Nokia Mobile Phones Performance management in global

1 © NOKIA SEUGI2003.PPT / MOj

Nokia Mobile PhonesPerformance management

in global operations with SAS ABM solutions

Mika OjalaBusiness Analyst

Manufacturing Solutions


Nokia Mobile Phones - company at the glance

� World's largest manufacturer of mobile phones since 1998� total sales volume (2002) 152M units� total sales 2002 was over 23 billion euro� total employees is 26 000 from which over 40% works in R&D activities� operations world wide - all three continents� produce all known mobile technologies

(e.g. GSM, CDMA,WCDMA, TDMA, AMPS..)� divided into nine different business units


Nokia Mobile Phones Worldwide

Production sitesProduct creation sitesSales offices

Americas Europe Asia-Pacific

� Balanced global presence� Products sold in more than 130 markets


Nokia Mobile Phones � business process overview

� NMP divided into three major processes - Product creation, Product delivery and Management

� NMP operations act mainly in product delivery � also tighly integrated product creation thru CE process

� operations & logistics� ABM utilized mainly in Product delivery processes

� in Product delivery processes ABM usage cover inbound logistic, production, outbound logistics activities globally


Nokia Mobile Phones � ABC/ABM solutions usage

� since 1996, mainly business driven� first in Mobile Phones and case based ABM studies� first global managed project team est�d 1996/1997 (NMP)� Due to NMP�s good delivery processes similarity & lean

organization levels ABM projects deployment were smooth� At the beginning models activity structure re-engineering were

done constantly during projects deployments� Modelling target -> minimize local tasks accurancy, focus on

regional / global processes� Main data source global SAP R3 and other operations common

used data sources� Models updated mainly periodically� Decision making based on quarter level data


Nokia Mobile Phones � ABM demand in operations

� Proactive productivity improvement:Process costing ABM tools support tracking of bottleneck process costsfrom several dimensions like idenfying NVA or quality related processes which increase demand fulfillment costs and decrease product profits

� Input data from process cost to Product Creation:ABM gives real picture from current processes & costs � i.e. this support R&D to make better scenarios concerning product's demand based fulfillment lifecycle costs and analyze new consept consequences

� Support continues planning:For planning ABM support smooth and flexible planning including setting of process cost targets. This provides real process based costmanagement.

� Make-or-buy related analyses:Process cost understanding is essential for cost comparision (i.e. outsourcing supplier's process vs. Nokia subprocesses) in order to achieve optimized costing solutions

� Channel/customer profitability analyses:ABM support cost tracking thru the whole Demand Fulfillment chain - this help to track potential cost savings in any part of DF processper product or/and per customer in delivery chain


Nokia Mobile Phones � SAS ABM system solution

� Oros 5.5 / SAS ABM solution used/installed as server/client solution� system setup located citrix metaframe server environment - there for SAS ABM

client usage is thin & fast globally� Oracle 9.2 used for ABC/M basic data gathering & driver data storage & automated

procedures. Also couple excel files used for data gathering (NOT permanent solution)

� two extra taylor made SAS ABM/oros automation based applications(data gathering/reporting)

� one global scenario building tool for r&d CE programs� cognos enterprise web solution used for actuals reporting globally


Nokia Mobile Phones � ABM models key facts

� nine models� plant activity amount less than 40, in global scope

possible to consolidate and thus less than 60� five resource drivers per plant and also in global scope� ten activity drivers per plant and 11 in global scope� all costs allocated to product family levels� used, unused, flexible costs available for all cost objects� �ABM user network�:

- all OLS business controllers & operations� management- operations & logistics project managers in BU(s) CE programs- plants� six sigma teams


Nokia Mobile Phones � SAS ABM tool conclusions

� good and easy to use tool for ABC/BOC/BOM cost allocations� excellent tool also for planning process costs if organization

management is process driven & good support for scorecard� long experience in ABM methodology applying� good possiblities to integrate/automate almost with any ERP

or/and ETL solutions� large support thru good partners� more research needed in scenario building possibilities� systematical training schedules needed � SAS ABM/oros database solution ?� SAS ABM/oros reporting application is not the level of this

type SW

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Nokia Mobile Phones Performance management in global