Business Operation and Logistics Review 2022

Business Operation and Logistics- NIKE 1
Business Operation and Logistics- NIKE
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Business Operation and Logistics- NIKE 2
Part A
Introduction
In the global business market, business operations and logistics management is not a simple task.
With distribution centers, factories, stores, and offices deployed in different countries,
multinational firms take the responsibility of coordinating all supply chain operations across a
global supply chain. According to (Mallory, 2016, p. 5), supply chain management refers to
the field of business operations and logistics management in which the flow of products,
services, and information across a network of enterprises, customers, and supply chain partners is
done. In the coordination of these diverse operations and logistics, companies have to minimize
expenses/ costs, improve and maintain high quality, manage human resources and operations
processes, and continuously endeavor to launch new methods and strategies of competing in this
highly competitive and dynamic global market (Distelhorst, et al., 2016, p. 710).
Overview of NIKE
In order to explore the models, approaches, and techniques of solving operations and business
logistics problems, this report will consider a company that has faced operations and business
logistics problems in its supply chain for the past years. Nike, Inc. is a major footwear and
apparel manufacturer operating in more than 160 countries (Mallory, 2016, p. 8). Currently,
Nike runs 719 factories, recruiting approximately one million employees worldwide. At the
moment, Nike is among the world’s leading manufacturer, supplier, and seller of sports
equipment and athletic apparel (Goel, 2014, p. 24). The aim of this report is identifying an
operations and logistics business problem and solving the problem by applying the right
approaches, models, and logistics techniques. To achieve this objective, the report will

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concentrate on inventory and scheduling business unit of Nike and investigate the problems
surrounding this unit in the company. Last, the report will discuss the improvements proposed by
the operations and logistics management of Nike and propose a system to ensure maintenance of
this system; and also discuss the assumptions taken as well as the visible limitations of this
proposed system.
Operations and Logistics Business Problem
In order to come up with the appropriate models, approaches, and techniques to solve the
operations and logistics business problem as required in this report, it is vital to identify the
problems that Nike face in its inventory and scheduling business unit. According to (Russel &
Taylor, 2015, p. 60), addressing inventory and scheduling problems faced by Nike requires a
proper consideration of the company’s supply chain and logistics management strategy and
design.
Inventory and Scheduling Business Unit
As highlighted above, this report concentrates on the operations and logistics problems facing
Nike’s inventory and scheduling business unit. There have been inventory control problems at
Nike, and these inventory control mistakes result to scheduling problems in its supply chain. As
a manufacturer, Nike faces the following inventory management and scheduling problems:
i. Increase in reverse logistics costs;
ii. Management of multiple stores and warehouses;
iii. Lack of stock rotation resulting to outdated inventory;
iv. Poor supply chain planning and logistics execution; and
v. Generation of inaccurate demand forecasts

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In the inventory management and scheduling business unit, Nike is faced with dynamic demand
fluctuations that make it difficult to satisfy market demand while fully minimizing other stock
management and logistics related costs (Distelhorst, et al., 2016, p. 722).
Approaches of Solving Inventory Management and Scheduling Problem at Nike
According to (Gerpott & May, 2016, p. 60), the primary issue facing Nike’s supply chain and
logistics is inventory management and scheduling which also affects its demand forecasting.
Solving this issue of stock management and scheduling requires the management of Nike to
consider their supply chain design and management perspectives. In this segment, an exploration
of the approaches, models, techniques, and strategies that Nike can implement to effectively
resolve the persisting problems associated with inventory management and scheduling as
highlighted above in order to achieve its global business operations strategy goals will be
undertaken (Goel, 2014, p. 25).
Accurate demand forecasting
According to (Chris, 2016, p. 2), inaccurate demand forecasting has been a disturbing
operations and supply chain issue for Nike. As per (Chris, 2016, p. 4), accurate demand
forecasting is among the most vital supply chain management components. This is because
production/ manufacture, procurement, scheduling, distribution, inventory, and ordering are all
determined based on future demand predictions. The fact that demand forecasting has never been
certain or accurate, Nike can use various techniques to raise their predictions accuracy. For
example is using the i2 technology forecasting software and quantitative methods such as linear
regression in the generation and validation of in-house data. Linear progression will help Nike to