As global mobile phone makers Nokia Motorola and Samsung have learned in order

As global mobile phone makers nokia motorola and

This preview shows page 17 - 19 out of 31 pages.

As global mobile-phone makers Nokia, Motorola, and Samsung have learned, in order to drive growth and market share in emerging markets, dis- tribution must be extended to ever smaller markets. For example, in China, Nokia is developing relationships with specialty retailers, consumer electron- ics chains, and small, regional or city-level distributors rather than working simply with a limited set of national distributors. Colin Giles, Nokia’s senior vice president for customer and market operations in the region, says: “China is so big and diverse that it’s not possible to classify it as a single market. That 17 Before the end of the second quarter of 2004, automakers will have recalled more than 14 mil- lion units in North America, exceeding the total of 2003 by 2.5 million, with warranty expenses exceeding manufacturers’ annual profits. Source: AMR Research and National Highway Traffic Safety Administration (NHTSA). See Kevin Mixer, Joe Souza, and Fenella Scott, “Early warn- ing solutions: A transformation roadmap,” AMR Research, June 21, 2004). Narishiko Shirouzu and Sebastian Moffet, “As Toyota closes in on GM, quality concerns also grow,” Wall Street Journal , August 4, 2004.
Image of page 17
54 BUILDING SUPPLY CHAIN EXCELLENCE IN EMERGING ECONOMIES is what we did three years ago. Today, we look at every market as different and we look for the best distribution or business model to suit that market.” 18 To capture these markets profitably, companies will find that planning, per- sistence, and flexibility are key. From our research, however, it is clear that few companies effectively build and leverage their global network when entering new markets. Not surprisingly, for most the major challenge to supply chain flexibility is forecast error, followed by long lead times, product proliferation, and supply chain visibility. These are all fundamental issues in building a prof- itable, sustainable business; without strong capabilities in these areas, global companies can rapidly lose the edge to smaller, national or regional competi- tors. Carlsberg, one of the world’s largest beer producers, acquired Poland’s Okocim to gain access to a valuable brand and expand into new markets in Central and Eastern Europe. To guarantee the future viability of the expan- sion, Carlsberg quickly realized that it had to restructure Okocim’s operations. Through an extensive assessment of production, packaging, distribution, and sales and marketing operations, the new network design includes a reduction in production sites from four to three, packaging sites from 12 to seven, and warehouses from 12 to six. Overall, the network optimization is expected to reduce total supply chain costs 15 percent while positioning the company for sales growth. Supply Chain: The Global Pursuit of Lower Manufacturing and Supply Costs. Sourcing from low-cost countries is the obsession of the day at multinationals around the world. Pushed by maturing markets and price com- petition from competitors sourcing in those low-cost locations, companies in
Image of page 18
Image of page 19

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture