Nike: A System Thinking Approach to Inventory Management Issues

This report provides an analysis of Nike's operational and inventory management challenges, focusing on issues such as excess stock and shortages that have impacted the company's performance over the past decade. It explores the application of systems thinking, specifically the CATWOE framework, to understand and address these complex problems. The report examines the roles of customers, actors, transformation processes, world view, owner, and environmental constraints within the Nike context. It also utilizes Rich Pictures to illustrate the problem situation and root causes within the supply chain. The study highlights how systems thinking can facilitate the development of interconnections between various operational contexts, decision-making, and employee actions to drive organizational improvements. The conclusion emphasizes the effectiveness of the systems thinking approach in resolving inventory management challenges.

Running head: MANAGEMENT 1
Management

MANAGEMENT 2
Introduction
The operation manager of Nike has faced several issues regarding operational issues
and inventory management. It can be observed that for the last 10 years, the company has
been facing excess stock and shortages in the inventory, which has created several issues in
the bottom line performance of the organization. On the other hand, the company has been
also facing severe competition in the market because of the multinational firms and thus
matching themselves with the core demand of the customers (Abidin, Jaafar & Alwi, 2019).
Implication of the Catwoe System Thinking Tool
It can be noted that Nike has adopted Catwoe System thinking tools for
acknowledging and expressing of the diverse situations within the workplace. There are some
of the key elements in the Catowe system thinking tools, which are Customers, Actors,
Transformation Processes, World View, Owner and Environmental Constraints. Each of the
elements of the system thinking tools have been described below
Customers: Mainly the athletes are the customers of Nike and it is associated with the direct
customer problems and these need to be addressed immediately and thus avoiding serious
consequences. There are some of the problems those are much helpful for finding out the
resolution.
Actors: The situations can be expressed with the help of the diagrams and through the
creation of the preliminary mental models. It is understood that the organization has used the
Catwoe for the closed discussion and it portrays how the organization has come to a
conclusion, shared and broad understanding of a critical situation.
Transformations Processes: It can be noted that the system thinking approach is consisted
and developed with the help of the positivist and reductionist thinking and it is also build up
with the core holistic manner.
World View: The system philosophy is also one of the important parts and it forms the
interactions and linkages between the elements that comprise of the whole system at the same
point of time (Delgado et al., 2019).
Owner: System thinking has been adopted by Nike and it is one of the approaches that help
the company to integrate over the belief that the specific component will act differently at the
time of changing the market (Abidin, Jaafar & Alwi, 2019).

MANAGEMENT 3
Environmental Constraints: Within the environmental constraints, there are some of the
elements which includes available resources, budget followed by the laws and regulations. It
also includes six prolonged approaches which helps the operation management of Nike to
solve various problems at the same point of time.
Figure 1: CATWOE System Thinking Tools
(Source: As Created by the author)
Customers
Actors
Transformations
Processes
World View
Owner and
Environmental
Constraints

REAL WORLD
SYSTEMS
THINKING
1. The Problem
Situation:
- Unstructured
2. Problem
Situation:
Expressed
(Rich Picture)
7. Action to
improve
Problem
Situation
6. Feasible and
Desirable
Changes
5. Comparison of
Rich Picture
and
Conceptual
Model
4. Conceptual
Models3. Root Definitions
of
Relevant
Systems
4a. Formal
Systems
Concept
4b.Other
Systems
Thinking
MANAGEMENT 4
Implementation of Rich Picture
Figure 2: Rich Picture for the issues related to the Inventory Management
(Source: As Created by the author)
Root Problem of the Nike supported by CATWOE
In recent times, it can be noticed that the supply chain management of Nike was
disturbed along with its procedures and outlines. It is because, at the testing time, the
employees have not given much emphasis on the planning and production at the same time.
On the other hand, it can be observed that Nike has adopted the system thinking approach
more making the products and services for innovative and inventing new ideas for running.
The company has become much more innovative and they have launched their new venture
Digital Plus and the Nike+ programs for the runners (Mjema, 2018).
During the time span of almost 10 years, Nike has been facing a various range of
problems that can be included within the operational issues that are related to inventory
management. With the help of the system thinking approach, Nike has developed the
interconnections between the 1main contexts and connections and it has also formed a deep
inter-relationship between the two components which are the decision of the managers and
the work done by the employees for the further benefit of the company. Moreover, the

MANAGEMENT 5
perspectives and the boundaries are the important elements which includes the core unique
perception of the situation and the boundaries, by which the improvement of the organization
is much existent within the business environment (Abidin, Jaafar & Alwi, 2019).

MANAGEMENT 6
Conclusion
Nike has been facing problems, those are regarding the excess stock and also the time
shortages from the inventory. These have been one of the crucial issues for the business entity
and for solving this kind of issues and problems, the system thinking approach is much valid.
On the other hand, it is understood that the issues can be solved from a perspective but cannot
get solved by an actor (Detand, 2018).

MANAGEMENT 7
References
Abidin, N. Z., Jaafar, I. A., & Alwi, A. (2019, August). The application of system thinking in
solving complex problem: A case study of dengue transmission control policy. In AIP
Conference Proceedings (Vol. 2138, No. 1, p. 040001). AIP Publishing.
Delgado, D., Webb, A., Prouty, P., Trotz, M., Zarger, R., & Ergas, S. (2019, July). A Novel
Community Engaged System Thinking Approach to Onsite Wastewater Treatment
Management for Nutrient Pollution in the Belizean Cayes. In ACS Fall 2019 National
Meeting & Exposition in San Diego, CA, August 25-29, 2019.
Detand, J. (2018). Co-creating real-life experiences through the dialectic of system thinking
and design. In 3rd International Conference on Design Engineering and Science.
Mjema, E. A. (2018). A System Thinking Approaching Maintenance, Production and
Quality. Tanzania Journal of Engineering and Technology, 26(2).