One of the cornerstones of the extensive restructuring program being put in place to rectify the unsatisfactory earnings performance of GN Netcom’s Mobile Headsets business is to establish a demand-driven supply chain. The new supply chain is now in a stabilizing phase and the initial feedback is positive.

Under the new supply chain setup, it will take a maximum of two weeks from the time customers, such as big retail chains or telecoms operators, place an order until they receive the fully configured headsets.

“By clearing out all finished goods from our supply chain, we are able to release huge amounts of capital tied up in inventories. That way, we can also reduce the risk of manufacturing too many products that might later have to be written off causing a loss to GN Netcom. The new setup has also simplified my organization and, today, we are only half as many employees in our supply chain as before,” says Jens Arvad Johansen, VP Global Logistics, who is in charge of implementing the new supply chain.

The supply chain explained

As soon as an order for a number of Jabra headsets comes in, GN Netcom notifies the sub-contractors, most of whom are Chinese, who immediately start configuring the products to the customer’s specifications. After configuration, the headsets are shipped to a global cross-docking center in Hong Kong, and from here they are shipped direct to customers in the various regions.

When an order is for OEM products, for example from a mobile phone manufacturer wanting private label products, the headsets are shipped direct from GN Netcom’s sub-contractors to each OEM customer’s specific distribution center.

“Thanks to this new way of running our supply chain, we are able to lower our costs considerably, reduce lead times and generally make our business procedures much simpler. We’re now in the stabilizing phase and I look forward to getting the new supply chain running at full speed in the spring,” says Anne Raaen Rasmussen, head of GN Netcom’s Mobile business.
 
Over the past few months, GN Netcom has taken a number of steps to simplify the Mobile business. For example, the number of customers has been reduced from about 700 and Mobile now concentrates on the 100 or so largest customers that generate the vast majority of revenue. Also, the mobile headsets produced are based on very few platforms, and that makes it easy and simple to manufacture headsets, because the sub-contractors do not have to manufacture new components every time.