Nike Supply Chain


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Class assignment at MMUGM

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  • The factories stated that sometimes they have to keep the products at the consolidator because the products are too early for the timelines acceptable by Logistics. According to Logistics, “the consolidator does not manage shipments based on the factories GAC dates (RGAC). If the factory delivers cargo as stated in their booking to the consolidator and the cargo is not 'needed' by Nike's destination region the cargo will be held at the consolidators warehouse at the expense of the destination region. The 14 day rule is basically the average amount of time allowed as 'free time' by the consolidator at origin.” In other words,
  • Nike has always been known as a product and marketing leader; we are also adding our leadership in SC to our strategic goals – GPO support this
  • Step 1: Modeling data is automatically loaded into SCP (Supply Chain Planner) when the engine is brought up to create an feasible Build Plan reflecting actual factory capacities. Step 2: Once the Build Plan is created, the plan is fed back into the Active Data Warehouse (ADW) where it can be accessed by various planning tools (RCP, RPS (Rhythm Production Scheduler), and ADW editor. Step 3: The Build Plan is then uploaded from the ADW into RCP for collaboration on the plan to begin. Nike will then collaborate with the factories to determine the quantity of shoes at each style/color that have to be manufactured on a particular lasting line. Nike planners will review the factory responses in RCP and either accept or reject the factory numbers. If Nike rejects the factory numbers, the commits could be changed to the Nike Build plan quantities before being fed into SCP. Step 4: After collaboration changes to the Build Plan are downloaded from RCP into the ADW and the process is repeated. More definitions ADW : Active Data Warehouse. Collection of data tables containing product, factory, demand, and resource information used by SCP to create feasible build plans. SCP : Supply Chain Planner. The i2 tool Footwear Supply Planning will use to generate feasible build plans. RPS : Rhythm Production Scheduler. The i2 tool Footwear Supply Planning will use to optimize and make manual changes to build plans within Interactive Planning Horizon at a Factory/Line/Product/Country level.
  • Nike Supply Chain

    1. 1. Nike Supply Chain Collaborative IIS - MM UGM AP 6B An Implementation of Information System in Supply Chain Management SUPER CHAIN Workgroup: Ardhi Puji Hariadi Aswin Budi Pratomo Danny Dharmawan Kosasih Erry Sunarli Gede Arya Wiguna Hari Tarigan Muhammad Ahsin Rogayya Yuri Pramono Yudho
    2. 2. Company Overview NIKE, the world's biggest shoe company, has a reputation for fancy footwork, especially in the arena of marketing. With both Forrest Gump and Michael Jordan sporting NIKE's athletic shoes, NIKE's appeal is wide ranging. The shoe giant still holds nearly 37% of the US market, a giant lead over #2 Reebok, which has 20.5%, and #3 Fila, with only 5.1%. NIKE - a powerhouse in the world of sports, the designer and international marketer of athletic shoes, casual footwear, apparel, and accessories - is looking for new growth opportunities. Founders: Bill Bowerman and Phil Knight. First year-sales totaled $ 8,000 (1962). Employees: NIKE employs approximately 26,000 people worldwide with 650,000 workers are employed in Nike contact factories around the world. Revenue FY05: $ 13.7 billion ( 12% increase from FY04) Manufacturing: Nike brand had 137 factories in Americas (including US), 104 in EMEA, 252 in North Asia and 238 in South Asia. Subsidiaries: Cole Haan Holding, Inc, Bauer Nike Hockey, Hurley International LLC, Nike IHM, Inc, Converse Inc, Exeter Brands Group LLC
    3. 3. 0 -- 30 -- 60 -- 90 -- 120 -- 150 -- 180 Planning Retailer Sales Order Purchase Order Source Optimization Life of a Sales Order DC Retailer DC Consumer Supplier Manufacture 76 days Manufacturing Process in every country worldwide Cumulative Days 5 45 100 45 3 3 30 40 Future Current 195 76 Future State Vision
    4. 4. Supply Chain Management “ Supply Chain Management is the management of the entire value-added chain, from the supplier to manufacturer right through to the retailer and the final customer. SCM has three primary goals: Reduce inventory, increase the transaction speed by exchanging data in real-time, and increase sales by implementing customer requirements more efficiently” Deepen the Consumer Relationship Deliver Absolute Product Superiority. Period Make Supply Chain a Competitive Advantage Leverage Our Growth Potential Our business focus will be in premium branded footwear, apparel and related accessories in the sports to lifestyle opportunity space The primary levers of growth will be to dominate sport globally, aggressively expand our positions in active life and address the value segment with existing and/or new brands We will clarify the positioning of each brand in the portfolio to minimize overlap and maximize the total market potential Attack business opportunities through a foundation in fields of play. Multiply our leadership depth and talent. Deliver Absolute Product Superiority. Make Supply Chain a Competitive Advantage Deepen the Consumer Relationship Leverage Our Growth Potential
    5. 5. Footwear Planning NSC & Objectives Create the foundation for executing to shorter lead times and more flexible buying processes Reduce inventory throughout the supply chain by creating purchase orders with volumes in weekly buckets based on customer requirements. Develop a planning, production, and delivery process that is based on real customer requirements throughout the supply chain. Precision- Production Planning and Delivery Reduced inventory and improved customer satisfaction Benefits Planning Objectives
    6. 6. What is changing? From - To <ul><li>FROM </li></ul><ul><li>Hardcopy legal PO’s printing and delivery </li></ul><ul><li>E-mail connectivity between regions, global and liaison offices </li></ul><ul><li>LO as a filter for all PO info and change requests </li></ul><ul><li>E-mail to communicate PO change requests </li></ul><ul><li>Separate systems for PO creation and communication of PO changes </li></ul><ul><li>Manual push of reports to the factories by the LO </li></ul><ul><li>TO </li></ul><ul><li>Electronic legal PO delivery </li></ul><ul><li>Application connectivity linking internal and external supply chain partners </li></ul><ul><li>Direct collaboration between regions, LO’s and factories </li></ul><ul><li>Structured workflows for PO changes via a web collaboration tool </li></ul><ul><li>Unified system and documentation visibility to all PO lifecycle events </li></ul><ul><li>Direct access by factories to relevant PO information </li></ul>
    7. 7. What does Collaborative Planning look like? Planner Data WHS SCC Browser Browser Browser Nike Planner Factory Factory Nike Nike Collaborative Planning 1 2 3 4
    8. 8. System Application <ul><li>How Does It Work </li></ul><ul><li>Manage change </li></ul><ul><li>Improve quality </li></ul><ul><li>Collaborate </li></ul><ul><li>Access file from everywhere </li></ul>
    9. 9. System Application - Feature <ul><li>How Does It Work </li></ul><ul><li>Manage change </li></ul><ul><li>Improve quality </li></ul><ul><li>Collaborate </li></ul><ul><li>Access file from everywhere </li></ul>
    10. 10. Resources/Budget When : April; July/August (1-2 days) What : Design Feedback/ Process Definition sessions When : September (1-2 weeks) What : Testing (SIT) & Train the Trainer When: October-November (1 week) What: Go live Training/Planning <ul><li>Resources: 1-2 super users per factory, 1-3 super user per Liaison office. </li></ul><ul><li>Key tasks : Data analysis/simulation, Communication, Testing, Training, Go live support. </li></ul><ul><li>Resources need to be available September-December </li></ul><ul><li>IT requirements : Server, Computer Pentium III, lease line, SAP. </li></ul>
    11. 11. Anticipated Impacts to Manufacturing/Planning <ul><ul><li>Planning Resource Expertise within Factory </li></ul></ul><ul><ul><ul><li>Need to be able to plan for production </li></ul></ul></ul><ul><ul><ul><li>Execute to specific dates successfully </li></ul></ul></ul><ul><ul><li>Planning tools/systems within factory need to be assessed </li></ul></ul><ul><ul><li>New Reports </li></ul></ul>What & Why
    12. 12. Key Success Factors <ul><li>Partnership on addressing key identified risks; </li></ul><ul><li>Commitment from Top Management to all employees to implement this system successfully </li></ul><ul><li>Commitment of Super Users in key project activities such as testing, training and education. </li></ul>
    13. 13. Questions?