Nikes strategy to improve conditions in its global supply chain a case study. Supply chain management corina botnarevschi, ehab etani, akbar khan, amir garranah. Nikes supply chain sources most of its raw materials in the manufacturing host country by independent contractors. Nike has admitted its chinese supply chain is suffering from a lack of transparency, problems with wages and the use of underage workers. Qualified applicants will receive consideration without regard to race, color, religion, sex, national origin, age, sexual orientation, gender identity, gender expression, protected veteran status, or disability. As a result, nike is always shopping for new and more productive manufacturing sites around the world. Most of the successful businesses worldwide have improved their growth rates only by adopting innovative supply. Nike supply chain essay example topics, sample papers. Nike supply chain collaborative iis mm ugm ap 6b an implementation of information system in supply chain management super chain workgroup. A mustknow investors guide to nike part 5 of 22 continued from part 4the cogs in nikes supply chain. Nikes strategy to improve conditions in its global supply.
To make the best decisions, managers need access to realtime data about their supply chain, but the limitations of legacy technologies. Management and social performance in the nike supply chain greg distelhorst jens hainmueller richard m. Doc global supply chain management case study nike. Mar 27, 2008 nike has admitted its chinese supply chain is suffering from a lack of transparency, problems with wages and the use of underage workers. In normal word, supply chain management is a management of goods and services fawcett, ellram and ogden, 2014. Mar 19, 2016 supply chain system of nike shoes adm3302 by. An overview of nikes supply chain and manufacturing strategies. Because the supply chain spans multiple jurisdictions from raw materials to. Supply chain management is the control of the supply chain and it is a process from supplier to manufacturer, then from wholesaler to retailer and at last to customers.
Firms across industries were required to deal with huge demand supply mismatches caused by collapsing demand. Nike is committed to working with and providing reasonable accommodation to. Within the company, nike changed its organizational structure to better integrate sustainability within traditional corporate functions. Introduction supply management is a complex function thats critical to business success, responsible for delivering efficient costs, high quality, fast delivery and continuous innovation throughout companies entire supply chains. I think to improve somewhat fragmented and failing demand forecasting and order activities in nike. Nike decided to adopt a supply chain management system from i2, a major competitor in the field of erp systems. Sustainable supply chain management practices and operational performance 43. Nikes evolving supply chain clelia peters mba 09 these days, your new sneakers are far more likely to have spent more time traveling than you have. Nikes supply chain management distribution vertical marketing system horizontal marketing system multichannel marketing system.
The main support for its global business empire is the supply chain network. Nike manufacturing and supply chain strategies market realist. Oct 17, 2019 nikes supply chain sources most of its raw materials in the manufacturing host country by independent contractors. Integration, incentives and innovation nikes strategy to improve. This study tests the hypothesis that lean manufacturing improves the social performance of manufacturers in emerging markets. Nike by cgt staff 12262018 get great content like this right in your inbox. An effective distribution strategy would be key for nike. This structure is based on the companys needs in its global organization, as well as the. Nike s supply chain strategy heavily emphasizes the use of multiple sourcing partners. The importance of innovative supply chain management has been highlighted by scholars and researchers for successful. Nike uses the enterprise resource planning erp software, sap to manage all their inventories, deliveries, logistics and supply chain activities. The challenge nike needed to create a reliable domestic supply chain solution for their operations in indonesia as they had previously relied on domestic distributors and had no external logistics provider.
Nike should take efforts to shift from upper right hand cell to lower right hand cell. They required a solution that reduced both supply chain costs and lead times to customers, and also provided real time inventory visibility. This report explores how nikes approach to improving social and environmental conditions in its global supply chain has evolved through integrated management of sustainability and. May 17, 20 nike s vision of a lean, green, equitable and empowered sustainable supply chain required a fundamental shift in business relationships, but is now embedded within the new manufacturing index. This report explores how nikes approach to improving social and environmental conditions in its global supply chain has evolved through integrated management of sustainability and innovation, increased. Supply chain management project nike shoes youtube. In this shopping process, nike is looking for, among other things, inexpensive labor, low import taxes, and high levels of efficiency in the manufacturing process. Supply chain management corina botnarevschi, ehab etani, akbar khan, amir garranah 2. For a company that moves over 900 million units per year, these savings amount to a serious. Nike is a celebrity brand of sports shoes, apparel and equipment.
The objective in this strategic decision area of operations management is to align the supply chain with the companys overall strategic aims. Nike statement on forced labor, human trafficking and. To make the best decisions, managers need access to realtime data about their supply chain, but the limitations of legacy. Store management process over 2,00,00 retail shops all over the. On top of that, media images of children sewing nike soccer balls and running shoes sent social activists, academics and journalists into a costly antinike campaign. Apart from these things, the brand is globally popular for its quality of products. Supply chain strategic management for nike marketing essay. Nike has a geographic divisional organizational structure.
By redesigning its logistics network, improving contact manufacturer relationships, nearshoring more facilities, and investing in automation, lead times for the. In response to these threats, nike took several steps to improve conditions in the factories. Sustainable supply chain management practices and operational. The study recognizes several sustainable supply chain management practices and initiatives and focuses on the economic, environmental and social impacts. Locke august 29, 2015 management science, forthcoming. Although sales to wholesalers accounted for about 68% of nikes global revenues in fiscal 2019, the company has gradually worked. Supply chain 9 important ways to improve supply chain. Integrating sustainability with supply chain management rewiring nike s approach to supply chain sustainability has involved changes both at the company level and with its suppliers. Integrating sustainability with supply chain management. Store management process over 2,00,00 retail shops all over the world within the usa there are 18000 stores that retail nikes products nike has a strong network of retailers in 200 countries world wide. As a result of the shift in the sales mix to highermargin geographies and nike direct business, nike saw great margins.
These will be based on intellectual capitalbrands, technology, new product development, new channel strategieswith operations activities largely outsourced. Rewiring nikes approach to supply chain sustainability has involved. Nike is working towards mapping these risks further up the supply chain and to expand engagement with tier 2 suppliers where additional risks of forced labor may occur. Nike is known for great product quality, innovative product designs, and a unique marketing style. By redesigning its logistics network, improving contact manufacturer relationships, nearshoring more facilities, and investing in automation, lead times for the nike supply chain can be reduced from 60 days to ten days. Introduction supply management is a complex function thats critical to business success, responsible for delivering. Nike manufacturing and supply chain strategies market. Nike has excellent supply chain management, which facilitates efficient production to support the global sports shoes, apparel and equipment business. Nikes supply chain sources most of its raw materials in the.
Supply chain management adidas free download as powerpoint presentation. Apr 26, 2017 tugas supply chain management dari mb 3906 nama anggota. For a company that moves over 900 million units per year, these savings amount to a serious competitive edge. The importance of innovative supply chain management has been highlighted by scholars and researchers for successful management of businesses in the 21 st century. The supply chain is the heart of a companys operations. With approximately 200,000 professionals across 30 countries and a promise to help the world live smarter, the company provides innovative design, engineering, manufacturing, realtime supply chain insight and logistics services to companies of. Analyzing nikes distribution channels and retail strategy. An important part of nikes supply chain management strategy is using a number of different global manufacturing resources to its advantage.
In order to ensure that the supply chain is effective, msi 2004 states that nike uses a single instance of sap r3 which is a single planning engine that centralizes demand management in order to ensure efficient collaboration with the suppliers. A case study on how does nike manages its supply chain. Every day, each of us comes in contact with a multitude of products that have been produced outside the united states. Supply chain management of nike management paradise. Tugas supply chain management dari mb 3906 nama anggota. The major way we see supply chain management meeting future needs is through virtual organizations. Introduction supply management is a complex function thats critical to business success, responsible for delivering efficient costs, high quality, fast delivery. Sustainable supply chain management semantic scholar. Nike supply chain collaborative iis mm ugm ap 6b an implementation of information system in supply chain management super chain. This can be achieved by making few of the products functional and developing a responsive supply chain for the rest of the innovative products. Its successful global business model is based on successful supply chain management.
An overview of nikes supply chain and manufacturing. Qualified applicants will receive consideration without regard to race, color, religion, sex, national origin, age, sexual orientation, gender identity. With approximately 200,000 professionals across 30. Nike statement on forced labor, human trafficking and modern. Nikes vision of a lean, green, equitable and empowered sustainable supply chain required a fundamental shift in business relationships, but is now embedded within the new manufacturing index. What factors led to the i2 technologies implementation being a highly complex project. Nikes strategy to improve conditions in its global supply chain a. In general terms, supply chain management can be defined as the man. Thomopoulos 2014a unfortunately before they could implement the new software nike had already hit their rock bottom. Nike and adidas are two global companies try to improve their competitive advantage through strategically managing and utilizing their supply chain. The companys gross profit margin grew by 150 basis points to 45. Because the supply chain spans multiple jurisdictions from raw materials to production to shipping to retail and, ultimately, to consumers, a consistent and mature public policy position is needed.
Nike is one of the pioneers of the manufacturing outsourcing strategy. Dec 26, 2018 we are transforming the sophisticated global supply chain, from one where a futures order was historically our signal to start supplying the market, into one where consumer demand is our signal to anticipate and respond, chief operating officer eric sprunk explained at last years investor conference. This gives the supplier, 7 the receiver and the distribution channel a realtime information on the status of the products. To help visualize this part of the process, we must understand that the supplier has its own supply chain and it ends with exporting the products to nike, which is where nikes supply chain begins. Two visionaries, bill bowerman and his university of oregon runner phil knight, thought they could do a better job of designing and selling shoes. Nike is working towards mapping these risks further up the supply chain and to. Nike leaders realized they were facing a supply chain crisis. Nike has evolved from an organization that manufactures for professional athletes to a company that is manufacturing for all ages, demographics and fashion inclined too through technological innovations. They needed a new strategy to deflect the growing criticism and improve their suppliers performance. This report explores how nikes approach to improving social and environmental conditions in its global supply chain has evolved through integrated management of sustainability and innovation, increased supplier incentives, and systems innovations intended to prevent problems before they arise.
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