The Supply Chain Management Of Nike Marketing Essay

The Supply Chain Management Of Nike Marketing EssayNike is an fundament familiarity, designing and planning for the sustainable economy of tomorrow, not just now right away. Climate change, and reducing Nikes environmental trail, is something the company has been focused on for well over a decade, in conjunction with broader sustainability work.By setting sozzled targets greenhouse gas emissions from owned operations and business travel were reduced by 18 percent from 1998 to 2005, despite an increase in the squ are footage of Nikes operations.The majority of Nikes climate change impact derives from the operations of the to a greater extent than 700 stipulation factories producing Nike-branded product.Given that the trans appearance operations which die hard Nike product from the point of manufacturing to the distribution centers account for most 25 percent of Nikes CO2 emissions, the company has set a target to reduce the inbound logistics footprint by 30 percent.Su pply Chain Management which Nike have in its Considered Designbecomes a di erentiator for brands and a source of private-enterprise(a) advantage, company think it is crucial that the consumer has accurate, complete information on not just the delivery of green products, but the extent to which the company is committed to greening its entire leave range of a function.As early as 2003, Nike demonstrable a baseline of its issue reach general environmental footprint, including inbound logistics and subcontracted manufacturing.As part of the companys Climate Savers agreement, Nike partnered with the University of Delaware to develop a model for measuring inbound emissions of product transportation from mill to rst distribution facility. Nike is functional to expand that model to measure outbound shipments from distribution facility to retail. Footwear contract manufacturing, a majority of which is in Vietnam and China, is another major challenge for Nike. The company has began w ith audits of key factories to identify energy-intensive processes and potential difference areas of savings.Nikes US supply reach team has set goals to reduce its overall carbon footprint and is working closely with third-party logistics providers to nd opportunities to optimize fuel consumption and accelerate the use of alternative fuels. Nike also assessed its publicity footprint as part of a company-wide waste mapping exercise in making excellency in all aspects.The ChallengeFinding a business solution that allows this leading apparel and footgear maker to align its demand and supply in a way that minimizes broth and improve customer service levels. Business users were not satisfied with existing implementation of the demand planning system.The SolutionBristlecone certain and deployed planner DA and SC Policy Manager, composite pre-configured applications that allowed Nike to enforce high uper level supply range of mountains policies without having to deal with voluminous SKU Level demand and supply information. The composite apps bridged the gaps betwixt Nikes existing ERP and SCM systems.Business reach Better ROI from existing ERP and SCM solutions Improved visibility into supply and demand Planners empowered to better align supply with demandNIKE, Inc. recognizes the need for a well-coordinated and cost-efficient supply chain for its business and the industry. Because the supply chain spans twofold jurisdictions from raw materials to production to shipping to retail and, ultimately, to consumers, a consistent and mature public policy localize is needed.Nike sustenance policies that deliver efficient, cost- pitchive delivery of NIKE Inc. products in a responsible manner. Our efforts concentrate on ensuring efficient transport, security and safety of NIKE, Inc. products finishedout the supply chain. In addition, we advocate for policies that help to ensure that NIKE, Inc.s supply chain from factory to consumer operates in a manner that co nsiders both people and the environment at each graduation of the way. We work with a number of bodies to advocate for these policies. These include national governments, industry associations and NGOs.Nike see two major changes in their supply chain management system. The counterbalance involves the apparel side of our business. With the elimination of quotas,they have changed their sourcing scheme to enter into many an(prenominal) to a greater extent strategic partnerships than they did in the past. Not all of apparel bequeath inevitably be made in China. tho going forward,they see many more than apparel companies focussing on partnerships, and that should help in injecting more speed and agility into the supply chain management of Nike.1) The here and now major change hinges on the need to be more demand-driven. Point-of-sale POS technology has progressed significantly in recent years, and POS information is more readily available and also a lot cleaner than it was in the past. At this point, it is up to company to figure out how to use that information to become much more responsive to the needs of our customers and deliver the products at a best suitable procedure and creates the value for time.2) RFID will no doubt help Nike in a number of ways for continous improvement of supply chain management .RFID is world used to identify inbound and outbound product. RFID is being used in the warehouse to locate product. It is being used in manufacturing and processing industries to track and locate WIP (Work in Progress) and finished goods. RFID is being used to monitor and track product in transit, and RFID is being used to ensure store shelves are replenished.GAO RFID understands that the Supply Chain requires more than one type of RFID technology to satisfy all these assorted requirements and has developed polar solutions for tracking as well locating.But they believe that it has the potential to help us physique more demand responsiveness into our supply chain.Nike has played a leadership role, along with other businesses and multilateral victimisation organizations, in supporting infrastructure development in Vietnam and encouraging supply chain management of nike inc. The first fate of the program involved having key Vietnamese government officials visit a Nike footwear factory in Vietnam and afterward physically follow the movement of finished products from the factory to the port. The group traveled to southern China, an area well known for its development of physical infrastructure. They also visited Singapore to see world-class port facilities and operations and learn about infrastructure planning and financing.Not only the operation of nike in many countries today than they did 10-to-15 years ago, but the regulations in these countries are always changing. For example, back in 1990, the average tax in India was about 58% for products coming in, and now its about 20% or so. Similarly, the average tax in China used to be 30%, and today its about 6%. As a result, Nike operates differently today in the global marketplace even in countries where they had a presence for years.Formerly, because of the high tariffs, Nike tended to do mostly local sourcing. But now that tariff rates have fallen and subsequently increasingly starting to do much more deployment of global sourcing space, and thats changing the whole Nikes supply chain networkNike also overhauled its supply-chain system, which often left retailers either desperatel. The old jerry-built compilation strung unitedly 27 different computer systems worldwide, most of which couldnt talk with the others. Under Densons direction, Nike has spent $500 million to realise a new system. Almost complete, it is already contributing to quicker design and manufacturing times, and fatter gross margins 42.9% last year.That still-modest portfolio of different brands helps to lessen the companys dependence on hit shoes and could help Nike turn in a more consistent performance. Thats why Nike is eager to snap up complementary brands as they become available. In mid-August it gainful $43 million for Official Starter Properties, licensors of sneakers and athletic apparel whose brands include the budget-level Shaq label. What were trying to do is move toward more of a consumer, noncyclical model, says Blair. The key is trying to find the right balance of discipline, innovation, creativity, and structure.Nikes Supply think of ChainIn 1984, Nike owned just 16% of the athletic-shoe market, and for much of the 1980s it was running neck-and-neck with Reebok (Wilson 1). Now, with somewhere between 43-47% of that market, Nike is the undisputed leader. However, things are not perfect with the company. In the late 1990s, Nike began to see the results of many unresolved issues concerning competitive forces exterior to the company and a value chain, unrepresentative of its marketplace and enormous growth, interior to the company. Both i ssues stirred its bottom line negatively. One significant issue was simply a function of poor inventory management and demand forecasting, coupled with the ongoing and dramatic slump in Asian sales. Nike had anticipated a doubling of Asian revenues, but saw instead a decline . Nike also had recurring problems managing the ply of goods from manufacturers to retailers. Finally, Nikes competitors, most notably Rebox, New Balance, Adidas and Fila, were copying much of the look of Nikes advertising campaigns, making its image protuberance much less effective.Nike faced many challenges that they face in building, managing, and expanding global supply custody. Following are some of the nuggets gleaned from their remarksOcean freight between Asia and North America routinely takes45 days or even as long as 60 days, in the event of missed sailing schedules or other problems.When an order is delayed, it has to be expedited through the manufacturing process, and the burden falls on trans portation to offset the delays. But trying to make up for lost time by air freighting containers has a ruinous effect on freight budgets.Cross-country cost comparisons for sourcing product should be calculated on an all-in basis, including the costs of self-command along with all other costs incurred across the supply chain.Global supply chains effortless involve such vexing problems as complex import-export processes, inadequate logistics infrastructures, and a gauntlet of regulations and trade agreements that are forever changing.When network optimization studies are prepared, they must identify and include the infrastructure-related challenges that are commonplace in emerging markets.Owing to escalating product proliferation, a key challenge is to build more speed, responsiveness, and adaptability into supply chains while still meeting the diverse needs of consumers in different markets.Customers are becoming more sophisticated and demanding, insisting on shorter lead times and faster inventory-turns. To be competitive, suppliers must accommodate these requirements without inflating their cost structures.Looking ahead, freight transport looms as a major source of concern including rising costs, subject matter bottlenecks, and homeland security.The relative costs of manufacturing onshore versus offshore are shifting, and the balance could tip in estimate of manufacturing beginning to migrate back to the U.S. from offshore locations.Worldwide, Nike faces a huge amount of product proliferation, and their challenge is to build more speed, responsiveness, and adaptability into our supply chains while still meeting the diverse needs of consumers in different markets.They started to create more partnerships with suppliers and carriers and implementing lean manufacturing programs everything and anything that can help us get more flexibility into their supply chainSUPPLY CHAIN MANAGEMENT OF NIKE IN INDIAAt Nike which has $16 billion in revenues today with the goal of getting to $23 billion by 2011 process excellence is a key component of the companys supply chain strategy. Nikes three businesses footwear, apparel and equipment have some similarities since most of the products are made in Asia and sold to similar customers worldwide. Their production processes, though, are completely different. Much of this has to do with the fact that from the time Nike began in 1964, it has never owned a factory but has chosen to work through contract manufacturing. They are trying to build our strength in process excellence through standardization and also doing this through the concept of lean manufacturing, which Toyota has made popular.Nike is also working towards what it calls delivery precision. Nike conceives its products in the form of prayers. A collection could consist of a top apparel, a bottom apparel, shoes, bag, cap, etc. This is how customers typically like to buy products. eyepatch Nike designs these products as part of one collect ion, each category of items is made in different locations. As a result, if supply chain execution goes awry, these products are not available as complete collections, and that leads to loss of sales. acquire this streamlined is extremely challenging because it involves changing the way contract manufacturers work.Nike supply chains need to support our different businesses and different business models, One of our key challenges is to design supply chains that can supplement what is common and use common platforms and, at the same time, customize parts of the supply chain wheresoever necessary to meet the end needs of the markets specially in countries like india.