supply chain disruption.

How we calculate it

Assuming the facility is rendered unusable, the options would be to either rebuilt or transfer operations to an alternate site.  We assume that workforce is available.  TTR includes the following:

• Include longest lead-time and setup time of any specialized equipment/material
• Include time to secure special permits to operate (if applicable)
• Include time to ramp up to 100% capacity
• Include lead time time to receive raw materials/components
• Include time to qualify facility/equipment/process/product on supplier's end

TTR does not include the following: 

• Do not include Cisco qual time
• Do not include time to purchase Cisco-owned equipment
• Do not include time to set up a leased line

TTR calculated above can be reduced by the standard inventory buffer as long as buffer is located at another site at least 50 miles away from the primary location.

How it drives our programs

Manufacturing and Test Mitigation 

Measuring TTR and establishing goals allows us to focus on the key drivers of recovery time within our manufacturing and test environments.  We use it to engage with our partners and operations teams to understand which sites, processes and/or equipment have recovery times greater than our objective and then we work to develop action plans to get those recovery times below our goal.

 

Component Risk Mitigation

Cisco has over 20,000 single sourced parts out of over 55,000 active parts in the portfolio.  At Cisco, we assess TTRs for our manufacturing partners, logistics centers, transportation providers, component suppliers, and test equipment providers to identify the highest risk.  We then set TTR goals, by node-type, in order to focus and prioritize our resiliency programs. We use  the TTR metric to engage with our partners and operations teams  with a relative understanding of resiliency. We work to develop action plans with our partners to ensure their  recovery times  meet  our goals. For some parts, we need to invest in risk mitigation - here, we use TTR to calculate the optimum risk mitigation strategy based on a cost and impact (measured as TTR reduction) assessment.

 

Crisis Management

In a crisis, Cisco quickly needs to know worst case impact so it can begin to proactively mount a response.  Once a disaster happens, Cisco immediately pulls up the BCP data, identifies the suppliers affected and the information about the TTR provided.  Knowing the TTR for the affected site helps us to immediately get a worst case assessment of the situation and therefore begin to initiate appropriate recovery actions immediately. 

 

Why this metric is needed

In a supply chain as complex as Cisco's with over 200 families of products and thousands of SKUs, prioritizing risk mitigation efforts assumes primary importance.  Knowledge of TTR helps us to identify those parts or nodes in the supply chain that pose the highest risk.  We compute the revenue per week that is enabled by a component or a node and multiply that by the TTR to identify critical vulnerabilities.  Using this information, we proactively target all risk mitigation strategies to get those sites well positioned for responding to a disruption. Quick recovery time keeps Cisco business running, keeps our customers' business rolling and helps position Cisco as a resilient company able to withstand supply chain disruptions.

Why TTR is good for the SCRM community

Developing a standard metric such as TTR with a definition that is adopted by our industry is  needed to align supply chain risk management programs and activities. If standardized, partners only need to be trained once and then their TTRs can simply be customized to different customers' products.  It reduces non value added work and support staff to respond differently to many different customers, which, eventually trickles down into cost savings for the supply chain.