SCM and ERP Software Implementation at Nike: From Failure to Success

            
 
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Case Details:

Case Code : OPER049
Case Length : 18 Pages
Period : 1996 - 2005
Organization : Nike
Pub Date : 2005
Teaching Note : Available
Countries : United States Industry : Footwear & Apparels

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Introduction Contd...

An AMR Research5 survey of 110 companies of annual revenues of $500 million or more using ERP revealed that only 23% had adopted a single instance strategy while 36% were planning to put it in place, while another 17% were trying to get the instances down to one per major global region and were investing considerable funds to achieve this.

Analysts acknowledged that Nike had indeed taken a bold step when it adopted the single instance strategy with its first ERP rollout. During the late 1990s, most companies avoided it due to its huge costs and bandwidth problems. Christopher Koch, Executive Editor, CIO Magazine, remarked, "If it was easy, everyone would just do it."6

Operations Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

Nike's Supply Chain

Founded in 1957 by Philip Knight (Knight), Nike manufactures high quality athletic shoes for a variety of sports including baseball, athletics, golf, tennis, volleyball and wrestling. In addition to footwear, Nike also manufactures fitness equipments, apparels and accessory products. The company's products are sold in over 140 countries around the world.

All product development factory contracting and marketing activities were carried out at the company's headquarters in Beaverton, Oregon in the US. Nike's global operations were broadly divided into five geographic regions – United States; Europe, Middle East and Africa (EMEA); Asia Pacific and Americas (includes Canada, Mexico and other Latin American countries of Chile, Brazil and Argentina).

Since the mid-1970s, Nike has outsourced its manufacturing activities. The company's products were manufactured in factories owned and operated by its business partners commonly known as contractors around the globe.

In 1975, Nike introduced the Futures program to manage the market for its footwear products. Under this program, Nike's retailers placed orders with the company six months before the required delivery date with the guarantee that 90 percent of their orders would be delivered within a set time period at a fixed price. These orders were then forwarded to the manufacturing units around the world...

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5]  Headquartered at Boston, USA, AMR Research provides industry information and advice on how businesses could adopt technology.

6] Christopher Koch, Nike Rebounds, CIO Magazine, June 15, 2004.

 

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