Ericsson shares its experiences as it continues on a major transformation journey, including launching a new careers site to better engage with potential candidates.
One of the most famous or rather infamous cases is the fire at the Philips microchip plant in Albuquerque, New Mexico, inwhich simultaneously affected both Nokia and Ericsson. Ericsson, on the other hand, is another story. Nokia In the late s, Swedish-owned Ericsson was one of the big international players in the mobile phone Ericsson case study, together with the Finnish company Nokia.
My first mobile phone in was in fact a Nokia, but I switched to Ericsson inbecause they made much better phones, so I thought. The Albuquerque fire On March 17,a small fire hit a microchip plant owned by Philips, the Dutch company.
Nokia verus Ericsson Nokia acted swiftly and moved to tie up spare capacity at other Philips plants and every other supplier they could find.
They even re-engineered some of their phones so they could take chips from other Japanese and American suppliers. Ericsson, meanwhile, had accepted early assurances that the fire was unlikely to cause a big problem, and settled down to wait it out. When they realized their mistake it was too late: Since Ericsson a few years earlier had decided to buy key components from a single source to simplify its supply chain, Ericsson now had to face the bitter realization that it had no other source of supply.
Nokia had already taken it all. Single sourcing may have its benefits, but it has its costs, too. Ericsson lost many months of production, and hence many sales in a booming market that could now be dominated by Nokia. Eventually Ericsson merged with Sony in order to survive, and eventually I too had to switch back to Nokia.
It starts with mapping all the components and and products many tiers upstream the supply chain and identifies critical suppliers and sites that have to be prioritized and assessed further.
After a rough assessment on how shortage will affect the supply chain, a more thorough investigation into probability and impact of different accidents at different suppliers is conducted to assess the impact on the supply chain as a whole, particularly the impact on business recovery time.
Finally, risk management actions protection are evaluated against risk costs impact and consequencesto avoid over-action or over-insurance against incidents.
Lessons learned Not only Ericsson, but many other companies have also learned from this incident. Supply chain risk management SCRM is a necessary component of any supply chain.
SCRM may lead to increased costs in the from of prevention measures, and SCRM may lead to increased lead time, in order to have buffers, should something happen.
In essence though, risk exposure always has a price, and as a company one should think through what price or rather cost, as in disruption cost that is acceptable or not.
Lessons not learned This article was written inwhen Nokia was still a major player in the mobile market. While Nokia may have learned a lesson in supply chain resilienceNokia did not learn what it would have taken to stay a major player.
That is unfortunate, because Nokia phones have always been my favourite, and I would have loved to see Nokia continue making phones. The Wall Street Journal, January 29, A case study of how Southern Linc, the wireless communications network backed by the strength and reliability of Southern Company, transitioned to a highly reliable LTE network while meeting strict security requirements.
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Approved Resource Provider to Ericsson Region Sub Saharan Africa. First Point Group, is an Approved Resource Provider to Ericsson Region Sub Saharan Africa (RSSA) and we have assisted Ericsson greatly in with its long term goal of localising recruitment in Democratic Republic of Congo.
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Ericsson versus Nokia – the now classic case of supply chain disruption. Posted on by. Ericsson lost many months of production, and hence many sales in a booming market that could now be dominated by Nokia. Bummer. Eventually Ericsson merged with Sony in order to survive, and eventually I too had to switch back to Nokia.