Inventory Management in Nokia Company


Nokia has formed 137 years ago as a paper, rubber, and tires manufacturing company, by merging three companies. It entered the telecommunication industry in 1960, initially making radio transmission equipment (Haikio, 2008). In the 1980s, Nokia acquired several companies such as the Standard Elektrik Lorenz of Germany, Ericsson’s information system division, and the French consumer electronics Limited. The company later fully launched into the telecommunications industry and has to date established a market in every major global market.

Nokia’s core business is telecommunications. The corporation is the world’s leading manufacturer of mobile devices (Haikio, 2008). Its success is attributed to well-established supply chain management and effective inventory management. The choice of company was based on the fact that Nokia is a global company and has been successful in managing its inventory. The company has an integrated supply chain inter-linking its manufacturers, suppliers, and customers. For it to reach its customers all over the globe, the company has put in place an extensive distribution channel. With a presence all over the globe, it requires an effective inventory management system to ensure its customers reach their products and the business minimizes expenses associated with distribution.

Inventory management

“Nokia manages its inventory management system by using research to identify the proper products for each market” (Nokia Siemens Networks, 2009). By so doing, the company only sends the required products to a market. Having enough market information on consumption and consumers’ preferences enables a company to save on the cost of returning products that may have been sent to the wrong market. It also saves a business the cost of warehousing products that are experiencing a slow movement in a certain market. Any cost of damage or stolen inventory is minimized as well as the cost of time spent on managing the inventory (Nokia Siemens Networks, 2009).

Nokia is also able to manage its inventories by manufacturing the right quantities of its telecommunication products. Proper inventory management calls for proper variety and quantity maintenance. “It is very important to ensure that a business is not caught with an overstock of obsolete products” (Nokia Siemens Networks, 2009). Nokia ensures this does not happen by having accurate records on what is already in the market, what is in the warehouses, and what is under production. Their supply chain management can advise their purchasing and sales managers on when reorders should be submitted and when they should not. They also advise the company on when a certain product should no longer be in stock.

The knowledge is acquired by analyzing different market trends, which is done by using records and experience. Studying markets enables the organization to make its orders on time and their distributors do the same. Distributors are then able to receive products when customers need them and do it on time before their stocks run out. A business would not be able to adjust its production to suit demand if they don’t constantly review their purchasing and selling plans. “Establishing stock levels such as maximum and minimum levels helps distributors know when to re-order” (Nokia Siemens Networks, 2009). Working closely with distributors allows Nokia have an accurate supply chain since they have accurate information on the movement of goods from distributions, who in turn have information from the retail shops.

The easiest way to manage inventory is to use inventory management technology, which Nokia has used to give the business one of the best inventory management systems (Nokia Siemens Networks, 2009). The Nokia Siemens Networks Inventory solution offers the business and many other companies an end-to-end view of their different goods distribution networks (Nokia Siemens Networks, 2009). It allows Nokia to maximize its inventory management quality while achieving cost savings. The product also allows Nokia and other businesses which use it a reduced deployment time, improved efficiency, and reduced costs.

The product inter-links products information and data to the synchronizing managers, who can ensure efficient product flow management. The procurement department, customer care, billing department, planning, service assurance, and the reporting department are all interlinked to create one information path. The products, subscribers, and other networks then have a channel to return feedback to the information model manager, who can pass it on to the rest of the chain.

Flexibility is very fundamental in Nokia’s inventory management. It is a critical part of ensuring that the business has a future-proof inventory management system. Flexibility is important to ensure that the business can easily integrate new technologies into its system. By so doing, Nokia can adapt to the growing and changing markets, meet its customers changing demands and have a cost-effective distribution system.

Reference list

Haikio, M. (2008). Nokia: The inside story. London: Pearson Education.

Nokia Siemens Networks. (2009). Nokia Siemens Networks Inventory Management. Finland: Nokia Siemens Networks.

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