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Integrated logistics7

Integrated Logistics

Course Title:

1.0 Introduction

Integrated logistics aims at anticipating customer needs and wants in a service oriented process by utilizing certain networks to fulfil them in a timely manner. This is achieved through acquisition of materials, capital, people, necessary information and technologies (Younis, 2009). Logistics can be inbound by having internal focus or it can have external focus. Moreover, logistics can be conducted within the organisation itself or it can be outsourced to a third or fourth party. This paper examines the logistics of the flow of products/ materials in an organisation the author is familiar with by looking at how stock of finished goods or raw material flows are organised, managed, stored, transported and controlled.

2.0 The organisation

Nokia has its roots from a paper mill located at the banks of Nokianvirta River in South-Western Finland 1865. The company grew in the first century up until 1967 to become an industrial force to reckon with. However Nokia did not make it this far on its own. The company formed partnerships with a cable company and firm dealing in rubber to explore the electronics industry (Nokia, 2009). The story of Nokia began in the year 1865 when Idestam established his paper mill. In 1898, Eduard Polon founded the rubber firm, Finish Rubber Works which would become Nokia’s business dealing in rubber products. Fourteen years later Finish Cable Works was founded by Arvid Wickstrom effectively laying down the foundation for Nokia’s business in electronics and cables. In 1967 the three distinct businesses merged to give birth to the Nokia Corporation (Nokia, 2009).

Between the year 1968 and 1991 the newly created Nokia Corporation pioneered the mobile communication industry in the world. Some of the early iconic telecommunication products included; the radio telephone, Nordic Mobile Telephone (NMT), the digital telephone switch, the GSM call in 1991 which marked the beginning of the global mobile revolution (Nokia, 2009). The most important strategy by Nokia was in 1992 when the company switched to the telecommunication industry and would become the global leader in telecommunications. This was promoted by the adoption of the GSM by the industry. During the global revolution on mobile telecommunication Nokia launched various groundbreaking telecommunication products among them; the first GSM handset, satellite call and the first WAP handset in 1999 which took internet to mobile (Nokia, 2009).

Since the year 2000 to date, Nokia’s telecommunication products are impeccably amazing. Nokia’s technological advancements continue with the 3G, multimedia communication devices, multiplayer gaming on mobile and many more. Some of the most current telecommunication products by Nokia include the 3G mobile phones, the N-Gage for mobile gaming and the launching of the N-series mobile phones. It is the year 2006 when Nokia sold its Billionth mobile phone and realized a subscriber base of above two billion. In the same year, Nokia announced a potential merger in its networks with competitor Siemens (Nokia Siemens Networks, 2008). In the year 2007, Nokia becomes the 5th most valued brand around the world, launches the new ovi internet services and starts operating the Nokia-Siemens networks (Nokia, 2009).

3.0 Areas of Logistics in the Organisation and their Impacts on Goods/ Material Flow

3.1 Customer Accommodation/ Customer Service Management

Customer accommodation is a concept that addresses customer-focused marketing, customer service, customer satisfaction and customer success so as to meet diverse needs of customers. Customer accommodation must seek to overcome discrepancies like time, space and quantity assortment. To eliminate these discrepancies a firm has to put mechanism of ensuring spatial convenience, policy on lot size, waiting time policy and product variety and assortment. Customer service addresses functions like operational performance, availability and service reliability. This in turn guarantees customer that products will be availed at right amount, right time, at right price, at right place, at right condition with right price.

Nokia Corporation achieves core customer service from the way their business strategies and value chains are configured. The first factor is that the strategy enables the company to manufacture and distribute the best mobile devices regardless of the prices of the mobile device and the geographical location in which it is sold (Younis, 2009, p.2). Nokia’s strategy includes creating winning mobile devices, embracing consumer internet services, delivering highest quality enterprise solutions, building scale in networks and expanding professional services. Nokia’s strategic assets include the brand and design of its mobile devices, consumer engagement and fulfillment, as well as technology (Sairanen, 2006, p.7). Therefore, Nokia has embarked on the creation of value with mobile solutions. Nokia Corporation seeks to be a truly consumer-oriented company in order to address the divergent needs of their consumers (Nokia, 2009).

3.2 Purchasing/ Procurement

One key area of cost cutting measures is by concentrating on core functions of the firm. This can only be achieved by efficiently integrating suppliers, manufacturers, warehouses, and stores so that merchandise is produced and distributed at the right quantities to the right location and at the right time (Simchi-Levi, Kaminsky and Simchi-Levi, 2004, p. 2). Supply chain management extends the concept of partnership into a multiform effort to manage the total flow of goods from the supplier to the ultimate customer (Cousins, Lawson and Squire, 2006, p. 757). Thus, each firm in the supply chain directly and indirectly affects the performance of all other supply chain members, as well as ultimate, overall channel performance (Mentzer, 2001, p. 9).

In trying to be strategic, the company aligns its procurement and purchasing needs with the firm’s vision. In the earlier years, Nokia contracted single suppliers for various components and raw materials. However, according to Supply Chain News Bites (2007), this has recently changed with the company shifting to dual suppliers so as to reduce risk, costs and increase innovation. Moreover, Nokia adheres to best practices while sourcing for suppliers.

3.3 Logistic Network Integration

According to IBM Global Business Service (2006, p. 3), Nokia has a complex supply chain that handle 100 billion components, 60 strategic suppliers and 10 factories word wide. In order to support this complex chain, they think globally and act locally. This means they do localized decision making with global planning perspective. From 1995, Nokia inventory with information and adopted a pull drive supply chain with end-to-end integration linking suppliers, factories, telecom operators, channel partners, contract manufacturer, banks, sale, iHubs and logistics service provider to the consumer (IBM Global Business Service, 2006, p. 4). Apart from the above, Nokia reviews its purchasing structure every year. In 2003, they dismantled the company’s global category buying structure for indirect spend. This made them set up local group for each of its four global groups (The Chartered Institute of Purchasing & supply, 2006, p. 1).

Personal Opinion on How Company Logistics Should Be Carried Out

The concept of logistic management is tied on the premise of improving performance across the entire industrial logistics network (Hieber, 2002, p. 1). In a simple overview, supply chain relates to a network of facilities and distribution option. These networks perform the functions of procurement of materials, value addition, and distribution of these finished products to clients. Presently, in terms of logistics, the company has tried to be at par with best practices. However, one area that the company should invest in is sustainable procurement. The firm should only engage sustainable suppliers who are environmentally conscious. This will act as new approach to corporate social responsibility.

5.0 Conclusion

Flow/ movement of raw materials and resources from the source to the manufacturing firm (procurement logistics/ supply chain management) is an important function for the operation of firms. Moreover, flow of products from the manufacturer or intermediate supplier to the final consumer (distribution logistics) is an integral part of any business. In addition, other process like production, after sale and disposal logics are equally integral and critical. With the realization of the strategic importance this process holds, businesses engage in managing it so as to achieve efficiency by integrating information, transportation, inventory, warehousing, material handling, packaging and security.


Nokia Siemens Networks. 2008. Good Green Business Sense. Retrieved, April 26, 2012 from:

Mentzer, J. T. 2001. Supply chain management. Thousand Oaks, California: Sage publication Inc.

Simchi-Levi, D., Kaminsky, P. and Simchi-Levi, E. 2004. Managing the supply chain: the definitive guide for business professional. New York: McGraw-Hill

Cousins, P. D., Lawson, B. and Squire, B. 2006. Supply chain management theory and practice: the emergence of an academic discipline. International journal of operations and production management. Volume 26 Number 7, ISSN 0144-3577

Supply Chain News Bites. 2007. Nokia decides dual sourcing is the right strategy. Retrieved, April 26, 2012 from: 1.php?cid=1178

The Chartered Institute of Purchasing & supply. 2006. Going through changes. Retrieved, April 26, 2012 from: 20Man agement%20in%20the%20purchasing%20function/Going%20through%20changes.pdf

IBM Global Business Service. 2006. Supply chain transformation is becoming a critical element for driving business results. Retrieved, April 26, 2012 from: http://www- scm_executive_summit_2006_insights.pdf

Hieber, R. Supply chain management: a collaborative performance measurement approach. Zurich: vdf Hoschschulverlag AG

Nokia. 2009. Nokia’s Vision of the Future. Retrieved, April 26, 2012.

Sairanen, J. 2006. Nokia Strategy. Retrieved, April 26, 2012 from: Briefing/Jarkko_Sairanen_03-10-2006_FINAL.pdf.

Younis, K.M. 2009. Nokia: Business Strategy. Retrieved, April 26, 2012 from: