Supply Chain And Logistics

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Supply Chain and Logistics

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SUPPLY CHAIN AND LOGISTICS

Supply Chain and Logistics

Introduction

In a modern world under competitive business situations, supply chain (SC) management

takes the key importance and thus demands extensive research. This is due to firms constantly

facing challenges on the ever-increasing expectations of the customers on their need for the

manageable cost of the products delivered to them. Therefore, in order to meet such

expectations, organizations are always in constant search out for the aspects of supply chain and

logistics practices which best suits them in a competitive market share (Tan, 2001). Tan (2001)

further adds that firms seek to understand the needs of the customers which are possible to be

met, through developing improvement goals.

Evidently, in the current technological era, the mobile phone is a global demand product,

whose demand keeps escalating both locally as well as in global markets. Therefore, this product

has opened a new world of opportunities for the mobile devices and related products for

manufacturing companies. Besides, globalization has increased competition and thus making it

inevitable for many companies such as Nokia Corporat1ion to provide effective quality of the

output with stringed schedule deliveries to the customers. Issues and challenges in delayed and

supply of inferior products, unwarranted cost escalations negatively impacts the credibility as

well as the potential for success of a company in new markets (Collin & Lorenzin 2016). This

research paper will review relevant issues that will focus on identifying the key drivers and

trends that are increasing the globalization of SC management of Nokia Corporation as the focus

case study company. Furthermore, this study explores the structure and management of the

global and international logistics as well as the supply networks.

SUPPLY CHAIN AND LOGISTICS

Executive summary of Supply Chain and Logistics operations of Nokia Corporation

Nokia Corporation is a Finland based company and one of the world’s leading mobile

phone manufacturer. Researchers have attributed the company’s success in establishing a large

global market share to its efficient supply chain management practices. The firm has established

a globally integrated supply chain with manufacturing plants, the supplies, sales and logistics

service providers, contract manufacturers and the consumers (Srivastava 2007). The success of

supply chain operations in Nokia Company can also be attributed to its long-term relationship

which the company entered with its suppliers. Due to the efficient manufacturing processes and

systems, Nokia has been able to maintain its costs to a minimum in comparison with its

competitors. Besides, the company has also established a hybrid manufacturing system which is

a combination of both the outsourcing and in-house manufacturing. Moreover, Nokia Company

has adopted smart manufacturing procedures to improve its competitive manufacturing facilities.

However, despite this esteemed success, there are a lot of challenges that the company

faces in optimizing these operations in external markets such as other countries. However, the

company is in the forefront of establishing a wide distribution network which will enhance its

effective outreach to its customers globally despite several challenges that its operations manager

faces in supply chain and logistics practices in the global scale. The case review below,

therefore, highlights the unique supply chain management practices carried out by Nokia

Corporations as well as the challenges it faces based on the concepts of globalization, supply

chain, and logistics.

SUPPLY CHAIN AND LOGISTICS

Issues and Challenges facing Nokia Company management in establishing operations in

different countries

a. Challenges based on the concept of globalization

The growth in the consumer numbers in the markets which have been emerging for the

last few decades can also be linked to global development for a business. Christopher (2013)

attributes these situations to the organizations that are experiencing the change due to the

globalization. Arguably, globalization is significant to the growth and the revenue returns in the

organizations. Professionals in globalization sector have realized that there are two aspects of

globalization and these are; technologies; which allow the much needed free flow of business

information and data on a global scale. Another aspect is the ever-rising global labor markets.

These two concepts of globalization are most addressed by most companies. It is also notably

clear that the economic downturn and the financial crisis that are continually being experienced

have not affected these trends of globalization (Thomas & Griffin 1996).

Despite the potential growth of Nokia Company in the global market, the Finland based

firm players have been faced by challenges and issues due to the fragmented enhancement of

supply chain and logistics practices alongside the uncoordinated enactment of its regulations.

Until such issues are resolved, the expansion of the company in the global market through its

product logistics amidst its competitors will remain a dream. Some of these challenges

experienced by Nokia firm management on establishing its operations on the international

market based on this concept of globalization includes;

SUPPLY CHAIN AND LOGISTICS

1. Lack of coordination and follow up actions negatively impact the SC and

logistics practices of the firm

Although there has been several meetings and measures on improving the SC and logistic

operations in varied countries by the Nokia firm, monitoring and following up such actions has

been an issue in rectifying the situations. For instance, issues which involve one sector have

been generalized to affect other sectors and thus global SC and logistic practices are not given

much attention. Therefore, the obtained information ought to be shared by other parties in the

firm. As there is the existence of the global branches at the significant corridors across countries,

it is therefore important for the newly setup market to allow coordination action to be carried out

(Lambert et al., .2016)

2. Business management in Nokia firm lacks sophisticated management techniques

required in international market standards

According to Auramo et al., (2015), the rapid development of any firm and lack of

emphasis on the excellence of the service have resulted in a rise in the need for a more

sophisticated supply chain management techniques. Just as any other sales firm, Nokia has been

battling with the same issue in establishing its SC and Logistic operations in the global market.

Arguably, acquiring the sophisticated knowledge in the management of SC and logistic

operation and implementing them in order to bring Nokia Company an upfront across the

countries has been a major challenge.

3. Limited research and development (R&D) of the industry

Even though researchers and practitioners are increasingly being aware of the

significance of the SC and logistics of a company across different countries, further research on

SUPPLY CHAIN AND LOGISTICS

the same field is underway. Therefore identifying and improving on various weaknesses in the

firm with regards to the external or global market and SC operations has been a challenge

b. Challenge faced by business managers on establishing international operation based

on Supply Chain

According to Cooper et al.,(2017), the supply chain can be referred to as an organized system of

activities, information, resources, and people whereby all these are involved in the movement of

goods or services from the producer or the manufacturer to the customer or client. The

transformation of raw material used in manufacturing mobile phone devices as well as related

components in the process of production and finally a finished product that is in return delivered

to a consumer are all aspects of activities in a supply chain operation in Nokia Corporation. The

company SC operations managers have also established sophisticated systems through which a

product that has already left the production line may re-enter the supply chain at some point

where the salvage value can be recycled (Chopra & Sodhi 2014). Additionally, Srivastava (2007)

claims that supply chain management of the firm basically covers several activities that include

all aspects of management and planning such as procurement, sourcing, manufacturing,

conversion and all activities that involve logistics management. Generally, SC operations among

business managers in Nokia Company involve all activities that include the liaison, collaboration

and also coordination with the rich channel members in order to ensure a smooth operation in an

organization. These channel members may be intermediaries, suppliers, customers and also third

party services providers. However, business managers in Nokia firm have been faced with a

problem which includes;

SUPPLY CHAIN AND LOGISTICS

Lack of assistance to the local service providers by the state

This issue has negatively impacted business manages in strategizing its operation in the

global market. Limited IT linkages, capital investments, and overseas corporate network are the

most common challenges facing managers in Nokia Company coming up with ways to venture

into the international business operations. Even though International freight services exist in

Finland, their existence doesn’t really help many local firms such as Nokia. According to Stank

et al., (2015), International Freight Service providers are not transparent to the local firms in

terms of sharing their development plans and knowledge towards enhancing the firm. Research

evidence has linked restrained growth of the domestic market to the limited range of logistics

service ( Christopher 2013). Furthermore, Croxton et al., (2014) claim that supply chains and

logistics present a tool to enterprises where they get a good competitive advantage over their

competitors. However, both supply chain and logistics are marred by numerous challenges

especially in today’s global business world as in the case of Nokia Company reviewed in this

paper.

c. Logistics

Stank (2015) describes logistics as basically the implementation of operations that are

complex to an organization and that are generally arranged and detailed. Logistics can be simply

put as the management of the way that things are moved in an organization from the point of

production to the point in which they are consumed or used by the end customer or client. Nokia

Company is usually involved in carrying out logistics in relation to the requirements that are set

forth by the business operations managers and the customer. Chen (2006) contends that the

resources that are managed vary in logistics and they range from equipment, food, animals, and

liquids which are all physical as well as information and time which are abstract components of

SUPPLY CHAIN AND LOGISTICS

an organization. Physical items in logistics for instance in the case of Nokia mobile phone

devices which basically involve the combination of information flow, production, packaging,

inventory, material handling, warehousing, transportation and often time security of goods before

it reaches the consumer. In simpler terms and in relation to supply chain management of the firm

under review in this context, logistics management is the section of supply chain management

that deals with planning, controlling the efficiency, implement, the forward and reverse flow of

the mode of storage of services and goods and not forgetting all the information that correlates

between the production point and the mobile devices consumption point so as to meet the

demands and requirements. Chopra & Sodhi (2014) argues that despite the challenges in

practices and complexity, logistics can be remodeled, optimized, analyzed and visualized using

the certain dedicated software. Some of the drawbacks faced by business managers on

establishing inter-country operations include

1. High taxes

The target country imposes high taxes on the movement of the Nokia firms’ products.

Besides, expensive labor costs and not forgetting the costs of transportation of raw materials that

will be used in the manufacturing processes negatively impact the business as well. This has led

to the company being forced to out-source and it only means more has to be spent to make

operations possible and the outsourcing may mean they have to out-source from different

countries for the production of different components of the product they are manufacturing. In

addition to this, having sources that are located in different geographical locations will most

likely increase the organization's procurement network which in turn prove to be more

complicated in relation to supply chain and logistics.

SUPPLY CHAIN AND LOGISTICS

2. Challenge adapting to the different shopping culture of the customers

Furthermore, subsequent expansion of sales to a global mobile phone market requires a

significant change on the localization of the current product as the organization tries adapting to

the different culture and the preference of the customers in different countries.

3. Competition due to fast-changing market structures and demand

Another challenge that this research found out on the reviewed company is that

establishing sales operations by a firm in different countries is in the fast-changing markets. Just

like globalization, this also presents a hoard of issues for an organization such as Nokia, the rapid

market change make the products have a shorter life cycle and preference by the customers. This

has pushed the firm to keep up with new trends by making efforts of introducing new products

which could not have been budgeted for, thus stretching the organizational finance. Apart from

introducing new products into the market, organizations such as this ought to keep updating the

appearance of their products and also the features of the products and these calls for a make-over

of their supply chains and logistics as to accommodate these changes (Chopra et al., 2014).

Conclusion

In conclusion, the performance of supply chain and logistics in any firm leads to both

problems and opportunities identifications. Therefore, possessing strategies and good measures

makes it necessary for the understanding and taking control of the organization’s supply chain.

Besides, it can be argued from this paper that putting the process, people a.s well as the

technology in place, in order to create a competitive advantage in new ventures, is key to the

success of the company logistic operations. This can be based on the fact that if the company

has none of these, its competitor will take the chance. Although senior management may not be

speaking logistics when it comes to corporate programs and goals, logistic on itself has been

SUPPLY CHAIN AND LOGISTICS

shown as the significant factor in the success of the company such as Nokia Corporation. It is

evident from this paper therefore that even though a company may have new ventures of new

markets in foreign countries, its success lies in its supply chain and logistics operations.

However, several firms face huge challenges implementing effective SC and logistics operation

and thus the reason for their ever staggering position in the new markets.

SUPPLY CHAIN AND LOGISTICS

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