Nokias Supply Chain Management Case Solution

The process creating business through value creation is divided into various phases involving manufacturing of components, substitute assemblies, and terminal assembly. The company is not limited to manufacturing; it also focuses on the research and development processes, and the channels of dispersion (Reed and Lemak, 2000). The route from materials in the raw form to the finished consumer product is generally a long one, involving around four to eight supplier layers assisting in various phases of manufacturing and distribution. A vertical supply chain process is used by Nokia which is prominent in mobile phone industry (Kähkönen and Lintukangas, 2012).

Some of the important components of mobile phones are manufactured by Phillips, NXP Semiconductor, STMicroelectronics and Cambridge Silicon Radio. Outsourcing remains the important part of their outsourcing process (Kähkönen and Lintukangas, 2012). They create the semiconductor chipsets for Nokia phones and are vital for the functionality of the phones. Hardware is made functional through the addition of software performing main processes of the mobile phone. The software is customized according to the needs of targeted customers, and different versions of software are installed for different countries (Kickul, Griffiths and Jayaram, 2011). The feature of a two steps manufacturing enables Nokia to meet customers demand in an effective way by offering different variations in a single handset, resulting in competitive edge over other mobile phone manufacturers. Nokia sells its finished products to various distributors; for example, Brightpoint Incorporation, and large corporations such as China Mobile (Kähkönen and Lintukangas, 2012). The distribution process continues, and primary distributors sell the products (cell phones) to secondary and smaller wholesalers. The dependency on operators or the retailers varies from country to country; hence, both the players play an important role in the distribution of Nokia cell phones to the end customer (Kickul, Griffiths and Jayaram, 2011).