QUESTION ONE CASE STUDY In 2001, the Philips Semi-Conductor factory in New Mexico, provided several types of radios frequency Chips used in mobile telephones. Major Customers were Nokia, Ericsson and other companies. On Friday, the 17th March, 2000, lightening hit the manufacturing plant and the water used to distinguish the fire destroyed all the stocks for the semi- conductors at the plant and the silicon raw materials used in the manufacturing of Semi- Conductors. This resulted into the plant shutting down for many months. Philips indicated publicly that the delay in fulfilling the orders would only be for a period of one week. However, Nokia noting that the orders could not be met on time and fearing the worst visited the plant in New Mexico to access the damage and noted that the damage was bigger that was reported. However, Philips did not allow the Engineers from Nokia to enter the plant. Nokia responded by changing the product design so they could use Chips from other suppliers and use other Philips manufacturing plants from China and Netherlands so that Nokia cell phones could continue to be manufactured. Ericssons response was not as decisive as Nokia, it took over a month for their management to react to this problem and five weeks after the fire, Ericsson realized the severity of the situation. By that time the alternative supply of Chips was taken up by Nokia. This caused potentially 1.7 billion dollars loss and made the Ericsson cell phone Division in 2000 to be forced to close and exited the cell phone Market all together. Requirements: A. As a supply chain consultant what advice would you offer to both Nokia and Ericsson in handling the Risk Management Process in avoiding the extreme impact that these two companies experienced in the advent of this accident; articulating clearly what can be done in managing different Risks in International / Global Supply Chains. [20 Marks] B. This situation was made worse by the seemingly bad inventory policies that both companies exhibited to lessen the impact of this accident. What advice and recommendations would you give to both companies in managing uncertainty in the supply chain and it relates to Inventory policies. [10 Marks] [TOTAL: 30 MARKS]