Manufacturing Executive - January/February 2009 - (Page 8) STARTERS Reported and written by Mark Halper and Paul Tate SUPPLY CHAIN DÉJÀ VU Mobile phone company Nokia can draw on past experience as it consolidates warehouses following its merger with Siemens. TRENDSETTER achieve some of the reductions we’ve hoped to achieve across the supply chain.” Now that the job is almost S upply chain executives at Finnish mobile phone pow- done, Nokia can do it all over again. That’s because the net- work division of Siemens, with which Nokia merged in 2007, ing system. runs the old, localised warehous“We now have the same seen this before. In the late erhouse Nokia have 1990s, the network division — that’s the one that sells base stations and other transmission gear to cellular operators — decided to cut costs and speed up delivery times by closing thousands of European ware- complexity we had in the late ’90s where we had seven or eight different planning pro- cesses and probably about 50 or 60 instances of SAP across the region,” Dyson said. houses and consolidating into a few central facilities. the world to accept more standardised products because omised orders the way the costlier localised warewasn’t easy. “It’s taken housing scheme could. It us a number of years to At the time, Nokia asked the Vodafones and Oranges of consistently tops supply chain charts; research firm AMR Helsinki now hopes history can repeat itself. Nokia did a good job the first time around. The company consolidated warehousing could not as easily support custS U P P LY C H A I N Research ranked Nokia as the world’s number two in 2007. OF MICE AND SUPPLY CHAINS Illustration (top): Alexander Raznatovskiy, Illustration (left): Ahmad Hamoudah actually convince customers about the reasons for supply chain manager change,” said Chris Dyson, for West South Europe at say it probably took at Nokia Siemens. “I would least five years before we got to a very good level of standardisation within the product to enable us to If a manufacturing executive were to amend the words of John Steinbeck, it might go something like this: “The best-laid plans of mice and supply chains often go awry, especially at the end of the fiscal year.” Manufacturers’ customers have a habit of placing surprise orders as their yearly budgets draw to a close to make sure they spend their annual financial allocation. This can wreak havoc on planned supply processes that assume a different order rate. “In some industries, it’s a big problem,” said Tim Lawrence, senior supply chain consultant with PA Consulting, during a panel discussion at the recent Demand Driven Supply Chain conference in London (see Roadtrip, p. 48). During the same panel, Chris Dyson, supply chain manager for West South Europe at Nokia Siemens, remarked, “I could give you examples which make absolutely no business sense: hiring jumbo jets just to send products to companies to hit financial year-end targets.” Alastair Charatan, director of EOC Consulting, agreed, saying, “It adds costs left, right, and center.” Maybe Ian Heigh, of humanitarian relief consultants Global Emergency Group, was right when he said at the Supply Chain Council gathering in Budapest earlier in the autumn, “There are two types of forecasts: lucky and wrong.” Advice to supply chainers: Planning is great, but if you don’t also have the agility to absorb these year-end surprises, then Dec. 31 could signal the winter of your discontent. 8 Manufacturing Executive JAN/FEB-09
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