Nokia’s Supply Chain Management

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The modern business environment is characterized by the increased complexity because of the tendency towards the globalization and rise of international corporations. Multinational brands enter various regions to generate a competitive advantage and ensure an increased number of clients. Moreover, modern strategies might presuppose placing facilities and production assets in areas with beneficial conditions with access to demanded resources.

The given patterns contribute to the sophistication of the organizations’ structure as they have to align cooperation across the globe and engage in a productive partnership. Under these conditions, the effectiveness of supply chain management acquires the top priority as the central way to guarantee the stable functioning of organizations and their ability to compete with rivals. The presented project is devoted to the in-depth analysis of Nokia’s supply chain as an example of technologies’ integration, optimization, sustainability management leading to the generation of advantage and successful development.


Nokia Corporation, or Nokia, is a Finnish multinational corporation founded in 1865. Since its foundation, it has operated in various spheres attempting to generate revenue and continue its evolution. In the 1990s, the brand decided to focus on telecommunications infrastructure, technology development and foster further innovation and creativity in the sector. The given strategic change transformed the company into one of the leading actors in mobile telephony.

Today, it cultivates GSM, 3G, LTE, 4G, 5G standards and the emergence of numerous innovative solutions in the sphere. The company’s report outlines that Nokia employs about 103,000 people in more than 100 countries and has its facilities in more than 130 states (Nokia, 2021). It reports annual revenues of around $24 billion and enjoys beneficial conditions for further growth (Nokia, 2021). The scope of the company, its size, and its focus on various technologies mean that Nokia’s stable functioning depends on the aligned cooperation with multiple partners and suppliers. Under these conditions, supply chain management becomes the critically important sphere vital for the further rise of the brand.


Nokia’s attention to supply chain management comes from its extremely high capacity and the existence of numerous partners. At the moment, it has to process about 100 billion components needed to ensure the stable functioning of assembly lines and consider 60 strategic suppliers and partners (Nokia, 2021). Additionally, Nokia has ten plants globally, meaning that they should also be managed to avoid delays in supplies and guarantee the high quality of final products. Under these conditions, the company uses the supply-chain management model (SCM), presupposing replacing inventory with information, innovativeness, and creation of a pull-driven framework with the sable links with suppliers and production plants, distribution partners, providers, and consumers (Nokia, 2021). At the same time, it values long-term relations with major stakeholders, which improves the SCM and invest in the further development of the partnership.


The manufacturing network of Nokia has several unique peculiarities that should be mentioned. It consists of the company’s manufacturing sites and multiple Electronics Manufacturing Services partners (Nokia, 2021). The management of these units is performed by well-thought-out activities and planning. The manufacturing network is geographically distributed and is characterized by a high level of flexibility. The given two features are the major characteristics of the supply chain as they ensure that the changes in the structure under the impact of external factors, for instance, Covid-19, will not precondition the critical alterations in the outcomes and trigger the further worsening of the situation.

The structure also presupposes the consideration of local peculiarities and their impact on various processes, such as shipment, manufacturing, and supply (Nokia, 2021). In such a way, the structure meets the current demands of the brand and its focus on the further rise.


Nokia’s manufacturing network consists of our own manufacturing sites and numerous Electronics Manufacturing Services partners. Such distribution and flexible manufacturing networks provide the responsiveness needed to meet the clients’ demands, especially during hard times, demonstrated during the COVID-19 pandemic (Nokia, 2021). The manufacturing sites of the brand include wholly-owned subsidiaries such as Radio Frequency Systems and Alcatel Submarine Networks (Nokia, 2021).

In 2020, Nokia had 11 manufacturing facilities in different parts of the globe, guaranteeing that a company could accept a wide variety of strategic decisions and adapt to new conditions (Nokia, 2021). Controls and procedures are performed by managerial decisions resting on reports and information from the major units (Nokia, 2021). In such a way, the company benefits from the developed supply chain.

Another vital part of the strategy is the focus on prolonged cooperation with partners. Nokia’s supply chain is characterized by strong bonds with the major suppliers, which have been cultivated for several decades (Nokia, 2021). Observation of the given strategy improves management as the strategic decisions can be discussed with potential partners and negotiated to find the most appropriate decision (Chopra, 2018).

Moreover, the focus on long-term cooperation helps to plan future interactions regarding existing problems with the major goal of eliminating them (Nokia, 2021). It contributes to the generation of competitive advantage and close cooperation to resolve the essential issues. Adopting a hybrid supply chain system, Nokia can support the functioning of its supply chain and guarantee that there will be no failures in different stages of manufacturing or delivery (Nokia, 2021). It also helps to respond to emerging threats in a fast and effective manner.

Finally, Nokia is one of the leaders of innovative and sustainable technologies. For this reason, its supply chain management strategy presupposes shifting to more creative and new technologies, such as using robots, AI, 5G network, and digital warehouses, automatized, and cultivation of sustainable practices, including waste reduction, pollution control, and cooperation with communities (Nokia, 2021). This task is considered one of the brand’s main priorities at the moment, as the integration of technologies and devices helps to boost performance and enhance supply chain management. Moreover, sustainable practices are needed to increase the brand value and its reputation among local populations. At the same time, it creates the basis for future improvements in the sphere of supply chain management.

Global Sourcing

Nokia also views its supply chain as a vital part of its business and reputation. For this reason, it proclaims that regardless of the complexity and depth of the model, the company tries to ensure that it remains transparent and follows the major ethical, social, and environmental demands to the work of a global corporation that exists today (Responsible sourcing, no date). For this reason, responsible sourcing is the top priority for Nokia. The organization wants all partners to adhere to the Third Party Code of Conduct, follow Supplier Requirements, also presupposing the Responsible Business Alliance Code of Conduct and specific demands created by Nokia (Nokia, 2021). In 2019, the brand had around 14000 suppliers falling into the three major categories:

  1. Hardware suppliers producing materials for products.
  2. Services suppliers responsible for network planning and supply.
  3. Indirect suppliers (Responsible sourcing, no date).

Manufacturing suppliers of Nokia are located in Asia, while services suppliers are distributed globally and can be found in Brazil, Romania, China, Hungary, Italy, Mexico, Thailand, USA, and Vietnam (Responsible sourcing, no date). For this reason, the brand devotes much attention to sourcing and has a code of conduct needed to align cooperation with the major partners:

Nokia Code of Conduct
Figure 1. Nokia Code of Conduct (Responsible sourcing, no date).

As shown in Figure 1, Nokia focuses on supplier qualification, selection and contracting, and management. It means that brands failing to meet the corporation’s high demands for quality, labor conditions, or impact on employees cannot become Nokia’s partners. Furthermore, the brand focuses on potential risks associated with mining, extraction, and trade of metals (Responsible sourcing, no date). Being a key component for electronic components, they also might presuppose multiple risks such as environmental damage, military conflicts, and human rights violation (Responsible sourcing, no date). Under these conditions, Nokia follows the responsible and sustainable global resourcing model with the primary goal to ensure that it remains a brand with a high reputation and improves the lives of communities it affects.


The extended and sophisticated supply chain also presupposes the existence of several risks that should be considered when planning operations and processes vital for the stable work of the company. Thus, Nokia has a systematic and structured approach to risk management, presupposing identification of threats peculiar to its business operations, their analysis, and monitoring to avoid critical failures (Nokia, 2021). The brand outlines major sustainability-related risks, such as production issues with safety, environmental accidents, health, policy, cybersecurity threats, human rights abuse, misuse of technology, and poor labor conditions observed at any stage of the supply chain (Nokia, 2021). A detailed list of all risks that might affect the company’s work shows that much attention is devoted to considering these factors.

Moreover, viewing risks as an integral part of the business environment, Nokia introduces innovative and sustainable tools to manage them effectively. It includes technologies and innovative practices, such as enhanced data collection and analysis by using AI to provide forecasts about a certain situation and conclude whether an intervention is needed (Nokia, 2021). Furthermore, Nokia helps its partners to avoid risks related to labor unrest, strikes, or poor motivation among workers by offering sustainable frameworks for managing people and involving them in creative activities to guarantee their engagement (Nokia, 2021). In such a way, risk management remains a top concern for the corporation and helps it to be competitive.

Evidence-Based Decisions

Nokia’s approach to supply chain management and decisions made by the company demonstrate the brand’s correct use of current trends and peculiarities of the market. Thus, the increased attention to sustainability, which is one of the company’s main goals, contributes to better cooperation with partners and enhanced performance. Moreover, it helps to rest on local community resources and manage them better.

Innovation and sustainability can be viewed as the two central forces helping modern companies to evolve. Under these conditions, Nokia’s attempt to promote such practices across the globe has multiple effects on the company itself and other partners. Using the Supply Chain Operations Reference model (SCOR), the brand manages to address, improve, and communicate its work by applying the recent research data and findings. It helps to create the basis for its further growth in terms of a highly competitive market.

Supply Chain Improvement


The extensive use of technologies is viewed as the key to improvement. For instance, Nokia promotes warehouse digitalization as the part of its supply chain management. Innovations make all processes cheaper and more effective (Franciss, 2018). LTE and 5G campus technology enhance cooperation within warehouses, while automated robots minimize mistakes rate (Franciss, 2018). Nokia improves transportation practices by using assisted driving models and routes selected by the system (Supply chain and logistics, no date). Indoor tracking is linked to AI in terms of the SCOR model to avoid wrong deliveries and delays (Franciss, 2018). The traffic is also controlled by AI and robots as the method to optimize the major tasks related to the sphere and reduce collisions, problems, and wrong deliveries (Franciss, 2018).

In such a way, the company implements real-time optimization of operations by using Artificial Intelligence (AI) to attain improved outcomes (Supply chain and logistics, no date). Moreover, Nokia views it as the way to create a new ecosystem combining the SCOR model and innovative solutions to boost performance and attain better results.


As it has already been stated, Nokia views sustainability as its leading priority. For this reason, the brand tries to affect the environment and people by improving their lives with the help of technology. The sustainable framework employed by the company presupposes that all suppliers and partners are aware of central sustainability issues and improve local communities (Nokia, 2019). Moreover, diversity and inclusion are the main determinants of the brand’s work.

The existing approach presupposes constant audits of existing supply chains to enhance quality and sustainability. In such a way, its supply chain program makes the major stakeholders consider their impact on climate, environment, and people to avoid deterioration of the situation (Nokia, 2019). Applying the sustainable value framework, it is possible to conclude that the company focuses on external and internal drivers and invest in the future by using clean technologies and helping people (Hart and Milstein, 2003). The majority of current decisions made by Nokia are viewed as an example of how the modern company should cooperate with communities to guarantee that local resources are used appropriately.

Sustainability Framework
Figure 2. Sustainability Framework (Hart and Milstein, 2003).


Analyzing the supply chain created by Nokia, it is vital to admit Nokia’s desire to engage in long-term cooperation with its partners and influence them differently. First, as stated previously, the brand is known for a long history of its relations with multiple suppliers. Second, at the moment, it has a continuously growing number of partners from various states. Finally, the organization has its own code of conduct for potential cooperators, which is viewed as the guideline for future interactions and enhanced collaboration (Nokia, 2021).

Under these conditions, cooperation can be seen as a central element of supply chain management necessary for its gradual improvement. Nokia works with its stakeholders in ways that also alter their work, for this reason, they create an environment characterized by a high level of innovativeness and adherence to sustainability principles.

Global Impact

Most of the decisions made by Nokia in terms of its supply chain management also have a significant impact on the global interactions and business world. Being a multinational company, Nokia has multiple suppliers in different countries. For this reason, its attempts to implement innovations and create a sustainable framework influence stakeholders and precondition the positive change within these organizations. The strict demands for responsible sourcing, behavior, and observation of codes of ethics and human rights contribute to the improvement of local conditions (Nokia, 2021).

Moreover, the shift of priorities towards innovations and environmentally friendly practices made by Nokia shows that it is possible to be a prosperous corporation that supports green incentives and technologies. This inspirational example drives other corporations towards the creation of new paradigms and improved cooperation with their partners. In such a way, it is possible to assume that Nokia’s model is vital for changing the global intercourse and guaranteeing the gradual improvement in people’s lives.


Altogether, Nokia has a specific approach to supply chain management. Being a giant multinational company with manufacturing facilities and suppliers located in different parts of the globe, the brand has a structured approach to working with partners. First, it emphasizes the need for responsible sourcing, which is fundamental for a sustainable future. Second, it relies on innovations as a key for new achievements, costs reduction, and higher revenues. Third, Nokia wants its partners to follow the regulations and demands introduced by the brand to ensure no violations of human rights and local communities benefit from the cooperation (Nokia, 2021). In such a way, it creates the basis for future achievement and helps other companies to join the existing sustainability framework.

Reference List

Chopra, S. (2018). Supply chain management: strategy, planning, and operation. 7th edn. New York: Pearson.

Franciss, A. (2018). An intelligent supply chain for a connected world. Web.

Hart, S. and Milstein, M. (2003). ‘Creating sustainable value’, Academy of Management Executive, 17(2), pp. 56-69. Web.

Nokia (2019) People & planet report. Web.

Nokia (2021) Nokia annual report on form 20-F 2020. Web.

Responsible sourcing (no date). Web.

Supply chain and logistics (no date). Web.

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