In May 2009, Finland-based Nokia Corporation (Nokia), the world's leading manufacturer of

mobile devices, was placed sixth in the list of top 25 companies in global supply chain
management, announced by AMR Research (Refer to Exhibit I for AMR Research Supply Chain
Top 10 List for 2009). According to AMR Research, "Nokia continues to stay ahead of the curve
on everything from regional sourcing and deep supplier collaboration to an organizational design
based on true value chain principles." AMR Research selected the manufacturing and retail
companies from Fortune's Global 500 ranking. The companies were judged on the basis of two
components -- financials and opinion, where the financial component accounted for 60 percent
and the opinion component for 40 percent of the total score. The financial component included
"return on assets i.e. the ratio of net income and total assets, inventory turns i.e. the ratio of cost of
goods sold and inventory, and revenue growth i.e the change in revenue from prior year. The
opinion component included a panel of AMR Research experts and a peer panel, each giving a
maximum score of 20 percent. Founded in 1865 as a paper mill, Nokia started producing phones
in 1982. The company had interests in several businesses including telecommunications, consumer
electronics, rubber, and cable. In 1992, Nokia took a strategic decision to focus only on the
telecommunications business and to close down its other businesses. And this decision paid off.
Its focus on the telecommunications business had turned Nokia into a global leader by the year
1998. According to industry experts, Nokia's supply chain management was the key factor for the
success of the company. The company maintained a long-term relationship with its suppliers and
helped them in improving their processes. It also adopted the Smart manufacturing technique so
as to enhance the competitiveness of its manufacturing facilities.
The company had a wide distribution network which helped it to effectively reach the end
customers. The case highlights the unique supply chain management practices of Nokia. It also
discusses the impact of global economic slowdown on Nokia's revenues and profitability. The case
examines how the company is making its supply chain efficient to counter the impact of reduced
demand of mobile handsets.

Issues:
Understand the importance of efficient supply chain management practices in the success of any
business.
Study the supply chain management practices at Nokia.
Appreciate the need for a customized supply chain while operating in different countries.

Analyze the challenges faced by Nokia.