Nokia’s Supply Chain Management Harvard Case Solution & Analysis

Nokia's Supply Chain Management



The case study is about the supply chain management and the risks faced by the management of the Nokia Company. The company is roughly a decade old and the growth that it has witnessed over the time is phenomenal. However, the market share of the company has squeezed in the recent period as it has lost its market share and customer base to Samsung.

It is still one of the most dominant mobile phones manufacturers in the industry. The company was the leading organization in the cell phone manufacturing industry and the most dominant organization by market capitalization in the late 1990’s. This profitability and the dominance of the company in the telecommunications industry were solely due to the strategic and timely decisions of the management and the board of the organization to invest in the new technologies and innovations that were emerging throughout the world.

This policy of the management of the company transformed the organization as it started to set its foot in the electronics and communication industry. The product base of the company was also enhanced due to this decision of the board, the shareholders and the management that was in charge for running the operations of the organizations affairs.

The company introduced its first ever cell phone in the markets in early 1980’s after acquiring the skills and expertise of this latest innovation and technology however, in the last decade of the 20th century the business operations of the company did take a hit as the trading routes of the company became a conflict zone and resulted in the fall of the Soviet Union.

The company rebuilt its trade inn routes and introduced procedures and strategies to further avoid incidents and halts like this and by the end of the century, it had already established its global dominance in the markets all over the world. The revenues generated by the company were roughly $20 billion dollars and almost 75% of that came from the direct sales of the cell phone of the company and the rest were gained through the network services that the company provided.
The case study is about an incident that transpired at the royal Philips Electronics Plant also known as Philips, which is situated in New Mexico City. The company is the key supplier of parts like chips for Nokia and Ericsson that are used in the production of handsets of the company and the issue involves a fire incident that transpired at the factory premises. The fire was put out by the factory workers and the employees however; the damage had already been done.

The incident was reported very swiftly to the management of the organizations.The organizational structure of Nokia is very impressive and the chain of command is very effective. The company had already gone through such a phase in the past therefore, the management of the organization had subsequent strategies that they could deploy to oversee and face the crisis as they were likely to suffer with idle time issues otherwise due to lack of inventory of chips, which are necessary for the production of the cell phones.

It was because of this reason that the operations and the revenues of the company were not affected due to the fire incident and the company was able to hold its supply line during the crises because its supply chain was not centralized. The management of the company had also developed the risk management strategies that assisted it during the crises.Supply Chain Management Case Solution

On the other hand, Ericsson had a centralized supply chain structure and the chain of command of the company was not at all effective. Although the supplier called and informed a technician of the company, however the upper brass of the management of the company was unaware of the fire issue at the factory. The initial expectations of Philips were that the plant will be in a working condition in a few days and the management of the Ericsson Company was relying on it as their supply chain was centralized and they did not had any other alternative.

It later turned out that the clean rooms of the plant were severely damaged and a considerable damage to the inventories had also been done to the inventories kept there. The plant was shut for several weeks and the launching of the new cell phone had to be delayed by the company and this led to huge losses for the Ericsson as they lost a considerable market share to their competitor, Nokia...........................

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