Nokia’s Case Study Summary

The case study addresses how a fire that broke up in one of the Royal Philips Electronics (Philips) plants in Mexico sent shockwaves to Nokia and Ericson companies. The main issue was that the supply chain had been disrupted since the two firms were on the verge of releasing new phone brands, which required the microchips that were affected by the inferno. Initially, reports reached Nokia that, to resume operations, Philips would take a week and this meant that the release of the new phones could have been delayed. This could have inconvenienced the company. Instead of blindly waiting for this, Nokia’s management took a step further to look for alternative suppliers to ensure that the process runs on smoothly. Ericson was caught unawares since the staff who obtained the news did not give exact information to the senior management.

From the case study, it is evident that Nokia is careful when dealing with its supply chain. The chain is made up of manufacturing plants, suppliers, sales, logistics service providers, and consumers. These aspects are interlinked, and Nokia ensured that it valued its suppliers. Thus, getting an alternative one was more comfortable since the main supplier was no longer viable and this could have interrupted the entire assembly process which was running on smoothly before the inferno. One can learn from Nokia’s supply chain management that being flexible pays off and it helps in dealing with uncertainties in the production and supply of phone accessories, such as microchips as in the case of Philips.

Finally, Nokia not only outsourced the production of microchips but also undertook an in-house manufacturing system to gather for the changing demands and other uncertainties. This has been helpful since early 2000 when the company was introducing new phones.

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