An overview of nikes supply chain and manufacturing. Nikes supply chain management distribution vertical marketing system horizontal marketing system multichannel marketing system. 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. Supply chain sustainability is a topic of increasing importance for businesses and can be of particular interest to smes. Firms across industries were required to deal with huge demandsupply mismatches caused by collapsing demand. Improving the nike supply chain 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. Supply chain problems to slow adidas sales growth reuters. Nikes strategy to improve conditions in its global supply. 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.
It was found by bill bowerman and phil knight in the year 1964. 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. Nikes primary goal is to supply athletes with exceptional products. Nike and adidas are two global companies try to improve their competitive advantage through strategically managing and utilizing their supply chain. Vertical integration nikes operations are vertically integrated with a presence in every segment of the value chain from manufacturing down to. With a proper supply chain management, nike can buy material which are used for producing products at a lower rate, so that the expenses for production will not increase and then sell the product at a higher rate, with this nike will increase the profits coyle and et. Nikes failure in adopting supply chain information system. Integrating sustainability with supply chain management rewiring nikes approach to supply chain sustainability has involved changes both at the company level and with its suppliers. Within the company, nike changed its organizational structure to better integrate. This study tests the hypothesis that lean manufacturing improves the social performance of manufacturers in emerging markets. A mustknow investors guide to nike part 5 of 22 continued from part 4the cogs in nikes supply chain. Nikes response to a supply chain crisis repositioned it as a sustainability leader, and raised the bar for an entire industry. The new system of i2 needed customization to this legacy applicable at that speculative period.
Since nike s manufacturing strategy is based on outsourcing and contract manufacturing, growing protectionist actions could hit its supply chain process. Pdf ip sustainability in global supply chains a stakeholder. In addition, the big bang approach tried by nike to implement the new system of managing the supply chain resulting in deteriorating the status of the company. I2 technologies, a supply chain management software and service company, founded by sanjiv sidhu and ken sharma in 1988 supply chain software, supply chain management software, 2014. The company specializes in athletic wear, providing footwear, apparel, athletic equipment, and accessories. There is also a body of research that suggests a posi. But the growth of the global supply chain has also created a new class of ethical. Most of the successful businesses worldwide have improved their growth rates only by adopting innovative supply chain management practices. Nike has approximately 1 million employees spread out across 715 factories in over 44 countries. Nikes dtc approach is twoprongedthe nikeowned retail stores, which are the brickandmortar stores, and its digital platform. Nikes strategy to improve conditions in its global supply chain a case study.
Indeed, sustainable supply chain management can be a strong driver of value and success for business as much as for society. Nikes strategy to improve conditions in its global supply chain a. A case study on how does nike manages its supply chain. It is imperative that a mutual understanding exists between nike and its suppliers to ensure quality throughout the supply chain. Nike enjoys a strong brand, wellmanaged distribution processes and a compelling product offering. Economic order quantity model eoq and the supply chain operations reference model scor are used to fostering operational efficiency. This can be achieved by making few of the products functional and developing a responsive supply chain for the rest of the innovative products. Locke august 29, 2015 management science, forthcoming. Supply chain management corina botnarevschi, ehab etani, akbar khan, amir garranah 2. Of those 715 factories, nike only owns 73 manufacturing centres located in the united states whereas the other 642 are contract factories that nike source product from. Master thesis emin berzah eindhoven university of technology. Nike manufacturing and supply chain strategies market realist. Nike swot 2020 swot analysis of nike business strategy hub.
The importance of innovative supply chain management has been highlighted by scholars and researchers for successful management of businesses in the 21 st century. Nike supply chain collaborative iis mm ugm ap 6b an implementation of information system in supply chain management super chain workgroup. Nike s factory stores provide a premium product to consumers. Nikes evolving supply chain columbia business school. Endoflife products management in a closedloop supply chain. Nikes strong, longterm relationships with suppliers help us create innovative product responsibly. Nikes rewire approach to supply chain sustainability has involved making several changes in the. The new case studies trace nikes journey as one of the first companies faced with issues in its global supply chain to one that now actively pursues sustainable innovation as a part of the. Nike has a global procurement team to manage the procurement part of its supply chain management. Stanford initiative for the study of supply chain responsibility sisscr.
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. Internship program is the ideal opportunity to explore the intersection of all nike businesses. Integration, incentives and innovation nikes strategy to. A recent survey suggests 30% of manufacturers are gaining new profits directly from sustainability initiatives, showing a clear opportunity for bottom. As a result, nike has created the following standards for their supply chain. Ardhi puji hariadi aswin budi pratomo danny dharmawan kosasih erry sunarli gede arya wiguna hari tarigan muhammad ahsin rogayya yuri pramono yudho 2.
Nike supply chain, and successfully tested with a case study within nike emea. Also, nike has decided to acquire and implement i2 technologies demand forecasting system in order to overcome a number of supply chain management problems and large amounts of data were being fed into the i2 technologies system form legacy systems within nike. Expectations are set, and the potential supplier can view nikes playbook on how it executes its supply chain operations. Nike manufacturing and supply chain strategies market.
The infographic below shows an overview of those different stages or tiers of our value chain, the main processes within those tiers, and the relative carbon and water impacts of the tiers. Nike wins 2019s company of the year award for its acquisition of artificial intelligence ai and predictive analytics startup celect the culmination of a threepart, threeyear strategy to reduce lead times, increase visibility and help the retailer anticipate shifting consumer demand across global markets. Apple, nokia, dell tops among global supply chains. Two visionaries, bill bowerman and his university of oregon runner phil knight, thought they could do a better job of designing and selling shoes to runners. One companys unprecedented disclosures raised the bar for an industry in april 2005, nike surprised the business community by releasing its. 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. Andy campion leads nikes global technology and digital transformation, demand and supply management, manufacturing, distribution and logistics, sustainability, workplace design and connectivity, and procurement. Management and social performance in the nike supply chain greg distelhorst jens hainmueller richard m. Nike s dtc approach is twoprongedthe nike owned retail stores, which are the brickandmortar stores, and its digital platform. Since nikes manufacturing strategy is based on outsourcing and contract manufacturing, growing protectionist actions could hit its supplychain process. Nike should take efforts to shift from upper right hand cell to lower right hand cell. However, with new competitive entrants with better service and lead time, and even fashion brands moving into their market space, supply chain excellence has been elevated in the past few years, and is viewed as a competitive weapon. Nike decided to adopt a supply chain management system from i2, a major competitor in the field of erp systems. Nikes program was first accredited in 1999 and received its last reaccreditation in 2008.
Products move from several distribution centers across a network of thousands of retail. Analyzing nikes distribution channels and retail strategy. To experience the emotion of competition, winning and crushing competitors. The key to nikes efficiency is its low overhead manufacturing costs. Our approach also supports better outcomes for our suppliers, the people who work in. Amr researchs annual list of the top 25 supply chains puts apple at the top for meeting iphone demand. Nikes manufacturing network has over 525 factories. Every day, each of us comes in contact with a multitude of products that have been produced outside the united states. Hamza amjad daniel arcaro alex quintana brett reardon samir reddy.
Adidas expects supply chain issues to curb sales growth in the first half of the year, particularly in north america, where it has doubled its business in. It includes selecting and contacting the right suppliers for the right goods and services. Supply chain experts ensure that every year, almost a billion units of footwear, apparel and equipment arrive at the right place, at the right time. Apple and amazon, or the sustainability leadership of supply chain organizations like unilever, nike and schneider electric, has been a big help. By spreading good business practices around the globe, it. Doc global supply chain management case study nike. Nike statement on forced labor, human trafficking and. Sustainable supply chain management practices and operational performance 43. For a company that moves over 900 million units per year, these savings amount to a serious competitive edge. As demand for our product grows, we must be insightdriven, dataoptimized and. The nike supply chain operations team can reduce lead times by 83. Supply chain strategic management for nike marketing essay. Nikes express lane strategy is on the way to cutting lead times in half and driving doubledigit growth in many of our key cities, ceo mark parker said on a recent earnings call the program combines rapid prototyping with 3d and digital printing, and continues to be the engine thats creating the most agility in our supply chain right now.