NOKIA BATTERY RECALL LOGISTICS CASE NISHU GUPTA- 500051779 Nihal Ambasta- 500051158 Navin Sharma- 500051151 Kanika gupta- 500050502 Adithya ruthvik- 500051119 Contents: • • • • • • Introduction History Detail about the case Nokia challenge Solutions Conclusion Introduction: • In 2007, Nokia faced a media assault for exploding batteries of Nokias BL-5C model. • By 1st January, 2008, Nokia replaced 95% of BL-5C batteries. • 46 million defective BL-5C batteries recalled • August 14, 2007 – January 1, 2008 (Product Advisory) • The team was led by Sudeep Dhariwal, the logistics head of Nokia India. History in India: • Entered INDIAN market in 1995. • Market share in INDIA was 70% in 2004 and 76% in 2006. • Set-up of manufacturing plant in Chennai, year 2006. • R&D centers in Hyderbad, Bangalore and Mumbai. • More than 500 CCCs and 600 NPDs. • Organized itself in 4 regions- North (Delhi), West (Mumbai), South (Chennai) & East (Calcutta). Detail about the case • In 2006, very complex supply chain handled 900,000 mobile devices per day • 100 billion components • Since 1995, trying to create a demand-driven supply chain linking with the consumers and host of suppliers • In 2007, in a research Nokia ranked number one for the excellence in SCM. Battery Problem • According to comsumer complaints, Nokia discovered that BL-5C batteries were likely to swell during charging. • After some analysis, some batches of batteries produced by Matsushita were found defective because of overheating. • Then, Nokia management decided to issue a product advisory. Recall Strategy • Online check-in by keying the battery number from the web site of NOKIA • If the battery is affected it would be sent to customers’ address within 15 days Recall Strategy • SAP Problems, – The batteries were free. – 25 different states & different set of tax rules. – Lots of details required. – SAP system did not have a provision for a zero priced item. – All documents and invoices were done manually. – All this software obstacles were overcome by the management within the same day. Recall Strategy • DHL set up a makeshift packing and shipping facility. • 40 employees from DHL crew. • At least twice as many more workers needed. • A consultancy was taken, – 80 temporary workers were hired Recall Strategy • Another empty warehouse was rented and began three shift operation • Unpack cartoons each containing batteries • Each battery wrapped in a bubble sheet four times • Batteries were put in a DHL courier bag with «Not For Sale» sticker • The bar codes and courier bags were scanned • To avoid double delivery, each CCC also captured the number of batteries it replaced Recall Strategy • Nokia paid a flat rate to DHL. • Peak Business & Nokia offered DHL special incentives and DHL offer courier companies too. Solutions to the Crisis • • • • • Create additional team for logistics management Use SMS services for replacement procedure: Create an SMS service so that customers could send their battery number Make SMS service free of cost Send SMS in local languages If battery was defective ask customers to send their addresses Send batteries to Priority Dealers and Customer Care Centers to directly serve customers Start a Toll Free Number for helping customers Hire temporary workers to handle extra work load Solutions to the Crisis • • • • • (contd) Tie up with a courier company to deliver products directly to the customers Make a provision so that customer can return the defective product in the same package (to check if defective product exists and for safe disposal) Create a system to record outgoing and incoming batteries System should help avoid duplicate queries and also keep tab on batteries replaced Setup a deadline for replacement operations (about 4 months) Conclusions • Nokia was concerned about its customers. • It didn't wants to loose its goodwill in international market. • Thus replacement of batteries took placed as soon as complaint launched. THANK YOU!!!!!