nokia telecommunications 2 rapid responsiveness product innovation flexibility cornerstone of...

Nokia Telecommunications:Redesign of International Logistics

-------------------------------Avimanyu Datta

Washington State University

Synopsis

Nokia Telecommunications 2

Rapid Responsivenes

s

Product Innovation

Flexibility

Cornerstone of NTC’s Extraordinary Growth

• Head Quarter: Epso, Finland• Supplies Telecom infrastructure

and systems over 40 countries.

• Large Niche telecom equipment player .

• Complex and deregulated marketplace.

• Market Pressure NTC to put uniform customer interface

Synopsis Market Pressure NTC to put uniform customer interface.


Product Development

Customer Commitment

A new Organization-Wide Process based operating mode

First Major challenge instituting an account management structure that requires

account manager to serve as an interface customer and all divisions.. NOT JUST ONE PROFUCT LINE

Need for Common support tools

A logistics system would allow managers › Spend more time with customer and tp perform analysis

Main topics of the case study

Global Business Strategy and Role of IT

Global Logistics Management

Pacing and Sequencing of Process and IT Changes

Global reengineering project Management

Critical Success Factors For Global Implementation of IT


Global business Strategy and the Role of IT


Global Strategies


• Simultaneously achieve global efficiencies, local responsiveness and high innovativeness.

• Rapid Deployment of Innovation Worldwide

• Foreign Subsidiaries depend on head quarters for new processes, products and know hows

• Closely Managed Worldwide activities through central control

• Economies from standardized product design, global Scale manufacturing

• Local responsiveness and Differentiation

• Foreign Subsidiaries to Operate autonomously

MultinationalGlobal

TransitionalInternational

NTC is moving toward

Transitional Model: Challenges, and Opportunities Transitional Model is a moving target and is

unreachable by most firms.

Until 1997 Information Systems were tailored to Strategic Business Units resulting in localized configurations.

Local conjurations are major barriers to implementing a global strategy.

The only global IT application that was truly global was e-mail system


Transitional Model: Challenges, and Opportunities NTC had basic hardware infrastructure in place

(WAN, LAN, hardware, OS, office Automation tools)

Connected 4 plants and 40 sales and service

centers throughout the World.

The newly adopted business process approach is seen as a driver for integrated systems

Each country will share the same or similar suit of common systems for core processes


Global Logistics management


Global Logistics Management: Need


Global Logistics Management

Operational Efficiencies

Reduce Lead Times

Decrease Inventory Levels

Improve Quality of Deliveries and

After Sales Services

•Customers want Uniformity and Consistency in dealing with NTC’s product Lines

•NTC wants top reduce internal costs to ensure enough resources for business growth

Global Logistics Management: Critical Success Factors


Sales and

Marketing

R&D

Production

Customer

Support

Communications Link

Customer Requirements

Complete Package of NTC Product and Services

Improve NTC’s ability to Translate


Measure

Control

Feedback

Responding Administrative

Areas

Transactional

Cross-Divisional

Levels

Global Logistics Management: Critical Success Factors

Means to

Information About

Local Offices to gain access to new product information residing anywhere within the

NTC

Production and Delivery times

Pacing and Sequencing of Process and IT Changes


Simultaneous IT & Process Change?

Arguments for Simultaneous Change OF IT and Process

Arguments for Delayed IT Change

Without the tools, the structural change will not lead to process change

An organization can tolerate only so much change at one time

IT enables reengineered processes, and reengineering success depends on IT systems

Markets & customers don’t change overnight; NTC has time to make changes

NTC might be alienating its key frontline people by giving them new responsibilities without any support

The structural changes will make account managers hungry for support tools


Arguments for Simultaneous Change of IT and Process

Arguments for Delayed IT Change

Without the IT tools, the structural change will not only increase the coordination costs but also response times to customers.

There would be an opportunity to see how the new concepts work before embedding them in an information system

The lead time of a structural change is much shorter than that of a major new IT system

The sales organization can become streamlined before committing to systems


Simultaneous IT & Process Change?


Simultaneous IT & Process Change? NTC Concentrated on Making changes in organizational

structure and providing new technology support while leaving the process changes in the hands and discretion of the local management.

In US business reengineering is top down. In Europe esp. Nordic region employees are consulted for job-elated design.

Changes are made by pull from external environment and customers rather than push from top management.

On the surface the structural changes looked drastic, in reality they were more gradual

Account Managers will report to country and area management rather than product division.

Account managers were also needed to have in depth knowledge about Product offerings.

Global Reengineering Project Management



High risk: State of the art technologies Unstructured requirements Large project

(McFarlan Risk Framework)


Management of the Project: +ve Aspects

Systems goals are synchronistic with market needs(responsiveness and operational efficiency)

Fundamental information needs were explored before any code was developed.

NTC thought through its business strategy and processes before embarking on a systems project.

NTC considered the reuse of an existing system(TRS logistics system) and an off-the shelf package for part of the system(it decided against both)



Management of the Project: +ve Aspects(contd) The system architecture is flexible (standardized

message-based interfaces between modules that are divided into global and local units)

The project champion understands the day-to-day needs of the end users.

NTC followed a phased approach to the implementation

NTC installed a common baseline system with options for local customization and add-ons.

There were executive visits to all the sites to sell the system



Management of the Project: -ve Aspects The project is overly ambitious

The project manager had little large scale information systems implementation experience.

NTC had no prior organizational experience in implementing global systems; it is unclear whether any staff had any experience of this sort.

There were too many IT people and outside consultants relative to the number of local managers with extensive sales function experience.



Management of the Project: -ve Aspects(..contd)

There was a lack of internal IT expertise, resulting in system maintenance and upgrade problems.

There was too long a lag time between the start of the project (early 1993) and when the field units witnessed the first release (mid 1995)

There was limited acceptance from employees ranging from reluctance to resistance to giving up locally developed systems or home-grown systems.


Critical Success Factors For Global Implementation of IT


Manage the field’s expectations of the benefits; it will take time for the field to adjust to the system and see the tangible value from it.

Choose pilot sites where there is a real potential to see reduced delivery times to customers.

Continue communicating to the field, stressing the system’s benefits (i.e. , personal benefits for account managers.)


Critical Success Factors for Global implementation of IT

Recommend to the steering committee that incentives be instituted for the systems use

Do an analysis of the “grassroots applications” and understand what is common among them (and make sure the international logistics incorporates them, even if in a later release)


Critical Success Factors for Global implementation of IT

Key Summary Lessons

The transnational model is an ideal,ever-changing target.

Electronic mail is the only truly transnational system supporting NTC globally; yet a transnational model calls for vertical, horizontal, external and temporal integration.

The global logistics process and systems will improve global operational efficiencies and organizational learning, reduce lead times, and improve quality of deliveries and after-sales customer service.

Cycle time for IT and structural changes differ resulting often in delayed IT implementation


Key Summary Lessons( contd)

Global reengineering projects require continual “pull” from the field.

Global reengineering projects fail if seen as a “push” from the HQ

Local customization must be managed.

Global reengineering is a fine dance of international diplomacy.


nokia telecommunications 2 rapid responsiveness product innovation flexibility cornerstone of...

Documents

analysis slide

global efficiencies

global strategy

business growth slide

global implementation

global business strategy

interface customer

ntcs product lines ntc