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Cisco cleaning up its supply glut

Cisco Systems plans to end relationships with 300 more equipment suppliers to further battle its excessive inventory problem, company executives say.

SAN JOSE, Calif.--Cisco Systems plans to end relationships with 300 more equipment suppliers to further battle the company's excessive inventory problem, executives said.

Randy Pond, Cisco's senior vice president of worldwide manufacturing, said the changes will take place "soon," leaving the world's leading router maker with 350 raw materials suppliers.

Of those 350, some "50 to 70 will represent the majority of our" suppliers, Pond told analysts attending two days of the company's financial presentations here.

Cisco has also been paring down the number of companies that sell its equipment, part of an overall move to battle an "oversupply and over-distribution" problem, said Paul Mountford, Cisco's vice president of worldwide channels.

Mountford said the company so far this year has eliminated 1,100 U.S. Cisco resellers. That leaves Cisco with about 1,100 resellers in the Americas, he said.

Pond claims cleaning up the bloat will cut costs. He added that dealing with fewer suppliers and manufacturers means that Cisco can "really introduce partners to our business."

Pond and Mountford did not provide additional details about what companies had been cut from Cisco's line of product distribution partners.