Nike supply chain management system. Supply chain management process at nike 2022-10-20
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Nike is a leading global brand in the athletic footwear and apparel industry. Its success is largely due to its efficient and effective supply chain management system.
The Nike supply chain begins with the procurement of raw materials such as leather, rubber, and textiles. Nike has a team of sourcing professionals who are responsible for finding the best suppliers for these materials, taking into consideration factors such as cost, quality, and sustainability. Nike also has strict guidelines in place to ensure that its suppliers adhere to ethical and environmental standards.
Once the raw materials are procured, they are sent to Nike's manufacturing partners, who are responsible for producing the finished products. Nike has a network of over 750 factories in more than 50 countries, and it works closely with these factories to ensure that they are meeting Nike's high standards for quality and efficiency.
After the products are manufactured, they are shipped to Nike's distribution centers, where they are stored until they are ready to be shipped to retailers. Nike has distribution centers located in strategic locations around the world, which helps to reduce lead times and minimize transportation costs.
The final step in the Nike supply chain is the distribution of the products to retailers. Nike uses a variety of distribution channels, including its own stores, third-party retailers, and e-commerce platforms. Nike also has a team of sales and marketing professionals who are responsible for promoting the brand and its products to consumers.
In conclusion, Nike's supply chain management system is a key factor in its success as a global brand. From the procurement of raw materials to the distribution of finished products, Nike has a well-organized and efficient system in place to ensure that its products are of the highest quality and reach customers in a timely and cost-effective manner.
Nike Rebounds: How (and Why) Nike Recovered from Its Supply Chain Disaster
But Nike claims it has never wavered from its single-instance strategy, even when problems with the first piece of that strategy, the i2 system, hit the news on Feb. Nike has built valuable, long term relationships with these partners. In fact, some products get so popular during the introduction phase that Nike pushes up the prices to get more profit. This effort should be coupled with the goal if integrating their many independent manufacturers into their ERP system. The Nike Code of Leadership, mentioned earlier, also includes the ways in which risks of forced labor can be addressed, like requiring a worker freedom of movement within the facility or posing bonds, contracts or deposits as a condition of employment. This gave Nike the opportunity to develop its own SCM system putting the company years ahead of competitors.
Collaboration before deployment and at the early stages of implementation is critical when integrating a new system with fractured data. It has also reduced the number of factories in its supply chain that inflict excessive overtime on their workers down to less than 2. Regardless of the recommendation Nike went live to thousands of suppliers and distributors simultaneously. The i2 system needed huge customization for it to be able to operate effectively with the existing legacy system, it took as long as two minutes to record a single entry and with millions of entries being fed into the system, it would occasionally crash. Globalization has led Nike to understand that different countries have other performance desires.
The fact that the company produced over 100,000 products and had a wide variety of information sources this made it hard for it to work effectively. In first level they let customer decide their preference for customization and had many choice around fifteen. Wailgum, Thomas 2004, 10 Famous ERP Disasters, Dustups and Disappointments. Failure to Train After the problems became apparent in the summer of 2000, Nike had to hire consultants to create workarounds to make the SCM system operational. Nike has confidence that the combining the respect for human rights and their production processes, human potential cannot be on point.
You can never train enough. See " Practice Patience in Software Implementation At the time, a software glitch causing a ripple effect that would impact the entire supply chain was a novel idea. Home The University of North Carolina at Chapel Hill. . Nike turned the project around by making adjustments and learning patience.
Case Study 16: Nike’s 100 Million Dollar Supply Chain "Speed bump"
Dell has done it, famously, with PCs; Nike wants to do it just as famously with sneakers. Yet, as evidenced by Nike, the wrong moves can have the opposite effect. They get it done offshore. Various methods and techniques are examined to ensure the development of an active system and an organizational structure best suited for product development — Computer Aided Design, Robust Design, Value Analysis, Modular Design and Environmentally Friendly Designs to name a few Shanley, 2004. As of today, their product lines also offer portable heart-rate monitors and high-altitude wrist compasses Britannica, February 2019. Today Nike offers countless customizable shoes, not only online but also in person at studios across the world.
Archrival Reebok, which partnered with VF makers of Wrangler Jeans and Vanity Fair bras, among other things on the beta effort to develop AFS beginning in 1996, struggled for years to implement the buggy, unstable AFS software. Nike says all these problems were fixed by fall 2000. It set up a department tasked solely with improving the lives of factory workers, and in 1999 was instrumental in the creation of the Today, Nike takes an ambitious approach to managing the impact of its supply chain that is as pioneering as its initial transition to 100% outsourced manufacturing was over 30 years ago. In the long run, Nike attempts to design products that utilize fewer materials from nature and that can safely go back to nature at the end of their lifecycle. In addition, the firm uses cross docking techniques and methods in production flow to increase the revenue in the global market Ross, 2013. It was acknowledged by the analysts that indeed a bold step was taken by Nike when an individual strategic instance was adopted with the initial rollout of ERP.
NIKE ERP System Failure Business Areas and Supply Chain
In other words, we can hire at least 5 more workers in South Asia than in the United States. They appointed a manager to go over there and approached to buy them over as they made a move to complete off-shore provider. Nike attempts to remedy this flaw by ordering their manufacturers to produce up to 55% for the anticipated level of goods, before any demand information is available and sometimes up to four months in advance of receiving any orders. Nike sells too many products 120,000 in too many cycles four per year to do things by intuition alone. Developing foreign markets may require more than American based designs to satisfy public expectations resulting in Nike having to consider designing internationally.
In this stage, the customers are not as excited about the product as they were during the introduction stage. Mentioned below is how Nike did it: Nike picked up from a pool a total of 40 outstanding retail performers who knew their customer segments inside out. The mission statement of Nike is to develop inspiration and to consistently innovate for each sports person across the globe. When the problems were discovered, Nike had to develop workarounds. The company uses the code of conduct to minimize any detrimental effects that manufacturing can have on local communities as well as the environment.