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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Excerpts Contd...
Implementing SAP Apparel and Footwear Solution (AFS)
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As part of the SAP ERP project, Nike had decided to implement the SAP AFS
solution which was a variant of the SAP R/3 software developed specifically for
the apparel and footwear industry. In conformity with the Single Instance
Strategy, Nike used the SAP AFS application across all geographies, and also
chose to implement other SAP applications including Supply Chain management (SCM)
and Business Information Warehouse (B/W) (Refer Exhibit V for details). It was
also considering pilot testing of the SAP NetWeaver platform in the near future.
The company expected that Single Instance Strategy would result in better
integration and provide a competitive edge by enabling holistic view of its
business...
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The Benefits
Nike spent six years and $500 million on the NSC project. By 2004, the
project was 80% complete. The company reaped several benefits from the
project. While inventory levels witnessed a declining trend, the project
also made design and manufacturing quicker and resulted in increased gross
margins of 42.9% in 2004, up from 39.9% five years ago. The company also saw
its highest cash flows from operations in eight years. Earlier, Nike
purchased products from manufacturers about 9 to 10 months in advance while
Nike's retailers ordered only six months in advance...
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Exhibits
Exhibit I: i2 Tradematrix Plan Solution
Exhibit II: Tradematrix and Private Marketplace
Exhibit III: Implementation Methodology
Exhibit IV: Demand Forecasting: Myth Vs Reality
Exhibit V: SAP Landscape at Nike
Exhibit VI: Nike Supply Chain Initiative Implementation Plan |
Exhibit VII: Financial History of Nike
Exhibit VIII: Traditional Supply Chain Vs Adaptive Supply Chain Networks
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