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Published by: Institute for Management Development (IMD)
Originally published in: 1997
Version: 29.01.2004
Length: 15 pages
Data source: Field research

Abstract

This is the first of a three-case series (IMD-6-0197 to IMD-6-0199). At the end of 1995, the superheated growth in the cellular phones business slowed down, coinciding with a global lack of semiconductors. Inventories started building and costs climbing. After two profit warnings between November 1995 and February 1996, the share price of Nokia Mobile Phones, the world''s number two cellular phone manufacturer, fell below 50 % of what it was in September the previous year. The series describes the challenges that companies have in high growth, high technology industries in terms of demand chain effectiveness and globalisation of good demand chain practices. The (A) case describes the Supply Line Management program that Nokia Mobile Phones started to improve its demand chain practices when it realised the vulnerability of its chain. The (B) case explains how a supplier partnership was implemented between NMP''s Bochum factory and Rohm Electronics in Germany. The (C) case describes how the work of NMP''s materials management and supply line teams helped to get the company''s logistics on solid footing again. The results are put into the perspective of managing the whole demand chain; as a start for continuously challenging the existing supply and demand chain management practices. A video ''Nokia Mobile Phones (A) (B) and (C)'' (IMD-6-0197-V) is available to accompany this case series. This case was submitted for inclusion in the Indiana University CIBER Case Collection through a CIBER- sponsored case competition.
Location:
Industry:
Size:
USD8,500 million
Other setting(s):
1995-1996

About

Abstract

This is the first of a three-case series (IMD-6-0197 to IMD-6-0199). At the end of 1995, the superheated growth in the cellular phones business slowed down, coinciding with a global lack of semiconductors. Inventories started building and costs climbing. After two profit warnings between November 1995 and February 1996, the share price of Nokia Mobile Phones, the world''s number two cellular phone manufacturer, fell below 50 % of what it was in September the previous year. The series describes the challenges that companies have in high growth, high technology industries in terms of demand chain effectiveness and globalisation of good demand chain practices. The (A) case describes the Supply Line Management program that Nokia Mobile Phones started to improve its demand chain practices when it realised the vulnerability of its chain. The (B) case explains how a supplier partnership was implemented between NMP''s Bochum factory and Rohm Electronics in Germany. The (C) case describes how the work of NMP''s materials management and supply line teams helped to get the company''s logistics on solid footing again. The results are put into the perspective of managing the whole demand chain; as a start for continuously challenging the existing supply and demand chain management practices. A video ''Nokia Mobile Phones (A) (B) and (C)'' (IMD-6-0197-V) is available to accompany this case series. This case was submitted for inclusion in the Indiana University CIBER Case Collection through a CIBER- sponsored case competition.

Settings

Location:
Industry:
Size:
USD8,500 million
Other setting(s):
1995-1996

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