Nokia Case Study

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Nokia is one of the leading manufacturers of mobile phones. In 2007 AMR ranked Nokia as the number one world leader in Supply Chain Management (SCM). This was due Nokia’s strategic Supply Chain Management that kept them on top. The economic recession affected Nokia badly like any other company. As a result, 2009 Nokia lost its position in the market-place. This necessitated a cost-cutting measure by the company, part of their measures, was cutting down production in Salo’s plant in Finland, reducing their staff strength and stopped outsourcing production to Electronic Manufacturing Services (EMS). Nokia further laid off employee from their indirect sourcing function in order to decrease the operating budget of the indirect sourcing function from euros24million to euros19.5million. However Nokia has to regain and maintain their market position, proposals have been put forward. This paper seeks to critically examine Nokia’s SCM practices and to propose SCM practices Nokia can undertake in order to regain their market position in this current global recession.

The mobile infrastructure industry is characterized by frequent market changes, volatility and unique customer requirements. Therefore, operators in the industry are compelled to adapt their supply chain to constantly and rapidly respond to the unexpected changes in the market and technologies. This means supply chain that is fast and flexible while delivering customized product/services with high standard delivery accuracy (Collin and Lorenzin, 2006). This practice the authors describe as ‘Agility’ supply chain management.

Nokia made an aggressive SCM transformation when they expanded their mobile phone business, because their SCM could not accommodate the business increase. SCM is defined as the management of upstream and downstream relationship with suppliers and customers to deliver superior customer value at less cost to the entire chain (Christopher, 2005)....
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