Friday 15th Dec 2017 - Logistics & Supply Chain

Overall Award Winner 2008: Nokia Siemens Networks

The Overall Winner Award is the most highly coveted supply chain award in Europe. Over the 12 years of the European Supply Chain Excellence Awards there has been a succession of truly excellent winners, companies and organisations that have led the field for their innovative strategies, dedicated leadership, team engagement and exemplary execution. This year is no exception; the outright winner of the 2008 Awards demonstrates all the characteristics and attributes of a world-leading supply chain. In the words of the judges: “With this model they are going to be a leader in the transformation of their industry.” Who are they talking about? Well, let’s go through the process of filtering through the top contenders first.

All of the industry sector winners were of course reviewed for the Overall Winner Award and by definition, they all displayed excellence in at least parts of their supply chain operations. The industry sector winners were: Kimberly-Clark, Belron, Nokia Siemens Networks, Mondi, and Electrabel.

The judges liked Kimberly-Clark’s highly customer focused approach, its collaborative engagements and the application of its connected enterprise system. Electrabel impressed the judges with its transition from a cost-plus operating model to one based on availability. But there were closer contenders for the top award.

Network optimisation

Coming third overall was Belron. The judges say, “no one has done what they have in the industry in managing glass in this way. They have an extensive range of windscreens – there are issues around transportability, around availability – and they have a need to get to the scene very quickly. The way they manage, store and secure glass and offer the product variety that they do without actually carrying lots of inventory is pretty clever.” This project involved the optimisation of its whole network, from order through to delivery to the customer, and in the judges’ view, “this was all about providing outstanding customer service”.

International paper and packaging company, Mondi, demonstrated to the judges that it had transformed its organisation to create a truly end-to-end supply chain. The solution included an intelligent strategy, sound process architecture and a new IT system that supports the new strategy. Its primary focus was on increasing the transparency and visibility along the supply chain and it was evident that the company had clearly achieved this. The judges recognised that Mondi’s supply chain was customer focused, involved deep collaborative planning with customers, was a multi-year transformation and worked across all five core disciplines. Indeed, “Mondi has done all the things you would hope and expect to see in a supply chain improvement programme.” But for the judges there was only one clear winner. Second place then went to Mondi.

Nokia Siemens Networks operates 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. 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.

“NSN’s supply chain is really futuristic, it’s driving and enabling the strategy of the whole company,” say the judges. NSN is in a highly competitive market that is very margin/cost sensitive and equipment companies are less and less able to make enough profit on just the sale of boxes alone. The strategy it has adopted is to move to a service and solutions-orientated model, facilitated by the digitalisation of the whole telecoms business. NSN’s aim has been to create revenue streams from operating the product for the customer or by providing service contracts. This has refocused the supply chain around efficient means of installing, commissioning and servicing.

The company has gained benefits through the use of such techniques as remote commissioning, where service engineers no longer need to be present on site. According to one judge, “What really impressed me about the NSN solution is that they have taken a step into a part of supply chain management that is still uncharted territory, where the supply chain brings software and hardware together. They apply a lot of leading practices, such as merging products in transit at different points in the global supply chain network, with the ability to make decisions where pre-installation or commissioning takes place – in the hub or on site.”

NSN has also done a lot of traditional things like: having an end-to-end process architecture, having the associated supply chain strategy, using KPIs and making them the driver for organisational behaviour. The company too has demonstrated that it has put in place the traditional components of a leading end-to-end supply chain, but has applied them in a new way.

“Nokia Siemens Networks has done a great job by using all the best practice approaches to supply chain management and has applied them to a new area of the supply chain – an area which will become much more important in the future,” say the judges.

“Nokia and Siemens were in a do or die situation. They merged to form a new company to compete with the emerging Chinese threat to the telecom equipment market and in so doing they have created an entity with an industry leading supply chain – it’s transformational.

“They are really using their supply chain to create differentiation in the market place. With this model they are going to be a leader in the transformation of the industry – this company has taken a giant step forward.” Nokia Siemens Networks operates 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.

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