Elcoteq is able to assert itself in a global network made of 15 countries and in three time zones by well directed communication and successful combination of local and global circumstances. 

By Cornelia Villani

“Agility is of high importance in the electronics industry,” Hannu Hautala the Vice President of Elcoteq System Solutions says. “Products are often developed further every half a year. That’s why it is important for us to reduce our stock as much as possible in order to react quickly to market fluctuations without excess material.” Elcoteq has therefore nit a tight net of communication with its globally spread customers.  “We are proud to look back on 25 years of experience in the field,“ Hautala says.

Elcoteq is listed on the Nasdaq OMX Helsinki and employs some 13 000 people on four continents. Net Sales in 2008 were 3.44 billion Euro.

“Elcoteq is always operating where the markets of our customers are,“  Mr. Hautala points out. Further criteria for choosing locations are labor costs, small distances to the customers and the education level of workers. Complex communications systems are being manufactured: “We are supplying the whole portfolio, from PCBA manufacturing to mechanical assembly and software uploading all the way to final testing, packaging and delivering.“ Elcoteq’s service-offering additionally consists of sourcing, engineering services and logistics.

Hautala pictures Elcoteq’s ways of working in global markets by showing two example cases of sourcing localizations: cost and complexity diminishing concepts were applied together with two big customers, one from China and one from Europe, which brought them “closer to their customers and to first class suppliers“. Stocks were cut in half and several weeks of lead time were saved, which benefited the cost calculations and the environment in addition to bringing higher flexibility. 

Implementation of global strategies is being carried out on a professional level. “We have global development units, which work in tight cooperation with each other,“ Hautala explains. They receive their input from our offices and plants. In addition Elcoteq’s supply chain experts make sure that customer’s needs are being met. “We have certain milestones that have to be reached, when a new project is being ramped up. By these means individual management can be build up systematically step by step. Part of the supporting strategy is also, that the processes are separated in three times zones, but developed in consistent ways. This way, products and production can be quickly globally transferred without surprises.“

In order to reach these common goals with customers we have to make sure to communicate well, so that the specialists on both sides are able to cooperate. Hautala points out that the implementation of a truly global supply chain or a network like that of Elcoteq is very complex and needs time to be build up“.