Petri Jarvinen’s Supply Chain Agenda, Supply Chain Architect of Nokia

Nine questions about the topics on the supply chain agenda of a supply chain professional.

By Helen Armstrong

Telecommunication giant, Nokia, has seen many transformations. It started out as wood pulp mill in 1865 and took its name a few years later from the Nokianvirta river in Finland. The company also manufactured rubber products and later branched out into electronics. In the 1970s and 1980s it started developing mobile communication systems, notably in 1984 the portable car phone, Mobira Talkman, and in 1987 the Mobira Cityman. The advent of GSM the same year ignited a global mobile revolution  which Nokia was placed to take full advantage of. By the Millennium is was world leader in mobile phones and in 2005 sold its one billionth phone (a Nokia 1100).  Peak sales and profits came in 2007 but since then Nokia has faced tough competition from iPhone and Android based devices. In 2011 operating profit was minus 1.1. billion euros. Stephen Elop, formerly of Microsoft, was appointed CEO in 2010 in an attempt to turn fortunes around again. Since then the company has been undergoing a massive transformation.

Petri Jarvinen, Global End-to-End Supply Chain Capability Architect, of Nokia, talks to Supply Chain Movement about his role within a company undergoing a metamorphosis.

1. What is Nokia’s business strategy (or supply chain strategy): operational excellence, Product Leadership of Customer intimacy?

Clearly the company is in transition.  A year ago we changed our business strategy and started a major renewal of company culture. We are in a process of transformation and the supply chain has to adapt along side that of the business strategy. We now focus on two separate business units, Smart Devices and Mobile Phones, and the key this year is to optimise the supply chain of both.

The business units have very different characteristics. The Smart Devices are at the high end of product development. The focus is on consumer intimacy and we have to be agile and highly responsive. Our strategy for the Mobile Phones business unit is operational excellence: To be highly cost efficient and predictable. Traditionally our operations were the same for all products. Now the priority is to have clear goals for the different business units, develop specific supply chain capabilities and execute accordingly. The challenge is to differentiate when we were used to one model.

2. What is your responsibility regarding the supply chain?

My responsibility is to ensure e2e capability development for Smart Devices and Mobile Phones supply chains. The aim is to differentiate the two units but at the same time make sure we optimise the synergies between them. The supply chain for Smart Devices has to be very responsive and that for mobile phones has to be low cost. Because the supply chain strategy is now strongly integrated with the business strategy, this drives development of our supply chain capabilities.

3. What are the main business challenges that drive supply chain projects at the moment?

We have a challenge of cross function alignment and the supply chain plays a key role in driving the alignment. Smart Devices focus on market and Mobile Phones on cost yet both supply chains need to reduce time to market and execute faster. That means launching products faster and keeping our promises, externally and internally within the company starting with R&D. For example, in February 2011 we announced that our key strategy was to move from our own platform to a Microsoft Windows platform in our Smart Devices. Within a few months we launched the new products which was a big improvement on execution and time to market than previously.

4. What supply chain challenges keep you awake at night?

What keeps me awake at night is alignment – how can we align our targets and objectives and action plans to make sure we are all working towards the same goals? We have to ensure that the business strategy drives everything we do in supply whether it be for the Smart Devices or Mobile Phones.

5. What do you do about these challenges?

We are trying to reduce complexity by simplifying and rationalising the portfolio of products and e2e processes. We are collaborating with our suppliers and tightening our supplies.  They are well integrated and we need to collaborate much more deeply with them.

The signals we gave our suppliers in the past were not always very accurate yet we still expected them to respond. They had to bear the risk. As part of our transformation we realise we have to give them much more reliable and clearer information. Also, we are trying to reduce the complexity of our demand and operations planning. We ask ourselves, “How much do we really need to plan?” Planning is now less frequent and less people are involved. Having more people does not necessarily improve accuracy.

In 2011 the company underwent a big reorganisation and now the operations teams and IT teams work together and have a combined unit integrated with operative teams. As we work towards a faster execution speed with shorter times to delivery we have adopted an agile way of working.

6. Who do like to meet for exchange of knowledge?

I always try to look outside our own business field and talk to colleagues from other industries. Companies are different but the challenges are the same. I’d really like to meet the supply chain executive from Zara as I’d like to know how they manage time-to- market. They have high numbers of SKUs, change the product offering very frequently yet have a very fast time to market on a global basis. It would be very useful to see how they do this.

7. Which book has inspired you and why?

One I like in particular is, “The leader who had no title” by Robin Sharma. His philosophy is that anyone can lead and influence people. It’s how you behave, your attitude and how you build relationships with others is what matters. It includes lots of useful slogans and practical tips both for private and business life.

8. Where do you expect to be professionally in five years?

The supply chain is my passion and it’s customer service that drives me on. My energy comes from being able to do it right for the customer. Nokia is going through a transformation and we will return to being world class as a business and how we manage the e2e supply chain. We can be even better than before. I want to be in a role in which the supply chain can underpin this transformation.

9. What do you use as an agenda?

In that respect I’m very traditional. I have a black book in which I write things down.  On the other hand technology helps us share information and organise meetings internally and we enter into dialogue via blogs and the community intranet. However, I still prefer face-to-face discussion and interaction.