Operations Management at Nike Company

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Operations Management at Nike Company
Student name
Institution
Unit Title

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Table of Contents
Executive Summary.....................................................................................................................................3
Introduction.................................................................................................................................................3
Transformation Processes........................................................................................................................3
The Four Vs.............................................................................................................................................4
Order Winners from the DESTEP analysis for Nike Company...............................................................5
Qualifying Factors from the DESTEP analysis for Nike Company.........................................................7
Process Types for Nike............................................................................................................................7
Production to Demand Ratio...................................................................................................................7
Modes of Capacity Management applicable for Nike..............................................................................8
Model for Inventory management...........................................................................................................8
Single Instance Strategy..........................................................................................................................9
Changes in Activities arising from Outsourcing for Nike Company........................................................9
Comparison of Advantages and disadvantages of customized systems.................................................10
Strategic and tactical critical success factors with regard to successful ERP implementation...............11
Conclusion.............................................................................................................................................11
References.............................................................................................................................................13

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Executive Summary
The operations at Nike Company are managed through an IT framework that regulates the
supply chain network of material and products of the company. By implementing a Single
Instance Strategy which was new to the industry, the company recorded a period of slow profit
growth due to the inefficiencies of a new system. However, the Company saw an increase in
revenue after fully integrating the ERP software that worked well with their strategy.
Transformation processes, placing orders by vendors and delivery of products became easier and
efficient. The following is a report on Nike Company supply chain strategy and implementation
of the same.
Introduction
Nike Company was founded in 1957 by Philip Knight. The Company mainly deals with
designing sports gear and quality athletic shoes for a range of sports. Nike has established its
operations globally by offering its products in retail stores located in different countries. The
company has also set up production units in different continents reducing costs and inefficiencies
of shipping raw material and finished products. With operations worldwide, the company needs a
supply chain management system that will ensure all deliverables are made on time. Inventory
control is also critical for the Company. Nike Company had to change its strategy in handling
operations so as to improve their services in managing the growing consumer demand.
Implementing an IT framework that looked to offer a solution to most of their issues worked for
the company.

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Transformation Processes
The transformation process in Nike involves creating a finished product from raw materials. The
company mainly deals with making sportswear equipment for athletes, their main product being
shoes. Raw material is sourced from different regions globally and is manufactured into finished
products in different factories located around the world. There is also a transformation process of
information among the employees working at Nike Company. Demand, supply and inventory
information is exchanged to enable an effective flow of activities within the company.
The processes that take place are; modification of physical characteristics of materials, change in
the location of material, change in ownership of goods and transformation of data and
information. Raw material used such as leather and canvas is turned into fine products that are
used in making the shoes, also the material and finished product (shoes) that is sourced from
different regions across the world, is moved from one point to another within the supply chain
creating a change in the ownership of the commodity. Information on goods in inventory and
orders from retailers is also processed into supply and demand data by the manufacturers and
suppliers. The transformation of the information is important to enable efficient distribution of
the material to manufactures who will use the information to make goods that are enough to meet
the customer demands, also the information is relevant to suppliers who ensure the goods
supplied meet the orders as requested by the retailers and manufacturers.
The Four Vs
When analyzing the four Vs (Volume, variety dimension, variation in demand and visibility) for
Nike Company, the volume of products completed by their operations is very large. The
company has retailers worldwide who sell their products which has a high demand from athletes
globally. Their units of production manufactures many shoes which is easy due to the