Global Crisis and Opportunities of Supply Chain & Demand Chain Management Within the Mobile Telecommunications Industry

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GLOBAL CRISIS AND OPPORTUNITIES OF SUPPLY CHAIN & DEMAND CHAIN MANAGEMENT WITHIN THE MOBILE TELECOMMUNICATIONS INDUSTRY Marcus Stoerkel Szent Istvan University PhD Student 2100 Gödöllö, Pater Karoly u. 1. marcus.stoerkel@nokia.com -AbstractThe economic and financial crisis of 2008 changed almost every industry, companies had to face high demand volatility and fluctuation, and in most of the cases this went hand in hand with significant demand decrease which can be called demand volatility. In order to increase the efficiency of the supply chain operations in a particular supply chain in spite of the current difficulties, a good structured collaboration should be established between the parties. This will bring closer the participating companies to each other in the different levels of the supply chain, and foster a co-operation of an effective material and information flow between the parties. The paper is looking into theoretical and practical basics and definitions of logistics and supply chain management. Based on these the special needs within the telecommunications industry will be highlighted and strategic long term as well as tactical short term co-operations, which foster the openness and trust, will be worked out. Key words: Supply chain, demand chain, value chain, logistics, cooperation, strategy, telecommunications, economic crisis 1. INTRODUCTION, THEORETICAL EXPLANATIONS AND IDEA OF THE PAPER Demand volatility is a reality in many industries, from discrete manufacturing to process and telecommunications industries. Not only are retailers serving end consumers facing volatile demand, but this volatility is being passed on to manufacturers and distributors at different stages of the value chains. As the supply chain flexibility decreased in the recent years, the accurate and reliable forecasting methods will have a more crucial role in the upcoming time for the 1   

manufacturing companies, otherwise they will not be able to serve their customers in case of sudden demand changes. The transition to becoming pull-driven or demand-driven is slowly occurring in many industries. Under these unfavorable circumstances, companies were forced to reduce cost in every possible way, including the reduction of the inventory levels, labor force, production capacity, and the supplier base too, which steps resulted in decreased flexibility throughout the whole supply chain. In order to increase the efficiency of the supply chain operations in a particular supply chain in spite of the current difficulties, a well structured collaboration should be established between the parties. This will bring closer the participating companies to each other in the different levels of the supply chain, and foster a co-operation of an effective material and information flow between the parties. Planning and forecasting is an essential part of business throughout all industries. Especially within the telecommunications industry the demand creation is made by one partner only but it is a joint work between handset manufacturers, mobile operators and other market partners like content provider and application developers. Between manufacturers and mobile operators you need to have an intensive dialogue with open books and high degree of trust. The telecommunications industry was facing such issues already some while ago and is trying to develop processes to deal with it but just with the global crisis these issues got much more visible. In the year 1995 Nokia got into a situation which changed the entire company and its logistics processes: “Despite strong sales growth, Nokia Mobile Phones profitability was adversely affected by a number of factors during the year. The principal factor affecting profitability was the difficulty of meeting the challenges created by the business group's rapid growth. Profitability was also affected by interruptions in the supply of certain components, as well as logistical issues. (Nokia annual report, 1995) Nokia...
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