Nike's Supply Chain Sustainability Practices

This assignment examines Nike's approach to supply chain management with a particular emphasis on sustainability. Students will analyze Nike's strategies for reducing environmental impact, ethical sourcing, and waste management throughout its global supply chain. The analysis will draw upon provided resources including academic journals, company reports, and online articles, and should consider industry best practices and future trends in sustainable supply chain management.

GLOBAL SUPPLY CHAIN
MANAGEMENT

TABLE OF CONTENTS
Introduction..........................................................................................................................................4
Q.1 Evaluating how organization has performed in its efforts for sustainability by using the AAA
model...............................................................................................................................................4
Q. 2 What steps can retailers take in collaboration with Nike to decrease waste and increase
recyclability in the process..............................................................................................................6
Q. 3 Explaining what are the forecasting lessons that firm can use to reduce its exposure to
inaccuracies in its forecast...............................................................................................................8
Q4 Nikes approach to setting up supply chains and their structure and how it will help the
business to achieve a competitive advantage.................................................................................10
CONCLUSION..................................................................................................................................12
REFERENCES...................................................................................................................................13

ILLUSTRATION INDEX
Illustration 1: WRAP’s formula for calculating the true cost of waste................................................7

INTRODUCTION
Global supply chain management (SCM) can be defined as management of flow of goods
and services among the various countries. It includes many activities like transfer and storage of
various types of products from the beginning point to consumption (Fawcett, Ellramand Ogden,
2014). Nike is a US based organization which sells sport commodities like shoes and clothes to
consumers in the international market (About Nike, 2016). The present report describes how
corporation maintains its sustainability by using AAA model. Further, it explains efforts of retailers
to decrease the waste and enhance recyclability with help of Nike in the supply chain process. It
defines about the concepts of forecasting which are used by organization to reduce its inaccuracies
in its forecast. In addition to this, it introduces the approaches to set supply chain process and their
structure. It represents how firm achieves appropriate competitive advantages.
Q.1 Evaluating the way in which organization has performed its efforts for sustainability by using
AAA model
Awareness and assessment, acceptance and adaptation and accountability and attainability
contribute an effective role for the management of Nike to stay for a long time which helps to gain
more profit in the international market. Some of them are described as below in the points:
Awareness and assessment: It is an important concept for organization which aids to
maintain its sustainability in the global market. Global changes affect the organization rapidly
which affect its efficiency and performance in the market. In addition to this, supply chain managers
of Nike have to develop effectual strategies to reduce this impact in the international market (Tayur,
Ganeshan and Magazine, 2012). They should have expertise to develop long term objectives for
Nike. Further, they can develop strategy which can support various trends like cost efficient and
flexible business system. These trends can support the consumer differentiation as well as
environmental protection which can aid to increase sustainability for longer duration. They can help
the management of organization by making them aware about dynamic change in supply and
demand. So awareness and assessment can aid the corporation to take effective steps in adverse
conditions. For example, Nike can also understand social and environment issues which can help to
develop new strategies (Monczka and et.al., 2015). This process can help the organization to
increase its sustainability for a long period in the market. It can provide effective understanding for
Nike to reduce these types of complexities in a better way.
Acceptance and Adaptation: Acceptance and adaptation is an essential process for the
management of Nike to meet out their goals and objectives in the global market. In addition to this,
it required for the organization to adopt new changes because global trends like supply, demand as
well as market conditions are changing continuously. It helps in increasing efficiency and
performance of Nike as compared with its rivals. Further, Supply chain managers contribute

effectively to develop new strategies and plans as per the current changes which help to stay the in
the organization with sustainability. Further, acceptance and adaptation supports Nike to increase
the global supply chain operations in various countries (Supply Chain Management, 2012).
Generally, to adopt new changes, supply chain manager uses various types of new strategies to
manage its business activities. For example, management of corporation continuously analyzes the
global supply chain economics in a better way which helps to develop plans as per the market
situation. This process supports Nike to assess the global environment which is helpful to make new
plans for improving the exiting process by adopting new changes in the market (Wisner, Tan and
Leong, 2015). Further, it helps the management of corporation to increase the level of sustainability.
Accountability and attainability: It plays an important role in the organization by improving
coordination which helps to identify and prioritize the needs. In addition to this, there are many
elements which are accountable for Nike to improve its effectiveness in the supply chain operations.
This process contributes an effective role for organization to increase its sustainability (Winter and
Knemeyer, 2013). For example, management of corporation can use various types of strategies like
continuous monitoring. This process can help Nike to develop and adopt new changes at the work
place. In addition to this, organization can also increase its sustainability by integrating various
areas like planning, production, design, selling and movement as well as recycling process. These
activities can help Nike to manage its global supply chain operations in an appropriate manner.
Q. 2 Steps that retailers can take in collaboration with Nike to decrease waste and increase
recyclability in the process
Management of Nike can use lean production systems to reduce the waste of products which
can help to increase its efficiency and performance. Generally, organization can reduce the waste of
materials through these activities at workplace which are given below the points.
Overproduction: Management of Nike can analyse over production of its commodities through
identifying difference in supply and demand of its products in the market. This method can help the
firm to reduce waste by controlling on production of products at the plant. In addition to this, it can
help the corporation to increase productivity of Nike in the global market (Waters and Rinsler,
2014). This way, organization can manage its activities in a appropriate manner.
Waiting: This approach of lean production method can contribute effective role for management of
Nike to reduce its waiting time in during production of products. Further, it can help the firm to
increase its efficiency and performance by identifying appropriate ways to reduce waste of raw
materials. It can aid the management of enterprise to decrease production gaps during
manufacturing process.

Inventory (work in progress): This method can aid Nike to control supply level and work in
progress inventories of materials at plant (Brandenburg and et.al., 2014). Otherwise, it can increase
huge unnecessary carrying cost which enhances waste of products in the firm. In addition to this, it
can also contribute effective role for management of Nike to manage its inventories level which can
aid to decrease waste at the plant.
Transportation: Transportation can help the firm to reduce complexities during transportation of
raw and finished materials which can contribute effectively to reduce its wastage of products at the
plant. In addition to this, it can suggest management of Nike many transportation methods like
assignment matrix and linear programming to reduce the logistics costs which can contribute
effectively to decrease its cost (Pagell and Shevchenko, 2014).
Over-processing: This method can help the firm to reduce repair and unnecessary work by using
better quality levels and production techniques. Further, it can help the Nike to spoil raw material
which can aid to reduce the wastage of materials in the plant. In addition to this, it can be key
concept to increase production efficiency and improving quality methods at the workplace.
Motion: In this process, it can help Nike to find out appropriate speed which can contribute
effective role for to destroy raw materials during its motion. So this process can help the firm to
reduce waste of products during the production. In addition to this, it can also aid the organization
to decrease the its expenditure at the workplace.
Defects: This approach can help the firm to reduce the time of fixing the defects by improving
quality levels and production mistakes like machinery problems at the plant. Further, it can
contribute effective role for Nike organization to reduce wastage of materials by manufacturing of
effective finished goods at workplace (Fernie and Sparks, 2014). In addition to this, it can help
enterprise to reduce workload on its staff members during the production.
Workforce: Workforce can help the firm to increase its efficiency by providing appropriate training
on machines in the plant. Further, it can aid the firm to become its workers efficient in production
process at the workplace. In addition to this, it can help the Nike to increase its productivity by
reducing level of wastage of product during manufacturing process.
WRAP approach
This model can help the Nike to reduce waste and cost reduction. In this process organization can
cover five steps which are defined as follows.
Actions Description
Measure the waste Firstly, organization can try to find out total waste at manufacturing plant.

Cost it properly Then after, Nike can find out cost of this waste by using appropriate
techniques.
Set a target for
waste reduction
In the next step, organization can target its waste production to reduce it.
Take action on the
highest waste areas
Management of Nike can identify the high waste areas to decrease waste
(WRAP’s 5-5-5 approach to maximising waste reduction. 2016)
Prevention Then after, organization can develop strategies to reduce the waste at work
place.
Organization can use this formula to find out the cost
(Source: Calculating the true value of your waste. 2016)
How to increase recyclability in supply chain
Generally, there are many ways to recycle the product at the input and output level which
can help the Nike organization to consolidate supply chain process. Wit help of this thing,
management of corporation can repair its product which are damaged and destroyed during
manufacturing of products. For example, corporation manufacture shoes for its consumers in the
international market. In addition to this, Nike can also use plastic and rubber materials to
manufacture its shoes at the workplace because some of these raw materials are damaged during
Illustration 1: WRAP’s formula for calculating the true cost of waste

production process (Seuring and Goldbach, 2013). So organization can recycle rubber and plastics
products by using recycling procedure in the plat. Recycle method can increase the efficiency and
productivity of supply chain of Nike in the international market. Further, it can contribute effective
role for firm to reduce its unnecessary expenditure on the finished and raw material products which
can directly help to gain more profit.
In addition to this, management of Nike can increase its recyclability at output level in the
global market. To improve recycle process, organization can purchase scrap material from new
industrial consumers in a cheap price. For example, Nike recover 30 % plastics from plastics bottles
by buying from professional suppliers (Recycled Polyester, 2016). Further, corporation can recycle
of its raw material which can help to reduce its expenditure by decreasing quantity of new raw
commodities. This process can contribute effective role for Nike to improve its supply chain process
in the market. It can provide effective opportunities to use the recycling methods in a appropriate
manner. In addition to this, it can aid the firm to enhance its efficiency and performance of supply
chain operations in a better way. Recyclability at output level can also give opportunities to
consolidate position of Nike in the market (Winter and Knemeyer, 2013). In addition to this, it can
contribute effective role for Nike to increase its operations in new areas.
Q. 3 Explaining what are the forecasting lessons that firm can use to reduce its exposure to
inaccuracies in its forecast
There are forecasting lessons which are observed by management of Nike organization. It
helps the firm to reduce the inaccuracies in its forecast. Generally Business forecasting is very
useful process which play important role for growth of organization. It contribute effectively for
corporation to make production, financial, operational, as well as marking plan. In addition to this,
management of Nike faces many issues regarding forecasting which creates many problems to
manage its overall operations (Green and et.al., 2012). Further, it also create loss in profit due to
inaccuracies in forecasted sales in the international market.
Generally, management of Nike considered old data to forecast its future sales in the market.
consideration of old data was necessary factor but organization did not add new changes as well as
lifestyles aspects which created huge errors to forecast its future sales. In addition to this, these
practices learn proper lesson to organization which help the firm to perform appropriate forecasting
of sport products (Sarkis, 2012). Further, they provide effective aid to Nike for considering new
and old data together which help to increase accuracy in forecasting of future sales. It contribute
effective role for Nike to enhance its sales by reducing inaccuracies in forecasting of future sales.
Generally consideration of new and old also help the corporation to develop business strategies to
increase its profit and market share in the various countries.

In addition to this, management of Nike only measured few variables for the future
forecasting of sport products. Further, this process created complexities for organization to achieve
appropriate output in the global market (Ahi and Searcy, 2013). Due to this reasons, corporation
manufactured many new commodities which generated high loss in its income. These issues also
learn the management of Nike to consider maximum variables and aspects to forecast its future
sales. In addition to this, these practices contribute effective role for Nike organization to reduce its
complexities. Further, they also help organization to analyse approximate sales which aid to
increase its revenues in the international market (Ashby, Leat and Hudson-Smith, 2012).
Mainly, Nike did not perform proper market research in all countries which create issues to
analyse its future sales of sports products. In addition to this, it created issues for management of
enterprise to achieve goals and objectives in the international markets. Further, Organization could
not know proper needs and requirement of consumers which create issues to complete demand of
them (Zhu, Sarkis. and Lai, 2013). Further, it created issues for Nike achieve its target of sales as
per forecast in the international market. This process also learns lesson to firm for the proper
implementation of market research in the maximum areas. It helps organization to know about
maximum details of consumers regarding their requirements and needs. In addition to this, it aids
the Nike to meet out its target of future objectives by increasing its sales. Further, it contribute
effective role for management of organization to achieve effective market share by enhancing more
profit from consumers in the international markets (Morali and Searcy, 2013).
Management of Nike were highly dependent on qualitative forecasting methods like Dephi
method to forecast their future sales in the various countries. This method created high errors due to
lack of knowledge of marketing experts. As a result, organization did not meet with its future sales
due to many issues like demand and supply of products in the international market. Due to these
reason, management of corporation realised many problems for managers to manage their sales
operations in the various global areas (Govindan and et.al., 2014). These practices also learn lesson
to organization for using qualitative and quantitative forecasting methods for estimation of future
sales in the market. In addition to this, they contribute effective role for organization to get
appropriate result as desired. Further, they increases profit and revenues of Nike as compared with
its competitors. They help the organization to gain proper competitive advantages in the
international market.
Organization did not more consider environmental factors for forecasting of future sales
which created big issues in certain conditions. For example, management of Nike did not more
emphasize on the economic factors during forecasting of their future sales of sport products. Due to
these reason, Nike got huge loss in 2008 in many countries like USA, UK as well as Germany. In

addition to this, organization faced many issues regarding management of monetary funds for
further investment in the international market (Gold, Hahn and Seuring, 2013). These practices
learn effective lesson to Nike to add as well as emphasize on the various type of environmental
factors like economic, social, legal and political aspects during forecasting of futures sales. This
process contribute effective role for corporation to increase its sales as per the forecasted data. In
addition to this, it provide huge reliability to manage its sales operations in a appropriate manner. It
helps the Nike to increase its brand value as well as image in mind of consumers as comparison of
previous years in the international markets.
Q4 Nikes approach to setting up supply chains and their structure and how it will help the business
to achieve a competitive advantage.
Setting up Supply chain framework and structure of Nike
The supply chain framework and structure established by Nike consisted of three major
components. It can be classified as supply chain network structure, supply chain business processes
ad the management strategies (Albert, Werhane and Rolph, 2014). Further the network chain has
been categorized into different variables which are members of supply chain, dimensions of
structural configuration and links to various networks associated with Nike. The primary members
of the supply chain of Nike was developed to help all the autonomous companies to perform value-
adding activities in all the fields effectively. The main purpose of primary member is to generate
output in definite ratio through out the year. The other members of the chain are supporting
members which help in providing resources, financial assistance, assets, information and utilities to
the primary members. Structural dimension of Nike business organization helps in analysing and
managing the structural framework of the supply chain (Amini and Bienstock, 2014). The another
section which is responsible for developing and setting Nikes framework is horizontal and vertical
structures within the business organization. Horizontal structure contains number of tiers across the
chain of supply whereas vertical chain consist of suppliers or customers present I each tier. It is very
important to analyse the structure and framework of the organization before any modifications
because it ultimately affects the structure of supply chain.
For establishing a successful supply chain framework it is important to understand the
process and functions of activities taking place in business organization of Nike. The process of
handling different types of activities should be shifted according to the requirement so that proper
integration of activities is not affected (Lesser and Ban, 2016). Customer service management,
customer-supplier relationship, outflow management, manufacturing and supply, product
improvement and evolution, procurement services and commercialization are some of the major
elements of Nikes which play a major role in developing a successful supply chain framework. Nike

has also established four different types of links to support the business ad its ongoing activities.
They are links to process and manage business, business monitoring links, business links for non
management and links for non-memberships (Tachizawa and Yew Wong, 2014).
Links to manage and process business activities are those links which are considered
important for integrating different activities in Nikes business organization. This link connects the
Nike and the vertical component of supply chain framework (McGrath, 2013). Business monitoring
links have been designed to link Nike with other companies present in the market. Although this
link is not very crucial but is considered important for the existing organization. Non managed
business link is not involved in managing business directly but they play an important role in
assigning jobs to other member manufacturing plant. Non-membership links is developed to create
a connection between the Nikes organization and other non-members present in the supply chain
(Reed, Storrud-Barnes and Jessup, 2012).
How supply chain framework will help Nike to achieve a competitive advantage.
The main objective of Nike is to provide best quality service in order to satisfy the needs and
demands of customers. This will help in achieving competitive advantage through supply chain
framework (Tachizawa and Yew Wong, 2014). Competitive advantages for Nike are distinctive
marketing activities, extensive research with the aim to develop premium designs for athletes,
develop categorization in different products, innovation and evaluation and enhancing the
marketing performance of Nike. Following key points will help in achieving competitive advantage
by supply chain framework.
 With the help of supply chain framework, time compression strategies can be developed
which will help in reducing the time taken to meet the demands and supply of different
customers in the organization (Albert, Werhane and Rolph, 2014).
 All the activities which are not managed or do not provide any add up value to business are
identified and removed wit the help of business links for non managed activities.
 The horizontal and the vertical structure developed by the supply chain framework helps in
maintaining different functions and activities by implementing efficient policies ad rules.
 As globalisation affected Nike I a negative manner, global sourcing have automatically
deducted the rates in developing and under developed countries (Lesser and Ban, 2016). In
order to achieve positive impacts of globalisation on Nike it is very necessary to eliminate
all the web barriers which are created I supply chain framework.
 For increasing the marketing activities in both developed and developing countries it is very
necessary for Nike to focus on infrastructure and designing (McGrath, 2013).

 Due to poor infrastructure in developing countries it is very important to develop partnership
with 3PL providers because they have better knowledge and data on different organizations
present in the market. It also evaluate the ratio of demand and supplies to be met in order to
satisfy the needs of customers on time.
 With the help of different types of links designed by Nike all the tasks are managed
accordingly (Amini and Bienstock, 2014). Planning and integration of different promotional
activities by managerial links helps in innovating and evaluating multiple designs which is
preferred by athletes and customers throughout the world.
Supply chain theories which will help Nike achieve its competitive advantages
Just in Time (JIT): It is one of the supply chain theory which aims at reducing the flow time during
the production of different resources by Nike (Theories in supply chain management literature,
2016). This inventory strategy will decrease the waste and increase its productivity by receiving and
furnishing good only when it is required. This also helps in reducing the inventory cost to a greater
extent.
Material requirements planning: It is one of the most effective strategy which will help Nike
achieve its competitive advantages because it allows prior planning of different aspects utilised
during the manufacturing process. It includes listing, scheduling and inventory systems.
Total quality management: It is widely used strategy by almost all the organizations because it
helps in improving the ability and techniques to provide better service. This will help Nike in
achieving competition as people prefer those brands which provide best quality products
Agile manufacturing: This is one of the strategy which creates tools and techniques prior to supply
of any products so that it can help in delivering the products to the customers on time (Agile
manufacturing, 2016).
CONCLUSION
From the report, it is found that AAA model helps the Nike organization to increase its
sustainability for long time in the various countries. Further, it provides effective information to
management of corporation for adopting new changes as per marker conditions. Further, lean
production concepts like over production, transportation, defects and over-processing help the Nike
to reduce wastage of raw, work-in-process as well as finished goods at the workplace. It can be
concluded that previous errors of forecasting like consideration old data and qualitative forecasting
methods also contribute effective role for organization to improve its forecasting of future sales. It
helps the Nike to achieve effective market share and revenues by increasing sales of products in the
international markets. It includes different components which helps in establishing supply chain

framework for Nike business organization. Further, it is also explored and analysed how that
framework helps Nike in achieving its competitive advantages.

REFERENCES
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