Telecoms & Electronics Award Winner 2008: Nokia Siemens Networks

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As always, this is a greatly contested category. The Telecoms, Hi-Tech & Electronics sector consistently scores highly and is typically the highest scoring sector in the awards programme owing to its unique demands and its correspondingly advanced practices and developed capabilities across the supply chain. Again this year, this proved to be the case with top scoring entries from Axis Communications, BT Supply Chain, Hewlett Packard CDS, Hutchinson 3G UK and Nokia Siemens Networks.

Hutchinson 3G and its service provider TRS have been working for the past three years to develop a three-day, end-to-end handset repair operation and BT Supply Chain has been active in integrating numerous standalone supply chain operations and capabilities, resulting in a £16 million contribution back to the business. However, although these two entries were very good the three that came out strongest were Nokia Siemens Networks, Hewlett Packard CDS and Axis Communications.

Axis Communications’ entry focused on three key areas: process contracts with key suppliers; a strategy for the introduction of four distribution centres (DCs) by 2010; and the governance of DCs in three different countries. The company is also standardising S&OP across several sites which decreases the planning lead-time from a day to just a few hours. In addition, Axis now has extensive VMI co-operation with its two largest contract manufacturers. Although this was a strong entry, the scoring mechanism pointed to the two main contestants in this category being Nokia Siemens Networks and Hewlett Packard CDS.

HP CDS has been on a two-year journey focused on a Logistics Excellence Programme (LEP) involving its third party logistics service partner, Rico Logistics. The resulting investment in automation has reduced stock levels by £2 million – a trend that is expected to continue in the near future – with no detriment to customer service. The use of technology has improved accuracy and stock visibility, which has also reduced stock loss and improved stock churn. Since the start of the LEP, stock loss has been reduced by 50 per cent.

Automatic purchase order generation has also been implemented at HP CDS. Previously there was a large amount of manual intervention required when placing orders with suppliers, but now more than 65 per cent of all purchase orders are raised automatically. In fact, this was all good stuff.

However, it was up against a truly outstanding supply chain, that of Nokia Siemens Networks, which transpired to be this year’s overall winner.

NSN is in a highly competitive global market place where low-cost manufacturers from the Far East are driving Western telecoms network equipment providers to consider significant and far reaching strategic change. In fact the company is the result of a merger between Nokia and Siemens’ network businesses, created to compete in this fierce market.

NSN has followed a radical transformational strategy where new processes were defined and implemented, new facilities established, and major SAP changes undertaken – all significant tasks.NSN has followed a radical transformational strategy where new processes were defined and implemented, new facilities established, and major SAP changes undertaken – all significant tasks. The extensive programme of implementation has completely transformed the previous operating structure (Siemens and Nokia), creating a new best-practice model – a truly end-to-end supply chain. The results are impressive: installation cost reduction per installed system of 50 per cent; service installation cost reduction of 20 per cent; installation engineering productivity improved by a factor of 2-3.

For the judges, “the clinching factor here is the criticality of the supply chain transformation from a business perspective – this boils down to, either we are able to make these changes, and we have a competitive business, or we can’t make these changes and we don’t have a competitive business – it’s that critical. It’s truly using the supply chain as a competitive weapon.

“With this model they are going to be a leader in the transformation of the industry – this company has taken a giant step forward.” The winner had to be Nokia Siemens Networks.

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