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Global Supply ChainManagement of NOKIA

J a y s h r e e V e r m a [ 2 9 ]

B a l j i t S i n g h [ ]

N i t i n C h i d d a r [ ]

3 / 2 4 / 2 0 1 2

Submitted asAssignment for Supply Chain Management [Module

3]

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Table of ContentsTable of Contents ....................................................................................................... 2

Introduction ................................................................................................................ 3

Nokia Supply Chain Management ............................................................................... 3

Nokia distribution structure GSM ............................................................................. 4

Distributor ............................................................................................................... 5

Retailers/ Dealers .................................................................................................... 5

Nokia distribution structure CDMA ........................................................................... 6

Sourcing Sustainability: .............................................................................................. 6

Supplier diversity ..................................................................................................... 7

Nokia Suppliers Requirements .................................................................................... 7

Suppliers Performance ................................................................................................ 7Training and Building Capability ................................................................................. 8

Internal training ....................................................................................................... 8

Supplier cooperation & development programs ...................................................... 9

A Supplier's view ..................................................................................................... 9

Sourcing materials ...................................................................................................... 9

EU REACH Regulation ............................................................................................ 10

How far does Nokias responsibility go down the supply chain? ............................ 10

Industry Collaboration .............................................................................................. 10

Shared Audits ........................................................................................................ 11

Learning & Capability Building .............................................................................. 11

Extractives ............................................................................................................. 11

RosettaNet ............................................................................................................ 12

Tie up with Sify Technology ...................................................................................... 12

Pricing Strategy for NOKIA ........................................................................................ 16

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IntroductionFinland-based Nokia Corporation (Nokia) is the world's leading manufacturer ofmobile devices. Analysts attributed Nokia's success to its supply chain managementpractices. The company had an integrated supply chain which inter-linked suppliers,manufacturing plants, contract manufacturers, sales, logistics service providers,and the consumers. It entered into a long-term relationship with its suppliers andalso supported them in improving their processes, which in turn helped thecompany. Nokia was able to keep its costs low because of its efficientmanufacturing systems and processes. The company adopted a hybrid

manufacturing system which was a combination of in-house manufacturing andoutsourcing. It also adopted the Smart manufacturing technique so as to enhancethe competitiveness of its manufacturing facilities. The company had a widedistribution network which helped it to effectively reach the end customers. Theproject highlights the unique supply chain management practices of Nokia. The caseexamines how the company is making its supply chain efficient to counter theimpact of reduced demand of mobile handsets. In May 2009, Finland-based NokiaCorporation (Nokia), the world's leading manufacturer of mobile devices, was placedsixth in the list of top 25 companies in global supply chain management, announcedby AMR Research. According to AMR Research, "Nokia continues to stay ahead ofthe curve on everything from regional sourcing and deep supplier collaboration toan organizational design based on true value chain principles." AMR Research

selected the manufacturing and retail companies from Fortune's Global 500 ranking.Founded in 1865 as a paper mill, Nokia started producing phones in 1982. Thecompany had interests in several businesses including telecommunications,consumer electronics, rubber, and cable. In 1992, Nokia took a strategic decision tofocus only on the telecommunications business and to close down its otherbusinesses. And this decision paid off. Its focus on the telecommunications businesshad turned Nokia into a global leader by the year 1998. According to industryexperts, Nokia's supply chain management was the key factor for the success of thecompany. The company maintained a long-term relationship with its suppliers andhelped them in improving their processes.

Nokia Supply Chain ManagementNokia manufactures its mobile in 15 manufacturing plants located across 9countries globally- Brazil, China, Finland, Great Britain, Hungary, India, Mexico,Romania and South Korea. Then it transfers to Nokias mother depot which islocated in Gurgaon. They also provide assistance in selection of channel partnerslike redistributors, Dealers, Franchisees, etc. Besides this they provide monetary

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assistance in Store development for Nokia Priority dealers, help in promotion ofproducts on mass scale as well as in store and training of the sales force of partnersat every level. With an extremely complex supply chain that handles 100 billioncomponents, 60 strategic suppliers, and 10 factories worldwide, Nokia had to beextremely focused in their transformation efforts. New product introductions andvariations are also intense 1 phone can represent 170 handset variations and 250sales package variants. To support this complexity, the operations philosophy hasbeen: think globally, act locally, and i.e. balancing localized decision-making withglobal planning. Nokia started their SCM transformation in 1995 with the strategy of

replacing inventory with information and creating a pull-driven supply chain withend-to end integration linking suppliers, factories, telecom operators, channelpartners, contract manufacturers, banks, sales, iHubs, and logistics service providertothe consumer. Their approach was to create the most efficient supplier network tooffer the best solutions to meet customer expectations. Fundamentals for successincluded creating a value-based partnership with suppliers, based upon factualinformation, leadership, flexibility and trust - Making the impossible possiblethrough collaboration. Based on this approach, the supplier network is nowconsidered the central point for reaching their corporate objectives: Great products,Operational excellence, and Customer satisfaction.

The results of their transformation have been impressive with increased sales and

reduced component inventories not only within Nokia, but also reduced inventoriesthroughout the pipeline, including supplier and customer inventories. Sourcingexcellence is a key ingredient for Nokias business model transformation. Benefitsinclude time-to-market, risk management, agility and financial model flexibility.Nokia believes two critical factors were instrumental to their transformationsuccess: leadership and the communication of the vision. The leadership philosophyrelies on four equally important elements: head, heart, hands, and guts. Theseleadership attributes are exemplified through energy and passion, trust as the basefor business, focus and drive, active communication and finally, flawless execution.

Nokia distribution structure GSMNokia rarely does divulge any kind of internal data in public domain. It makes ithard to get much detail about the exact details of the distribution structure of Nokiamobile phones. Nokia has been market leader in mobile phones market not just interms of sales by volume and value, but also in terms of setting best practices andexamples in supplier selection. Nokia manages one of the largest distributionnetworks among mobile companies globally. It ranges from small village on island ofsome remote south-east Asia like Tahiti to advanced market like US and westernEuropean countries. Its mobiles are available at stores measuring barely 15sq. ft. inremote villages to super-sized Nokia Concept stores on high streets.When it comes to distribution, Nokia's lead is clear. Today, India has some 110,000

outlets that sell mobile phones. Out of these, according to companies ownconservative estimates, 50,000 stores have only one brand available Nokia.In India, Nokia started distributing its phones through a partnership with HCLI(formerly Hindustan Computers Ltd.), which had already built an extensive networkfor its own products. Recently, Nokia has decided to supplement that with its owndistribution efforts. Nokia believed that there was a tremendous growth opportunityand it was best exploited when the resources utilization of both companies wasoptimized.

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In recent years, Nokia has started an initiative to allow customers to drop their usedold mobiles in Nokia drop boxes for safe disposal. This has necessitated a reverseflow of handsets also.

DistributorHCLI Info has been handling distribution of Nokia phones in India for 10 years. Nokiafollows similar pattern in different global markets of having tie-ups with companieswith established network for the distribution of their mobile phones. In Septemberthis year Brightstar Europe today announced a distribution agreement with Nokia.

The agreement will focus mainly on the IT reseller market, Value-Added Resellers(VARs) and the B2B sector in France. These distributors perform multiple roleswithin the supply chain. They act as resellers for the GSM phones.

Retailers/ DealersNokia Priority dealers, Multi brand and individual dealers in any specified region areall served by designated RDSS. Dealers are explained the features of every newlaunch mobiles, different schemes and offers by Nokias representatives. Re-

supplies are always just a phone call away and the delivery is made within a fewhours. Besides, Nokia assists most dealers in the region in the store set-up anddesign. The price points sometimes dictate the type of outlet. Stock norms definethat for how many days worth of stock does any level in the supply chain shouldhave. These norms are defined by Nokia only. Given below are the stock norms: Theexpected target to be fulfilled by the particular level is determined by the followingformula:

Expected target = (30 / No. of working days) * Stock Norm for that level

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Nokia distribution structure CDMAThe distribution system for CDMA phones of Nokia globally is little different fromthat for the GSM phones. In CDMA mobiles the mobile network operators need tohave the mobiles supplied to them before they are sent out in the market so thatthey can fuse the SIM cards inside the phones. The CDMA handsets aremanufactured and send to Nokias mother warehouse, same as in the case of GSMmobiles. From there they are directly delivered to the local mobile networkoperators in the region. The mobile network operators assemble their respectivemobiles with the networks SIM card. They then send it to its own associate outletsand large distributors. The large distributors further transfer the handsets to agents,chain of stores, etc. for retail selling. Nokia doesnt sell its cell phones directly toindividuals, they sell them through operators such (Bouygues, SFR, Maroc Telecom)and to distributors (Cora, Auchan, Carrefour) also to traders who are intermediatewho are responsible for the marketing of Nokia products with the small distributors.In India Nokia has a tie-up with TATA Indicom and Reliance network for its CDMAhandsets. Structure of Nokia CDMA mobile distribution is as following:

Sourcing Sustainability:Nokia sources components, materials and services from suppliers all over the world.Our sourcing activities can be divided into two categories:

Direct sourcing - taking care of the material supply for Nokia products, such as

components, parts, packaging, software development and research anddevelopment.

Indirect sourcing - covering equipment such as office furniture and computers.It also includes services like catering, IT consultancy, and marketing whichpurchase for our own use.

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As a global company Nokia has suppliers located all around the world. The maincountries and regions for our supplier locations are: Austria, Belgium, Brazil,Canada, China, Czech Republic, Denmark, Finland, France, Germany, Hungary,India, Ireland, Israel, Italy, Japan, Malaysia, Mexico, Morocco, Netherlands,Philippines, Poland, Portugal, Singapore, Slovakia, S Korea, Spain, Sweden,Switzerland, Taiwan, Thailand, Ukraine, UK, USA and Vietnam.

Supplier diversity

Supplier diversity is highest on the corporate responsibility agenda in the US. Nokia

recognize that their spending with suppliers there can have a significant impact oneconomic development. We have developed a comprehensive set of global NokiaSupplier Requirements (NSR), which include specified environmental and socialrequirements. These requirements are based on international standards ISO 14001,SA 8000, OHSAS18001, PCMM and ILO, and UN conventions.

Nokia Suppliers Requirements

Nokia has developed environmental requirements for the products, components andparts that it source. New suppliers (like our existing suppliers) must commit to

meeting their requirements (e.g. NSR and environmental product requirements) aspart of the contractual agreement.

Suppliers Performance

Supplier assessments are used to understand a suppliers performance level andcompliance to Nokias requirements. Trained Nokia assessors conduct the majority

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of its supplier assessments so that Nokia is involved first hand. Nokia believe it isimportant for Nokia assessors to see the factories for them, to understand theproblems and to work directly with suppliers to drive improvements. This hands-onapproach means that both Nokia and its suppliers take their performance veryseriously. Occasionally, Nokia work with third parties for specific expertise orinvestigations, or as part of joint industry assessments. Nokia do, however, invite itssuppliers to use NGOs or similar parties to assure the effectiveness of its own laborstandards and environmental practices. To drive sustainable change Nokia oftenneed to combine assessments with other tools and approaches including face-to-

face meetings, performance metrics and targets, development programs, trainingsand supplier-focused events.

Training and Building Capability

Nokia help suppliers improve their management of corporate responsibility (CR)issues by meeting with them and providing training, sharing examples of bestpractice from Nokias own operations or from other case studies. Nokia helpsuppliers develop their own internal CR organization and embed CR within theirbusiness starting with a commitment from the top. Nokia also work with Tier One

suppliers to help them manage their own supply chains. It is becoming increasinglyapparent that training and capacity building amongst companies in the supply chainare important for driving sustainable improvements to support monitoringprograms. Therefore, as part of the Global e-Sustainability Initiative (GeSI) SupplyChain Working Group (SCWG), Nokia actively participate in the Learning &Capability Building sub work group.

Internal training

Before Nokias suppliers can be expected to meet our requirements, it is firstimportant that own sourcing personnel are familiar with the requirements and

commitments so that they can support implementation and ensure consistentmessaging.Internal training is provided to new sourcing personnel and existing personnelreceive training and information sessions on new requirements. Supplier trainingSupplier training helps:

New suppliers to understand our expectations (e.g. NSR, EnvironmentalRequirements for Nokia products)

Existing suppliers to understand and implement new requirements (e.g. newmaterial restrictions, updates to NSR), and

Existing suppliers to build competences to meet existing requirements (e.g.address non-conformances from on-site assessments).

Nokias trainings focus on the Nokia Supplier Requirements, labor conditions, healthand safety in the work place, design for the environment, and substancemanagement.

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Supplier cooperation & development programs

In order for any company to systematically drive social and environmentalimprovements, it is necessary to have both management support and an effectivemanagement system in place. One of the ways in which Nokia help to buildsuppliers Social and Environmental Responsibility (SER) capabilities is to work with them to develop their own internal Corporate Responsibility (CR) organization andembed CR within their business starting with a commitment from the top. Nokia dothis by meeting on a regular basis, helping to get management support and sharing

examples of best practice from Nokias own operations or from other case studies.In 2007 Nokia initiated a cross-commodity development program with Foxconn, aglobal contract manufacturer and component supplier based in Taiwan. They helpedthe company set up a corporate CR structure connected to business units, and todefine a corporate CR commitment. Nokia has been working with Foxconn for anumber of years, meeting regularly to share best practice. Since 2007 Nokia haveexpanded this work and for the latest information please refer to Progress andtargets. Although the suppliers are at different levels in their CR journey andorganized in different ways, the objectives have been similar; to ensure theycommit to and implement effective CR programs, targets, monitoring practices andreporting.

A Supplier's view

"In 2007, Foxconn was advised by Nokias customer to adopt industry best practiceand set up an internal Global Social and Environmental Committee. That advice hashelped them plan and manage social and environmental issues in a systematic,responsive and effective manner similar to the business value propositions it deliverto customers with our products and services. The Committee holds regularmeetings to bring in new improvement agendas. For example, new initiatives in2007 included energy efficiency, air quality control and power saving. Through theguidance of our customer and Nokias internal organizational change, Foxconn hasmade progress in social and environmental responsibility, developing a Code of

Conduct in 2007, improving employee benefits, and ensuring cleaner, safer andmore enjoyable working conditions.Foxconn embarked on its journey of corporate social and environmentalresponsibility (SER) in 2004, but without Nokias help this quantum leap and significant progress wouldnt have been possible. This is genuinely a realization ofsupply chain collaboration and partnered actions."

Sourcing materials

Nokia is an industry leader in substance management. Their main objective is thatthey know all the materials in our products, not just those that raise concerns, andthat they are safe for people and the environment when used in the proper way.

Their sourcing organization and suppliers play a key role in ensuring ourcomponents and parts are safe and compliant with the Nokia Substance List (NSL).

The NSL identifies substances that Nokia has banned, restricted, or targeted forreduction with the aim of phasing out their use in Nokia products. Nokia also requiresuppliers to have a record of the raw material content of products supplied to themand, if needed, to provide end-of-life treatment recommendations.

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EU REACH RegulationIn June 2007, the EU regulations on the Registration, Evaluation, Authorization and

Restriction of Chemicals (REACH) came into force. According to this regulation,

companies have obligations to ensure that the chemical substances they manufacture,

import or found in articles considered as substances of very high concern, are

registered, authorized or notified according to legal requirements. To support Nokias

suppliers they provided information to them and have ongoing discussions to ensure

they are aware of the REACH regulations, understand the requirements and are taking

responsibility for compliance to ensure uninterrupted supply.

How far does Nokias responsibility go down the supplychain?

Nokias primary focus is on those suppliers with who company contract and work with

directly. Their suppliers are required to meet Nokia Supplier Requirements and product

environmental requirements that define expectations for their suppliers, the

components, parts and services they supply. Nokia Supplier Requirements request that

their suppliers in turn set environmental, labor and health & safety requirements, and

monitor the performance of their suppliers. Nokia believe each tier of the supply chain

must take responsibility for managing its own suppliers to achieve positive, sustainable

improvements throughout the entire supply chain. If concerns arise regarding the

performance of 2nd/3rd tier suppliers, Nokia works deeper down the supply chain to

investigate and address any concerns. For certain materials of concern or alternative

new materials, Nokia works with suppliers to evaluate and promote environmental and

social improvements further down the supply chain. This work involves increasing the

transparency of the supply chains of these materials, understanding the commitments

of each tier, working at an industry level and with stakeholders. Nokia efforts with

Tantalum are one example of work to tackle materials of concern, and biomaterials are

an example of alternative new material.

Industry Collaboration

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Global e-Sustainability Initiative (GeSI) Nokia became a full member of the Global e-Sustainability Initiative (GeSI ) in 2007. They have been a member of the GeSISupply Chain Working Group (SCWG) since 2004. This Group works closely with theElectronics Industry Citizenship Coalition (EICC). The main aims of this collaborativeeffort are to promote good conduct and to develop and deploy a consistent set oftools and processes to measure, monitor and improve CR performance across theICT sector supply chain. As part of their membership of the GeSI SCWG, theyactively participate in the Learning and Capability Building, Shared Auditing andExtractives sub-groups working together with EICC.

Shared Audits

Industry shares many of the same suppliers and Nokias networked supply chainmeans that many of them are customers and suppliers of each other. As a result,one focus of the GeSI SCWG has been to develop a shared auditing processtogether with the EICC, which means a single audit of a supplier facility can beshared across customers. In doing so, the work group aims to reduce the burden ofduplicate audits on suppliers and allow them to focus resources on addressingissues and improving conditions During 2008 Nokia participated within the sharedaudit work group, helping to develop the shared auditing process and in the actual

audit pilots.

Learning & Capability Building

Recognizing that simply assessing suppliers for compliance does not createsustainable change, GeSI SCWG and EICC formed the Learning & Capability buildingwork group, to which Nokia is an active member. During 2008, this work grouphosted a supplier forum in China, concluded the pilot studies that emerged from themulti-stakeholder capability-building project for the ICT sector in China (incollaboration with BSR and the Foreign Investment Advisory Service (FIAS)) and,began developing a series of web-based e-learning modules.

ExtractivesGeSI and EICC formed the Extractives Workgroup to enhance membersunderstanding of social and environmental conditions at the mine level and todetermine if and how Nokia could act collectively or individually to improve theseconditions. With this aim, the Workgroup commissioned an industry research projectto understand:

How six key metals (aluminum, cobalt, copper, gold, palladium, and tin) aremined, recycled, purchased and used within the electronics industry,

How members of the GeSI and EICC can effectively influence social andenvironmental issues associated with the mining of metals used in electronicsproducts. The research, published in June 2008, helped raise awareness ofthe key facts and challenges surrounding the supply of metals, the ability totrace the sources of metal used in electronic products and the industrysability to include conditions. After this research the work group coordinatedstakeholder forums to gather feedback and define the groups prioritiesmoving forward.

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RosettaNetRosettaNet is a voluntary initiative of over 500 major information technology and

electronics manufacturers that is committed to developing solutions for the

standardized exchange of information. As part of its supplier cooperation development,

Nokia is using the web-based RosettaNet information exchange solution in its product

information exchange with suppliers, including information on material content.

Tie up with Sify TechnologyNokia India on Monday announced its tie up with Sify Technologies to deploy Nokia

Tej, the firms supply chain management solution on mobile. Sify will integrate theproduct with its existing suite of solutions such as Forum and will customize it forindividual customers. Nokia Tej launched in April is a pay-per-use service availableon Nokia handsets targeted at enterprises and small and medium customers. Ittakes care of order, distribution and sales management processes. The servicecomes at Rs 1,250 and an additional Rs 550 per user per month. Sify will charge aprofessional fee for customization. The service can be integrated to any existing ITapplications used at the customer end.

Since its commercial launch, over 50 customers across verticals including consumerdurables, FMCG and pharma have signed up for the service to e-enable their salesforce and distribution channels. Given the cutthroat competition in the telecomsegment, service providers are focusing on services such as business applicationsbeyond voice offerings. Our association with Sify will help us leverage theirwidespread distribution network. Sify also has a strong presence in the verticalsrelevant to us, said Chand Malu, business head of Nokia Tej.

The mobile phone supply chain is complex with perishable and substitutableproducts.

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Accurate demand forecasting is key to minimizing channel inventoryand lost sales.

There are two types of product forecasts; each driving differentdecisions

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Short term forecast is driven by a robust Sales & Operations Planningprocess.

Quantitative analysis is used to improve the quality of the S&OPprocess.

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Pricing Strategy for NOKIA

Skimming Pricing

Price skimming is a pricing strategy in which a marketer sets a relatively high price for

a product or service at first, then lowers the price over time. It is a temporal version of

price discrimination/yield management. It allows the firm to recover its sunk costs

quickly before competition steps in and lowers the market price.

Price skimming is sometimes referred to as riding down the

demand curve. The objective of a price skimming strategy is to capture the consumer

surplus. If this is done successfully, then theoretically no customer will pay less for the

product than the maximum they are willing to pay. In practice it is impossible for a firm

to capture all of this surplus.

Demand Curve

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Price elasticity of demand

1. Inelastic Demand

2. Elastic Demand

Nokias Skimming pricestrategy

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Penetration Pricing

Penetration pricing is the pricing technique of setting a relatively low initial entry

price, often lower than the eventual market price, to attract new customers. The

strategy works on the expectation that customers will switch to the new brand because

of the lower price. Penetration pricing is most commonly associated with a marketing

objective of increasing market share or sales volume, rather than to make profit in the

short term.

Now if Nokia would have adopted this policy then

the prices of the new high technology and high quality

sets would have been low in the starting which would

have led long term profit

Plan for supply chain agility at

Nokia

The building of cellular networks (e.g. GSM/EDGE or WCDMA networks) is a quiteoriginal business. By its nature it is typically a project business, which requires a very

structured approach for planning and control, standard procedures and good day-to-day

management skills to run the project implementation. Thus, it clearly has many

similarities with the traditional construction industry. However, there are some

fundamental differences that make the environment much more complex. First, the

products are all hi-tech equipment, which are characterized by high product value,

extremely short lifecycles and a large amount of embedded software. Furthermore,

individual products need to be integrated seamlessly together into a complex system

that has to work reliably and securely in all kinds of circumstances. Second, a cellular

network forms a multi-site delivery environment, as network elements are located

around the country. An average-sized GSM network includes several thousands basestation sites, each of which has its specific location, design and function in the network.

Our experiences show that the site implementation process of individual network

elements encompasses the customers demand formation process. For instance, for

base stations, the process begins with planning the cellular network and sites of base

stations. The next phase is site acquisition, which is to get site permissions for base

stations from authorities and make lease agreements with landlords. The process

continues with construction works when a particular site is physically built and technical

specifications for equipment frozen. After this point, the base station can be delivered to

the site. Next, the base station is installed and final commissioning is done at the site.

The site implementation process ends when the base station is integrated to the

network. Only at this point the investment eventually starts making money for theoperator. Therefore, projects aim primarily is to provide customers fastest time to profit

with the investment. This implies that the supply chain should be very agile and

equipment deliveries fast and reliable.

By nature, the behavior of market demand is cyclic with some elements of seasonal

peaks, typically at year-ends. Although the mobile networks are normally built and

expanded as well-planned implementation projects, the accuracy of demand planning

can be very lousy. In addition to project internal turbulences due to complexity in

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business environment, there are also many external (e.g. technical, geographical or

political) factors that may radically influence on the demand. The level of aggregation

and planning time horizon depends very much on products, i.e. the network elements.

For instance, for base stations a planning item typically equals to a delivery item and

main focus is on a short-term time horizon. Whereas, for mobile switches planning can

be done on system capacity level (e.g. number of air channels) and time horizon is

typically more long-term. Demand planning is primarily based on the judgment method

in separate customer account teams, as sales-forces give best estimates based on

information from their own customers. After the demand is consolidated to a globallevel, some demand adjustments can be made based on executive opinions. Also some

quantitative forecasting techniques, like exponential smoothing, are complementarily

used for certain products.

Nokias integrated project management

Successful network deployment and expansion is about continuously understanding

customer milestones. It typically requires fast mobilization of a network of people and

companies to perform all the activities, deploying a fast and flexible delivery chain,

managing an increasingly complex network of suppliers, monitoring effectively and

sharing transparently the status of the operations. Integrating all these in a cost-

effective and efficient system of activities, processes and tools is the way to meet thosemilestones. Nokias IPM is all about this. IPM is a strategic execution program to

implement a truly customer-focused delivery process in Nokia Networks. Target is to

provide customers with more speed, efficient and cost effective deliveries by better

orchestrating the end-to-end supply chain. Idea is to seat the customer itself onto the

driving seat of the whole delivery machine. Customers network rollout needs are

cooperatively collected as a part of continuous planning process and supply capacity is

reserved accordingly to meet project targets. Market responsive supply chain with

regional delivery hubs is designed to tackle project uncertainties and to provide high-

standard service levels to project implementation teams in all circumstances. Site-

based ordering model enables short lead times and allows win-win asset management

in the supply chain, asequipment deliveries are triggered based on mutually agreed milestones in the site

process. Figure 1 shows the model how this IPM allows fast, flexible and efficient supply

chain all the way to final implementation sites.

The program started with creating of key business capabilities through a selected

customer pilots. Based on the first pilots following four items were formed and agreed

as the IPM capabilities to be deployed for selected customers:

(1) collaborative demand planning with a customer;

(2) site-based ordering by project progress;

(3) professional cost management; and

(4) performance metrics with integrated platform.

IPM implementation consists of deploying or fine-tuning the key business capabilities forIPM in selected customer account teams. Typical implementation per customer

takes around half a year during which standard processes and tools with appropriate

performance metrics are put in place. Quality in all we do is a common ground for all

the initiatives taken under Nokia IPM umbrella. IPM business capability that we merely

focus now is the collaborative demand planning with a customer. Here, the core idea

is to build an agile and responsive supply chain that is fully driven from the customer

project front line. During the network implementation project there is one clear

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interface towards the customer for all operational issues with easier communication and

faster reaction. The customers project rollout plan is primarily used a basis for Nokia

internal demand plans. Correspondingly, Nokia ensures high product availability, short

lead times and reliable deliveries directly to installation sites. Monetary savings to the

whole customers project are mainly expected to materialize through improved asset

efficiency and reduced non-quality costs when building the mobile network.

Integrated IT tools enabling transparency

Integrated IT platform, Nokia IPM Suite, provides a common control room for allstakeholders in customer projects. It is a fully integrated platform to manage the

progress of site implementations and support full cooperation among stakeholders. The

IPM Suite allows customers to plug and play operations in projects start-up conditions

and new project phases, enables integrated management of all the different project

activities, provides a common tool for tracking the activities of different stakeholders,

helps project progress monitoring by providing a joint virtual control room for all

performing organization. The integrated IT tools include different modules like rollout

planning, rollout tracking, quality tracking, site database and documentations

management.

The suite is also linked to the backbone logistics systems providing necessary basis for

supply chain agility. Transparency to the information for all relevant projectstakeholders (e.g. customer, subcontractors, and partners) is guaranteed through e-

project management portal. Full details on each site activity and real time update of the

project status are visible online. Also project progress, site quality, and activity tracking

are all available online. Documentation exchange and proper management of thousands

of site folders is likewise possible in the system.

The tools provide needed transparency to the information for all parties. It is especially

important upstream for planning purposes when creating agility into operations.

However, it is still good to remind that the tools do not improve the quality of demand

information but only can automate data handling and sharing.

Nokia Incorporating E-learning for Business

Increased product complexity requires different educational model

E-learning integral part of B2B model and process

Examples of B2B e-learning in Nokia:

Phone distributors/dealers: elearning content for every new Nokia phone (multiple

languages globally)

Telcos: Self-study packages with access to Nokia experts and virtual classroom

Phone repair centers: Streaming video packages for repair center

Everyone who purchases a device wants to learn how to use it but customersalso have learning needs at each stage of the customer promise

E-learning for Nokia employees

Comprehensive e-learning portfolio available through Learning Market Place

Multiple delivery methods, self study, virtual classroom, blended solutions

Multiple content creation tools

Some courses are free and others are charged to learners department

Learners get a personal learning history

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E-learning creation process

Product / service content focus

Business unit driven

Target group (B2E, B2B, B2C)

Multiple packaging technologies

Centrally driven pedagogical & technical standards, processes, guidelines and

vendors

Room for innovation

E-learning historyPhase I : E-books

Phase II : Basic interaction

Phase III : Diversified interactivity

Phase IV : Mobility & gaming

Learning points:

Technical issues should not be restrictive

Need for flexibility

Importance of scalability