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Supply chain innovation deck

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Supply chain innovation deck

  1. 1. SUMMER 2011NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION  
  2. 2. Agenda"I.  Overview of the business situation and innovation"II.  Supply Chain Innovation at Nike today"III. Best practices in innovation"IV. Go forward strategic options and recommendation" I.  Tactics for achieving vision"NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION  
  3. 3. Supply Chain currently faces the challenge of supporting substantial growth by 2020" Business Situation Opportunity Statement•  Lack of existing framework for •  In order to support a ~$40B innovation within the Supply Chain. revenue target by 2020, our Supply•  Opportunistic and reactive to best Chain organization will become an practice and trends, rather than industry leader in Supply Chain being first in market or the “trend- innovation. setter.”•  Slow to adapt •  Make change faster NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION   3  
  4. 4. But wait…what is innovation?" Innovation means continuous improvement Identify Problems Solve Problems Implement SolutionsFor a faster, more flexible, better informed, and proactive supply chainNIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION   4  
  5. 5. Agenda"I.  Overview of the business situation and innovation"II.  Supply Chain Innovation at Nike today"III. Best practices in innovation"IV. Go forward strategic options and recommendation" I.  Tactics for achieving vision"NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION   5  
  6. 6. Nikeʼs SC today: ~$20Billion and complex" Objective: Deliver the right amount of the right product at the right time to the right place, minimizing inventory risk and cost along the way" 12-18mths" Plan Design Source Develop Forecast Sell-In Buy Make Allocate Deliver Sell-Thru Clean up ~7K" ~1.1K" ~325M" ~240M "colleagues" factories" pairs" items" Nike business to grow to $40B by 2020 – Can’t double resources to double growth; Need to change thinkingNotes: Factory number is # of for Nike Inc from Supply Chain FY12-14 Strategy Presentation; Shoe count from Global FW Planning; pparel count based on June 2011 SCU presentation" NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION   6  
  7. 7. SC innovation has varied in the past, but is often challenged by daily business needs" Key Themes" Supporting Quotes"Supply Chain Innovation has “There have been pockets in the past where the supply chain has been innovative.”!varied by decade" “There have been successes and failures over the years! “When the company is growing fast, you donʼt innovate inInnovation has been a challenge the most efficient/effective way- it is more about trying toin supply chain as Nike grows keep up with the business.” !rapidly " “The systems and processes suck up all our time and energy.”! “We want to be a leader in all aspects [including supply chain innovation]!Appetite for supply chaininnovation exists, but viewed in “Think more about approaching innovation as a problem solving exercise - & sometimes you innovate.” !different ways" “If I had a dollar to put against innovation in the company, Iʼd put it in Product.”! NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION   7  
  8. 8. Past experience in SC innovation at Nike demonstrate a mix of successes and failures"   Overnight shipping"   Future Vision 2- " implementation of " ×  I2 supply chain management system Nike tried to implement in 2001. "  RoamBi- digitize reports " and consolidate data within " categories"   Origin of the futures model-" Keeping up with fast growing " categories." Goal: increase ideas and hit rate of innovation" in the supply chain organization" NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION   8  
  9. 9. An innovation framework…" …to inspire a more innovative culture" NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION  
  10. 10. Agenda"I.  Overview of the business situation and innovation"II.  Supply Chain Innovation at Nike today"III. Best practices in innovation"IV. Go forward strategic options and recommendation" I.  Tactics for achieving vision"NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION   10  
  11. 11. Innovation at our finger tips" It is all around us! Innovation with walking distance… …and at the click of a mouseGlobal Brand Innovations" Leading innovative companies in the marketplace:! Byron Merritt – Creative Director" JR1 - .35 miles - 7 minutes"Global Content and Digital MediaDepartment" Jesse Stollak – Digital Brand and Innovation Director" JR2 - .4 miles - 8 minutes"The Zoo (Special Other Operations)" Aaron Cooper – Innovation Design Lead" MH1 - .5 miles - 10 minutes" 11NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION   11  
  12. 12. A few clicks later we discovered the fundamentals of innovation…" Innovation is rooted in problem-solving" Problem solving requires a supportive corporate culture "Dedication of resources: Proactive communicationtime, money, and for different perspectives"creativity" Empowerment of employee ideas"NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION   12  
  13. 13. …and a few steps later we learned about the components of innovation Cross-" Inside-out &" Pollination Outside-in Innovation Creative Space EmpowermentNIKE WESTERN EUROPE: UNLOCKINGTHE POTENTIALNIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY CHAINNNOVATION   SUPPLY  CHAIN  I INNOVATION 13  
  14. 14. Cross-Pollination:Leverage your neighbors. Analytics Brand HR Affiliates Synergy Supply" Chain" CRM Commerce/" product See Appendix B NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION   14  
  15. 15. Inside-out & Outside-inWe are stuck in the NIKE universe…"PROBLEM: Limited perspective and creativity"SOLUTIONS:" Outside-in Inside-out•  Inside-out: NIKE analyzes and provides POV on external organizations"•  Outside-in: External organizations analyze and provide POV about NIKE"See Appendix DNIKE WESTERN EUROPE: UNLOCKINGTHE POTENTIALNIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY CHAINNNOVATION   SUPPLY  CHAIN  I INNOVATION 15  
  16. 16. Empowerment" Innovation starts bottom up – empower people closest to the problem to innovate!" PROBLEM: Employees often view themselves as inferior and/or voiceless." SOLUTION! Goal: increase innovation Winner is presented with opportunity to implementEmployees have 6 monthsto submit a short business VENTURE business planplan summary to an onlinesharepoint website FEST Teams present to a panel COMPETITION of executive judges Finalists are selected and given a small start up Corporate fund entrepreneurship boot camp See Appendix C, F NIKE WESTERN EUROPE: UNLOCKINGTHE POTENTIAL NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY CHAINNNOVATION   SUPPLY  CHAIN  I INNOVATION 16  
  17. 17. Creative Spaces!NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION   17  
  18. 18. Agenda"I.  Overview of the business situation and innovation"II.  Supply Chain Innovation at Nike today"III. Best practices in innovation"IV. Go forward strategic options and recommendation" I.  Tactics for achieving vision"NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION   18  
  19. 19. So what does it all mean?"SUPPLY     INNOVATION   INNOVATION  CHAIN   NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION   19  
  20. 20. Innovation within supply chain should focus on evolution and optimization"3 levels ofinnovation What is it? Timing Proposed Owner •  Optimizing the current process •  Short Term •  Everybody involved through small improvements (<1 year) •  Kaizen mentalityOPTIMIZATION •  Substantial improvements in the •  Medium Term •  Global Supply Chain current process (1-5 year) •  Informed by a Supply Chain EVOLUTION Innovation framework •  Breakthrough disruptive innovation •  Long Term •  NIKE Inc. •  Completely different thinking or (>5 years) •  Touches the whole business process from current process •  External Innovation GroupREVOLUTION (e.g. Nike Innovation Kitchen) NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION   20  
  21. 21. Supply Chain Optimization" Everyone is involved" NN II KK Non-­‐judgmental   IncenBvizing  ideas   E  E   Job  Swapping   brainstorming   TT OO MD OA RY   R   O W   Share  Daily  Links   Central   Required  Reach   CollaboraBon  Space   Assignments   NIKE  EVOLUTION   NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION   21  
  22. 22. Supply Chain Evolution" Owned by Supply Chain Strategy Group" OPTIMIZATION NN II KK Category  /  Geo  Strat     Supply  Chain   Dedicated  InnovaBon   E  E   Plan  Review   Conferences   Employees   TT OO MD OA RY   R   O W   RotaBonal   Macroeconomic   InnovaBon     Development  Program   Trend  Analysis   Off-­‐sites   NIKE REVOLUTION NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION   22  
  23. 23. Supply Chain Revolution" Owned by NIKE, Inc."•  Revolution = state of change as a result of many lower-involvement initiatives•  Revolution ≠ change from a single idea or initiative•  External innovation group(s) outside of the supply chain help foster disruptive innovation, allowing evolutionary ideas to become revolutionary changes. SoluBon   External innovation groupFocus on optimization and evolution for revolutionary innovation NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION   23  
  24. 24. Digital is the future: " Integrate with every step." Digital is a catalyst for communication and information • Access more people more quickly – establish communication channelsOPTIMIZATION • Knowledge is borderless – establish insight/idea-sharing networks • Crowd-sourcing is easy with social – help consumers help you • A smart supply chain = smart forecasts – social chatter can inform demand predictions EVOLUTION • Nike is rapidly working to know its social communities – stay involved to stay ahead o  Appendix E • Digital can integrate systems to improve evidence-based decisions Right productREVOLUTION Social Real-time Informed decisions DisBll   Share   AcBon   Right place chatter Demand downstream Right time To think digitally, act digitally NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION   24  
  25. 25. Our Big Idea:" Small innovations  Lasting innovation Optimization Evolution Revolution • Non-­‐judgmental   brainstorming   • Job  Swapping   • RotaGonal   development  program     • Share  Daily  Links   • Category  /  Geo  Strat  Review   • Supply  Chain  Conferences   Goal: the most innovative • Central  CollaboraGon   • Dedicated  innovaGon   supply chain EVER employees   Space   • Macroeconomic  Trend  Analysis   • InnovaGon  –off-­‐site   • Required  reach   assignments   Competition = innovation: leverage the NIKE cultureNIKE WESTERN EUROPE: UNLOCKINGTHE POTENTIALNIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY CHAINNNOVATION   SUPPLY  CHAIN  I INNOVATION 25  
  26. 26. What will it take?" Key success factors SUPPORT TIME ENERGY RESOURCES Nike IS innovation:" It is up to YOU to write the future of innovation in supply chain. "NIKE WESTERN EUROPE: UNLOCKINGTHE POTENTIALNIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY CHAINNNOVATION   SUPPLY  CHAIN  I INNOVATION 26  
  27. 27. Evan Baechler Rory Blanche Tanner Gardner Bree McArdle Tierney O’Rourke Cydney Ross Marika Zumbro Summer 2011 Intern Cross-Functional Project 27NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL SUPPLY  CHAIN  INNOVATION  

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