Nokia: Manufacturing Outsourcing Not Required

Some of the statistics in this short Business Week piece on Nokia, the global cell phone giant, blew me away. Did you know that in 2006, Nokia "will handle more than 100 billion parts in its 10 factories scattered around the world." This means that everyday, Nokia's global facilitates will "take in an average of around 275 million components—and then spit out 900,000 finished mobile phones at the other end of the line." All of this is even more remarkable when one considers that the production lifecycle of a single model is measured in months, not years. Still, while Nokia is of the firm belief that owning the manufacturing process is critical to its competitive advantage in the market given the complexity and scale of its operations, it has also invested significantly in capabilities to mange, develop, and improve its global supply base.

This story, posted on a university website, does a good job excerpting different pieces from a number of sources to illustrate how Nokia turned a looming supply chain crisis into an opportunity. When it comes to avoiding supply disruptions, it’s the ability to identify potential issues as early in the process as possible that enables organizations to take action before disruptions occur. No one said proactive supplier management is easy. But Nokia’s experience provides great evidence that when companies look at potential disruptions as an opportunity to improve their overall supply chain performance, anything is possible.

Jason Busch

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