To develop a system for maintaining optimum level of inventories of locally procured components subject to varying demand

Abstract

Nokia is one of the largest mobile phone manufacturers in the world. The company manufactures handsets in 2 categories: mobile phones and smart devices. There are 4 factories for mobile phones and 4 factories for smart devices worldwide. In Nokia's classification, smart devices are handsets whose operating system can be upgraded and whose retail costs are typically greater than $200. This present study deals with the Chennai plant of Nokia which manufactures only mobile phones. The phones are also differentiated platform wise; there are a total of 4 platform types made in this factory. The Nokia SEZ in Sriperumbudur (near Chennai) was established in 2005 to meet the growing demands of its phones in India. Set up in a 200 acre plot the SEZ houses not only the main mobile manufacturing lines but also 5 captive suppliers (3 for mechanics, 1 for LCD and 1 for chargers). The SEZ Park employs a total of 30,000 workers (10,000 for Nokia). The plant also has another key supplier within 9 kms outside of this SEZ. The factory is basically an assembly unit where components - printed wire boards, electronics, LCD screens, plastic covers are all put together, packaged and then shipped. The plant presently manufactures 15 – 16 million mobile phones per month and most of them are below Rs 6000 range. A majority of orders are India specific (considering cheaper phones are sold mainly in developing countries) and the exports are typically to Africa and Europe. The capacity of the factory is approximately 200 million units a year, however it is generally quoted within a range of 150 – 200 million as the number of phones made depend on the complexity of the model The CCS project requires a design of a system to maintain optimal inventory level for locally procured components which are subject to varying demand at Nokia's Chennai factory. Our work till the mid-term has involved the study of the manufacturing process and production flow, demand monitoring and understanding Nokia's requirement(s).