Nike Supply Chain Management System

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Nike Inc. roots trace themselves many years back to the 1950s with University of Oregon field coach Bill Bowerman trying to find a competitive advantage for his track runners using a lighter shoe. Through the years, Nike Inc. continued to create innovative sports apparel, expanded into new markets, and always searched for a competitive edge. Forty years from its founding Nike continues “to seek new and innovative ways to develop superior athletic products, and creative methods to communicate directly with customers” (Nike Inc, 2012). Today Nike is one of the leading seller and manufacturer of sports apparel, controlling about 32 percent of the worldwide sport apparel market (Koch, 2004). As of today, the stock price is ranging around 60 US$,…show more content…
Due to the fact that this system was inefficient and full of bugs, Nike decided to change its ERP system, switching from the SAP system to a custom-made ERP system by i2 Technologies Inc. In 2000, Nike decided to implement this supply chain management system with the ambition to be able to better forecast market demand, and to meet those demands faster. The key element of this huge scale project by i2 Technologies Inc. was to aid Nike forecasting market changes and help the company to automate processes, so that Nike can lower its operational cost due to increasing efficiency for Nikes manufactures, lowering shipment cost for Nike. Former Federal Reserve Chairman Alan Greenspan, recognized that "new technologies for supply-chain management can perceive imbalances in inventories at a very early…show more content…
Hence, Nike decided to use the i2 technologies supply chain management software for their management of inventory, production, shipping, and sales forecasting. One of the main decision driver was that Nike wanted to be able to respond faster to shoe market changes, plan production schedules of the new demand, and begin production of the new shoes in one week, rather than the one month due to the new i2 Software (Laudon, Laudon, 2010). If successful, Nike would gain a competitive advantage due to the reduced production of unwanted products, reducing inventory, while increasing the production of products in demand (Laudon, Laudon, 2010). Nevertheless, Nike knew that ERP systems can be dangerous, and was patient when implementing it. However, since the i2 system was much smaller as the old SAP system, Nike did not take as many precautions as they should have (Koch,

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