Rethinking your distribution network

Transcription

1 Rethinking your distribution network 19 th Annual Supply Chain & Logistics Summit, Barcelona Padraig Healy, VP Global Supply Chain Management Public

2 Overview Background on Nokia Considerations impacting distribution footprint Industry 4.0, Digitisation and IoT 2 Nokia

3 3 Nokia 2015 Public

4 Gartner 2017 Supply Chain Top25 rankings Nokia keeps on climbing Breakthrough in position 15 The Supply Chain Top 25 rankings comprise two main components: business performance and opinion. Link to Gartner Press Release 4 Public

5 Scary Facts Fortune 500 companies 1955-to % gone 2000 to % 5 gone

6 A position of strength and strong profitability in the face of market headwinds # 2 in 4G* # 1 in copper access* 40.0% Non-IFRS gross margin 23.9b n # 2 in edge routing* # 3 in services** 9.1% Non-IFRS operating margin * Figures and positions reflect market share as of Q3 rolling 4 quarters and YTD Source: Dell Oro. ** Figure and position is is based on revenue estimates of Nokia vs. competitors 6 Nokia Nokia Public Non-IFRS net sales

7 150 years of successful reinvention Mobile Network Pulp, Paper, Launched Networks transformation plan Launched Created Alcatel-Lucent Nokia Shift Plan Technologies Launched Nokia OZO Completed Alcatel-Lucent Shift Plan Rubber boots, Early Bell System, Mobile phones Acquired Motorola Solutions wireless networks Sold Devices & Services Acquired Alcatel-Lucent Acquired Withings 7 Public IP Products ONT Fixed Networks

8 Complexity of Nokia Distribution Network 8 Hubs xdoc s Country warehouse Balance between large Hubs to drive economies of scale and xdocs/country warehouse to support staging for Project readiness Nokia Global Distribution Global Hubs (distribution centers) 9 Global presence with facilities in (countries) Key global LSPs Drop-off Points (DOPs) in countries ~200 Outbound cubic meters shipped 2016 ~700,000 Outbound TMS usage coverage %

9 Overview Background on Nokia Considerations impacting distribution footprint Industry 4.0, Digitisation and IoT 9 Nokia

10 What is most appropriate time to add more distribution facilities to reduce Inbound and outbound miles Customer & Supplier Footprint Transportation cost & capacity Product Complexity Service Levels In Transit Inventory Costs Supply Lead-times Component Lead times Customer Lead times 10

11 Role of technology in network decision making Data rich & information poor? Network Optimisation Technologies Outcome of Network Optimisation 11 * Illustrative only, not actual data Challenge is how to manage large amounts of data to model complex scenarios?

12 Volume m3 Segmented Distribution Model One Size Does Not Fit All! High Configuration & Value added Services Supplier Value Added Services Hub Customer Consolidation Capability 3 Lean Fulfilment Complexity High The key is to develop a distribution network that is adaptive to the changing business requirements 1 2 Cost to serve Customer perceived value 12

13 Overview Background on Nokia Considerations impacting distribution footprint Industry 4.0, Digitisation and IoT 13 Nokia

14 Real time Transportation Management Capability INTELLIGENCE Optimization Consolidation Automation TRANSPORTATION CONTROL TOWER $ Center of excellence Global e2e transportation management Transportation Cloud EXECUTION VISIBILITY Real time Monitoring Reports, dashboards Proactive alerts COST MANAGEMENT Visibility: Estimated vs actual costs Rate, match, pay INTEGRATIONS ERP integration LSP ecosystem Inbound transportation flow Reduced freight cost Increased on-time delivery Harmonized tools & processes Increased flexibility Outbound transportation flow Transportation control tower: Center of Excellence Improved Supply Chain visibility Increased logistics efficiency 14

15 Implications of Industry 4.0 on Distribution Value Chain Integration Information Transparency Products participate in their own value chain Fulfilment, Maintenance, service Adaptable Production requests etc. Lot-size 1 mass production and reconfigurable factories Smart Sensors Transportation Visibility Augmented Worker Predictive Analytics Supply Chain Orchestration Technical assistance systems for workers 15 Box On Demand

16 Summary - Rethinking your distribution network 1 Rethink your network 3 One size not OK 5 Disruptor 2 Technology is differentiator 4 Real Time Data 16 Dynamic and adaptive network

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