Supply Chain Management at Nokia Siemens Networks


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Supply Chain Management at Nokia Siemens Networks

  1. 1. Supply Chain Management at Nokia Siemens Networks Logistics Order Management – Process Outsourcing Friedrich Löer – Partner, TPI Johannes Giloth – Head of Supply Chain & Logistics, Nokia Siemens Networks SSOW Amsterdam 10th of May, 2011Copyright © 2006, Technology Partners International, Inc. All Rights Reserved. No part of this document may be reproduced in any form or by any electronic ormechanical means, including information storage and retrieval devices or systems, without prior written permission from Technology Partners International, Inc.
  2. 2. 2 Introduction Nokia Siemens Networks has transferred a significant part of its Supply Chain Management activities – end-to-end Order Management – to a service provider in a comprehensive transformational outsourcing deal. Cost reduction is an important objective but pure labour arbitrage is not the solution. The target is to transform a fragmented, reactive and costly set-up into a world-class end-to-end supply chain. It is about: process transformation, processes and interfaces, leveraging with external partner and cultural change. Johannes Giloth – Head of Supply Chain & Logistics, Nokia Siemens NetworksCopyright © 2010, Technology Partners International, Inc. All Rights Reserved
  3. 3. Supply Chain Management atNokia Siemens NetworksLogistics Order Management – Process OutsourcingJohannes Giloth – Head of Supply Chain & Logistics3 © Nokia Siemens Networks
  4. 4. Nokia Siemens Networks background Three years ago Nokia Networks and Siemens Communications joined operations to create Nokia Siemens Networks • Nokia Siemens Networks is one of the largest telecommunications hardware, software and services companies in the world; in terms of market share second only to Ericsson. • Nokia Siemens Networks serves more than 600 telecommunications operators globally; 75 of the top 100 operators are Nokia Siemens Networks’ customers. Over 1.5 billion people connect through Nokia Siemens Networks’ networks. • Some key facts: Business in more than 150 countries Eight regions: North America, Latin America, West & South Europe, North East Europe, Middle East & Africa, China, India and Asia Pacific Major manufacturing sites in China, Finland, Germany and India More than 60,000 employees of which 28,000 are service professionals.4 © Nokia Siemens Networks
  5. 5. The initiation of Programme Libra Global Logistics initiated Programme Libra to identify, evaluate, select and implement optimisation options to provide bold and sustainable increases in process effectiveness, customer satisfaction and cost efficiency from 2010 onwards5 © Nokia Siemens Networks
  6. 6. Logistics order management process scope wasagreed globally – across 8 regions Logistics Order Management Process Procurement & Prepare for Customer Order Inventory Distribution Invoicing Delivery Entry Management Receive and Validate Check Customer Logistics Data Setup Customer Purchase Purchasing Shipping Invoice Trigger Order Reached Operative Site Receive Supplier Check Invoice Enter Order Transportation Creation delivery Details CT Inventory Export Verify & Correct Schedule Order Monitoring Control & Customs Invoice Details Confirm Customer Create Customer Purchase Order Invoice Customer Query and Complaint Management Key User Services, Technology roll-out support and Process Improvement support Logistics management services capability development; Provision of consultancy support with Nokia Siemens Networks Third party interface and query management7 © Nokia Siemens Networks
  7. 7. To select an appropriate BPO solution and ServiceProvider we used TPI’s M-Step approach 4 Service Providers 2 Service Providers CapgeminiProcess Flow Checkpoint Checkpoint Checkpoint Sign Finali Initiate Collaborate Define Contract seTimeframe 8 weeks 11 weeks 11 weeks 5 weeks 1 week Documentation Briefing Pack Full Full Draft (w/ RFP Report Report Draft Final Final RFP Agree- Eng.Terms) Agree- Agree- Agree- Client Card Card ment ment ment ment Proposal Proposal Revised Revised Revised w/ Firm w/ Firm Revised Service NDA NDA Pricing Agree- Agree- Pricing Proposal ment Proposal ment Provider Due Diligence Interaction Q&A Negotiations IDW Walkthrough Q&A responds to Service Provider’s specific questions Due Diligence allows Client to confirm Provider’s capabilities and allows Provider regarding the RFP Initial Design Workshops to validate Client’s environment Walkthrough sessions are used to clarify and improve collaboration sessions focus on Solution Service Providers’ proposals Negotiations conducted in parallel with both Providers up to BAFO8 © Nokia Siemens Networks
  8. 8. Three inter-related projects were initiated todeliver the project benefits10 © Nokia Siemens Networks
  9. 9. Transition – Service Delivery Scope to be defined LAT GuatemalaSite Campinas Munich Gurgaon Beijing “presence centers” CityNumber at site after 134 14 36 37 449 57Extended Scope11 © Nokia Siemens Networks
  10. 10. The Transformation programme is a joint effortbetween Capgemini and Nokia Siemens Networks Transition programme management Process & Role Development Service Levels & Reporting •To-be process design •Review & refine Service Level definitions •Gap analysis with current •Review & refine reporting requirements •Role & responsibility design •Implement with Capgemini as required Workflow Tool Order Validation Tool •Design tool to support process & roles •Design tool to support process & roles •Prototype tool with user groups •Prototype tool with user groups •Integrate with systems as required •Integrate with workflow Tool Pilot Transfer to Capgemini Delivery Centres •Pilot in one or more regions •Consolidate service delivery •Refine design as required •Harmonise to to-be process •Pilot system integration •Implement global Service Levels Roles & Responsibilities E2E Process Deployment •Confirm roles against process •Implement to-be process across >150 •Implement new roles countries •Train & support staff •Train & support staff13 © Nokia Siemens Networks
  11. 11. The high-level Transformation plan is aligned with Transition milestones 2010 2011 2012 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec H1 H2Process development / R&R 1 1 Workflow tool requirements TO BE [L100-L700] approved by NSN• Process design Design Design Review 2 2 NSN Full e2e Global Process Model agreed with regions• R&R design Review 2 3 3 Agree details and develop detailed documentation Design 4 5 Agree on NSN Global Process Model changes and regional specifics after PilotCover tool 1 = milestone• Phase 1 Dev. /UAT = must be ready before pilot start• Phase 2 Development/UATWorkflow tool• Requirements WS 1• Phase 1 QMS/SLA report. Developm/UAT• Phase 2 Workflow/visibility/SLA report. Development/UATKPI& Reporting Design Development/UATPrepare Deployment• Global Pilot 1 Prepare Execute Review• Global Pilot 2 Conflict resolution Prepare Execute Review 4• Communication Plan Coordinate during development Coordinate during deployment• Prepare regional deployment High level plan Elaborate deployment planDeployment (each region) Business prep. Depl. Use Business prep. Depl. Use Ongoing transformationTransition milestones 1/2 1/5 1/11 Commenc. Wave 2 Commenc. Wave 3 Commenc. Wave 4 14 © Nokia Siemens Networks
  12. 12. A strong Service Management & Governancesetup is key to successfully steer the contract Right work, done right Validate and manage costs Performance Financial Management Management 1. Performance analysis 1. Invoice management. 2. Service delivery management 2. Performance credits, earnback, 3. Service Level management and critical milestones 4. Security management 3. Financial analysis & planning 5. Risk management 4. Contract pricing adjustments 6. Incident & problem management 5. Value assurance Logistics 6. Chargeback 7. User management SM&G 7. Gainshare management Satisfaction, direction setting Ensure contract compliance Relationship Contract Management Management 1. Governance 1. Contract compliance 2. Innovation governance 2. Contract change management 3. Regional liaison 3. Contract interpretation 4. Regulatory & tax compliance 4. Governance issue management 5. Forecasting and demand management & dispute resolution 6. Customer satisfaction survey 5. Service Provider audit management 6. Governance library 7. Communications management 7. Benchmarking15 © Nokia Siemens Networks
  13. 13. The SM&G global & regional organisation is nowin place and mobilised Libra Deliver Phase Logistics Logistics Logistics SM&G Transition Transformation Manager Governance Global Global Global Operations Finance Contract Manager Manager Manager Global Regional Service Management Key Support New role Order Mgmt Excellence Existing role Service Level monitoring 2nd level support Support role Regional Key User16 © Nokia Siemens Networks
  14. 14. Programme Libra’s objectives have been achievedby selecting a Provider that offered more than thestandard BPO solution Performance Financial Human Resources Relationship • Improve efficiency • Reduce labour • Smooth transfer of all • Implement a service through process cost by increasing in-scope employees level based quality harmonisation efficiency and by providing management • Organisation transferring staff to employment and system change for process external service career perspective • Innovation and improvements Provider • Ensure business flexibility are key • Leverage the • Reduce overall continuity and success factors expertise, toolsets operating cost, intimacy • Implementation of a and economies of and deliver • Develop skills of the highly efficient scale of external sustainable retained organisation Provider service Providers savings from Day management • Implement a robust 1 onwards organisation and flexible solution These objectives were used to review and evaluate options at each review stage in the programme – they were the guiding principles18 © Nokia Siemens Networks
  15. 15. In summary, our Critical Success Factors were: Without these Libra would not be as successful as it is today19 © Nokia Siemens Networks
  16. 16. Contact Friedrich.Loeer@tpi.net20 © Nokia Siemens Networks
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