Network Node

Nokia Network has opened a Dubai hub to support its growing regional business.

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By  Neil Denslow Published  October 8, 2005

|~|Pajala, Anssi-NOKIA-NETWORK_m.jpg|~|Anssi Pajala, manager, Dubai hub, Nokia Networks|~|The speculator growth in the region’s use of mobile phones, coupled with the deregulation of the local telco market, is driving up demand for telecommunications infrastructure. To better service this demand, Nokia has opened a 12,000 m2 distribution centre in the Jebel Ali free zone, which will support its customers in the Middle East, India, Pakistan and parts of Africa. The Danzas-run facility, which is Nokia’s sixth distribution hub around the world, will help the company grow its regional business by cutting both its transportation costs and its lead times. “The business in this region, the Middle East and the Indian Subcontinent, has been growing and it is still growing at a very rapid pace,” comments Anssi Pajala, manager, Dubai hub, Nokia Networks. “From both a customer service perspective and from a cost management point of view, we therefore realised that it would be beneficial to have some kind of operation in this region.” The Nokia DC holds a range of telecommunications equipment, including base stations, ground stations, cables and cabinets. Previously, the company supplied this equipment into the local market from hubs in other parts of the world, but this was proving to be a complex and inefficient arrangement. “We did not have a distribution centre here, so we were utilising the other centres… based on specific estimations of what would be the most beneficial distribution,” explains Pajala. However, the growth of the local market meant that early last year, Nokia decided that it needed to open a hub within the region. The company first looked for a site in India, but it was soon swayed by Jebel Ali’s offering in Dubai instead. “Initially, we were looking for a distribution centre in the Subcontinent to serve that market, but when we saw the excellent facilities at Dubai’s Jebel Ali free zone and its convenient location adjacent to what are also major markets for us in the Middle East and Africa, we chose that instead,” says Dr. Walid Moneimne, senior vice president, EMEA, networks, Nokia. “Dubai is an excellent location, and the investment environment and the positivity from the authorities here for setting up operations made it very easy to have a solution in place very quickly,” Pajala adds. “We had other options, but fairly quickly, we made the decision to go to Jebel Ali,” he continues. The company had already decided to outsource the running of its Dubai hub, although some of its other hubs are run inhouse, in order to relieve management from this task. It was also advantageous in terms of getting land in the crowded free zone. “Space was one of the issues we needed to consider when we started the project,” says Pajala. “I understand the situation currently [in Jebel Ali] is that business is very rapidly growing and it is very hectic here, so space might be an issue. However, for [a brand like] Nokia… and when a logistics service provider is involved… we got a lot of interest from [Jafza].”||**|||~||~||~|To select its 3PL partner, the company issued a tender that got a strong response from service providers. “We had a lot of interest,” says Pajala. “It certainly attracted a lot attention from the service providers, and they were very willing to work on providing solutions for us.” Danzas eventually won the contract in the autumn based on a range of factors, including service level estimations and pricing. It was also able to offer an existing facility within the free zone, although this building needed some renovations before Nokia gradually began moving in from January. “It is basically an old building, but when we started the project, one part of it was just a hole in the ground,” says Palaja. “However, by the time we went live, everything was set and ready, which just shows that, if needed, even infrastructure can be put in place fairly fast here.” Goods arrive at the Dubai hub from a number of points around the world, although predominately Europe and Asia. The suppliers are both Nokia facilities and also external manufacturers, which produce a large proportion of the goods in the hub. In the main, the forwarding and transportation is usually arranged by the supplier, with most of the goods arriving in Dubai by sea. “Where it is feasible we utilise sea transportation,” says Palaja. “It is basically calculated on the whole cost set-up, and, of course, transportation is not the only cost occurred…. Inventory carrying, for instance, is one big cost if you have valuable equipment,” he adds. When the goods arrive at the hub, they are received and put away by Danzas staff. However, the 3PL uses Nokia’s global back end ERP system, which is SAP R3, to manage this process and the inventory in the warehouse, rather than its own applications. This single system approach greatly improves the flow of information between Nokia and the Danzas-run facility. “Nokia has direct visibility on all of the operations, but it is done by the Danzas people,” says Palaja. “And, because SAP is providing all of the [sales and ordering] data, this is also coming through the system, which gives Danzas full visibility of their workload,” he continues. “This is one of the beauties of the Nokia system.” Since the hub went fully live over the summer, it has meet all of Nokia’s expectations, most notably reducing lead times. While previously the company would have to service customers from other parts of the world, which was both expensive and slow, it is now able to turnaround orders in just a few days if needed. “The idea of this system is that the lead times are short,” says Palaja. “We have the stock available… so it is just a matter of handling the order, doing the forwarding activities and booking the transportation. It can be done in a fairly short time, just a few days…. Not all of the customers request that, but that is what we can do with the processes in place,” he adds.||**||

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