SCM & ERP Software Implementation At Nike: from Failure To Success GROUP- E ARVIND ACHANTA HARINI CHODAGAM MANISH KHURANA MUDITA MEHROTRA NITHEEN PATRIC PRATEEK BAJORIA SAKET KHANDELWAL S P PARHI SWATI

Introduction: NIKE Supply chain management NIKE’S supply chain i2’s debacle Reasons for i2’s software failure Implementing SAP AFS Benefits Conclusion OVERVIEW OF THE CASE

Introduction: NIKE

Supply chain management

NIKE’S supply chain

i2’s debacle

Reasons for i2’s software failure

Implementing SAP AFS

Benefits

Conclusion

Introduction : NIKE Founded in 1957 by Philip Knight. Manufacture: Sports equipment Sports wear Apparels Accessory products Products sold in over 140 countries.

Founded in 1957 by Philip Knight.

Manufacture:

Sports equipment

Sports wear

Apparels

Accessory products

Products sold in over 140 countries.

SUPPLY CHAIN MANAGEMENT SCM is a business network covering from buying, making, moving, warehousing to selling Selling Buying Making Moving Ware housing

SCM is a business network covering from buying, making, moving, warehousing to selling

NEED FOR SCM

NIKE’S SUPPLY CHAIN In 1975, Nike introduced Future Program. Supply Chain Management was inadequate. 1998, Nike’s global operations were broadly divided into 5 geographic regions. Nike’s profit dropped by 50% from US$ 798 million to US$ 399 million. Launched NSC Project. Initiative of “Shelley Dewey”, Vice President of Supply Chain and Steele. Implement its ERP, Supply Chain, & CRM Software onto a single SAP Platform.

In 1975, Nike introduced Future Program.

Supply Chain Management was inadequate.

1998, Nike’s global operations were broadly divided into 5 geographic regions.

Nike’s profit dropped by 50% from US$ 798 million to US$ 399 million.

Launched NSC Project.

Initiative of “Shelley Dewey”, Vice President of Supply Chain and Steele.

Implement its ERP, Supply Chain, & CRM Software onto a single SAP Platform.

NSC PROJECT

NSC IMPLEMENTATION STRATEGY

i2’s Software Implementation First part of supply chain strategy. Cost of this project was US $40 million. To match supply with demand. To reduce the amount of raw material. Used it as a legacy system rather than as apart of SAP ERP project.

First part of supply chain strategy.

Cost of this project was US $40 million.

To match supply with demand.

To reduce the amount of raw material.

Used it as a legacy system rather than as apart of SAP ERP project.

i2 Trade Matrix Plan Solution Solution Objective Challenge Capability Benefit Strategic Planning Maximize profitability by optimally allocating resources Unclear parameters Optimization Long term profitability Demand management Anticipate and influence demand Accurate demand estimation is difficult Demand planning, channel collaboration Improved customer service Supply planning Determine what to make and when and how to profitably distribute supply Size and complexity of problem Collaboration, optimization, Speed Global visibility and coordination , fast reaction to changes Production Determine what to produce and when Managing material & capacity trade offs is complex Fast finite material & capacity planning & scheduling Reduced inventory, Improved due date performance

REASONS FOR i2’S SOFTWARE FAILURE Third party integrator. Inexperience of i2. Customization. Trying to forecast too far out ahead. Pilot test.

Third party integrator.

Inexperience of i2.

Customization.

Trying to forecast too far out ahead.

Pilot test.

Continued. . . Problems in smooth integration. Inadequate information. Changing market conditions. Complication of NSC project. Review meetings.

Problems in smooth integration.

Inadequate information.

Changing market conditions.

Complication of NSC project.

Review meetings.

Implementing SAP Apparel and Footwear Solutions (AFS) SAP ERP Project R/3 Variant Single Instance Strategy Purchased in1998 Big Bang Approach

Continued. . . Transition Plan, Training & Testing Close Partners-hip Built a Global Template Implementation

i2 Software After Learning the Lesson Just Do It The SAP AFS

BENEFITS

Measures to overcome demand forecasting problem

Importance of demand forecasting Determining the quantities. "make to stock" rather than "make to order“ Reduces supply time. Efficient forecasting

Determining the quantities.

"make to stock" rather than "make to order“

Reduces supply time.

Efficient forecasting

Ways to avoid supply chain problems

Lessons Learned Be Patient Define a business Goal Re-engineering Process Just Do It Over Keep your eye on the price

Be Patient

Define a business Goal

Re-engineering Process

Just Do It Over

Keep your eye on the price

CONCLUSION Implementation is a complex process. Evaluating pros and cons. Continuous assessment. Adaptability Importance of pilot test.

Implementation is a complex process.

Evaluating pros and cons.

Continuous assessment.

Adaptability

Importance of pilot test.

Thank you Just do it