Nokia's Supply Chain Management

1. Why would the Ericsson technician not share news of the fire?

Ericsson supply chain management did not establish any standard operating
procedures for operation risk(s). They did not have training or system(s) to
quickly identify failure due to the supplier or other supply-chain related incidents.
Additionally, one-week delays were routine, and Phillips did not perceive the fire
as a major catastrophe. That is why the Ericsson’s technician did not share the
news of the fire.

This perspective of this technician may have been viewed as an incident in

isolation, not understanding the cascading effects on production. In addition to the
lack of procedures, this perspective could be an indicator that the overarching
culture in the company did not support an understanding of how the many parts
and functional areas of the firm were interdependent and interconnected.

Even without full comprehension of supply chain and logistics, basic employee
training about the company would help show that when observing unplanned
incidents of any kind, employees should feel compelled to share/inform/report to
others. Basics of good teamwork include communication of information, even if
an individual doesn’t have a full understanding of the potential impact.

1. What should Ericsson have done differently in response to the delay in chips?

Ericsson needs to build capabilities that allow the company to proactively respond
to supply-chain related issues and challenges. This includes critical process
assessments, risk mitigation strategies and values that are supported by data and
information technology and accessible to key stakeholders across the departments.

Ericsson needs to set up a supply-chain risk management system. It needs to map

all key components and products and identify critical suppliers. It needs to create a
partnership with other suppliers across the region(s). These majors may add to the
increased costs and lead time, but risk exposure always has a higher price at times.
These disruptions can be disastrous for an organization and not acceptable.

In contrast to Nokia, the Ericsson response reflected an overall lack of urgency and
efficiency. There seemed to be a largely reactionary and serial approach to decision-
making rather than a recognition that the situation was something other than
business as usual. Had there been suitable pre-planned responses in place, even for
some other set of circumstances, leadership might have been quicker to start
looking into the art of the possible in terms of mitigating the situation or developing
solutions.