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Posted: April 27th, 2023
MGMT7043 Supply Chain Management
Continuous Assessment 2 2023
Individual Assignment worth 60%
Report (45%)
Report
• Your report should be font size 12 and 1.5 line spacing.
• As a guide, the report document should be approximately 3,000 words in length excluding
references.
• Referencing: material sourced from books, articles and websites for use in your report
should be clearly and correctly referenced. Please use Harvard reference Style.
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Report Requirements (45%):
Please read the case study Nokia's Supply Chain Management and conduct further external
research as required.
• Introduction: Overview of the importance of supply chain management within the business landscape.
1. Describe Nokia and Ericsson’s approach to the management of their supply chain networks prior to and following the disruption under the following headings:
(a) The importance of information, how this information should be managed & controlled and how critical information influences strategic supply chain decisions for both organisations.
(b) Discuss the relevant impact for each organisation of inadequate supply chain integration
including information, inventory management and supply chain relationships.
2. Following analysis of the case study, please comment on:
(a) The strategic decisions that Nokia undertook to minimise disruption to its supply chain.
(b) The failure of Ericsson to adequately react to the supply chain crisis.
3. Review the supply chain risk management strategy of both organisations regarding the
following:
(a) What sources of risk need to be addressed into the future?
(b) What risk mitigation strategies could be employed to make both organisations more
resilient?
• Conclusion: Summary of key aspects of the report.
++++++++++
Sample Assignment Answer, Writing Guide
Supply chain management (SCM) is an essential aspect of modern business operations that encompasses the coordination of all activities involved in the creation and delivery of products and services to customers. Effective SCM involves managing suppliers, production, inventory, logistics, and distribution, with the aim of enhancing efficiency, reducing costs, and improving customer satisfaction. This report discusses the supply chain management approaches of Nokia and Ericsson, two leading telecommunications companies, and how they managed disruptions in their supply chains.
Nokia and Ericsson's Approach to Supply Chain Management
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Prior to the disruption, Nokia and Ericsson had different approaches to SCM. Nokia relied on a vertically integrated supply chain model where it owned most of its manufacturing and relied on its suppliers for raw materials and components. On the other hand, Ericsson used a horizontally integrated model where it outsourced most of its manufacturing and relied on contract manufacturers to assemble its products.
(a) Importance of Information and its Management
Both companies recognized the importance of information in their supply chain operations. Nokia had an information management system that enabled it to monitor its suppliers' performance, forecast demand, and manage inventory levels. It also used its knowledge management system to share information across its supply chain partners. Ericsson, on the other hand, relied on its contract manufacturers to manage their supply chain operations and did not have a centralized information management system.
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(b) Inadequate Supply Chain Integration
Inadequate supply chain integration can lead to disruptions, delays, and increased costs. In 2000, a fire broke out at Philips' semiconductor plant, a critical supplier to Nokia, causing a shortage of supply that lasted for several months. Nokia was able to mitigate the impact of the disruption by diversifying its supplier base, using air freight to transport critical components, and increasing inventory levels.
Ericsson, on the other hand, was heavily reliant on a single supplier, Ericsson Microelectronics, for its critical components. When Ericsson Microelectronics experienced production problems in 2001, Ericsson was unable to secure alternative sources of supply, resulting in significant disruption to its operations.
Strategic Decisions to Minimize Disruption
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In response to the disruption, Nokia made several strategic decisions to minimize its impact. First, it diversified its supplier base and established relationships with multiple suppliers to reduce its reliance on a single supplier. Second, it increased its inventory levels to mitigate the impact of supply shortages. Third, it used air freight to transport critical components, reducing lead times and ensuring the availability of critical components.
Ericsson, however, failed to react adequately to the supply chain crisis. It was heavily reliant on a single supplier and did not have alternative sources of supply. As a result, its operations were significantly disrupted, leading to delays in product delivery and lost market share.
Supply Chain Risk Management Strategy
Supply chain risk management involves identifying, assessing, and mitigating risks that can affect the supply chain's efficiency and resilience. To manage supply chain risks, Nokia and Ericsson should consider the following:
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(a) Sources of Risk
Supply chain risks can emanate from various sources, including supplier failure, natural disasters, political instability, and demand volatility. Both companies should prioritize risks that have a high likelihood of occurrence and significant impact on their supply chains.
(b) Risk Mitigation Strategies
To mitigate supply chain risks, Nokia and Ericsson should consider the following strategies:
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Diversify their supplier base to reduce reliance on a single supplier.
Increase inventory levels to mitigate the impact of supply shortages.
Implement a risk-sharing mechanism with their supply chain partners to share risks and responsibilities.
Develop a contingency plan that outlines actions to be taken in the event of a supply chain disruption.
References:
Chopra, S., & Meindl, P. (2016). Supply chain management: strategy, planning, and operation. Pearson Education.
Christopher, M. (2016). Logistics and supply chain management. Pearson UK.
Fawcett, S. E., Ellram, L. M., & Ogden, J. A. (2014). Supply chain management: from vision to implementation. Pearson Education.
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Li, S., Ragu-Nathan, B., Ragu-Nathan, T. S., & Rao, S. S. (2014). The impact of supply chain management practices on competitive advantage and organizational performance. Omega, 34, 107-124.
Mentzer, J. T., DeWitt, W., Keebler, J. S., Min, S., Nix, N. W., Smith, C. D., & Zacharia, Z. G. (2001). Defining supply chain management. Journal of Business Logistics, 22(2), 1-25.
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