Report: Analyzing Nike's Supply Chain and Operations

This report provides a comprehensive analysis of Nike's supply chain, addressing its business operations, including sourcing, manufacturing, and distribution. It details the flow of information, such as costs, logistics, and human resources, across the supply chain. The report examines the company's inventory management and logistics strategies, including retail shops, online platforms, and third-party logistics. Furthermore, it suggests potential improvements, such as optimizing raw material sourcing by shifting transport costs to suppliers and enhancing online selling platforms through collaborations with established e-commerce companies like Alibaba. The report references several academic sources to support its findings.

NIKE’S
SUPPLY
CHAIN

Nike’s Business Operations
 Sourcing of the raw materials
 Manufacturing products
 Sorting the raw materials
 Designing
 Combining all components of a product
 Finishing
 Quality tests
 Distributing products to the
customers

Nike’s supply chain
CUSTOMERS
Organizations,
governments,
individual buyers

information flow at Nike
 Costs
 Manufacturing cost
 Labor costs
 Quality costs
 Marketing costs
 Distribution costs
 Raw materials costs

information flow at Nike
 Logistics
 Supply chain entails the processes of making
sure that goods are moved from one point to
another. Information about the best methods
to use and the infrastructure is essential, and
this is because it prepares the company to
move goods and raw materials from one point
to another (Khanna, 2015).
 Information about legal considerations and
requirements also comes in handy to make
sure that the company adheres with all rules
that are in place.

information flow at Nike
Human Resource
The information about the
human resource is essential in
the supply chain.
All operations are spearheaded
by employees, and that means
that there is a dire need to make
sure that the company gets to
know the labor that is needed to
make sure that effectiveness in

information flow at Nike
 Market
 In the case of the market, the information that flows is
about the demand of the products in the market, the
competitors, and the inflow of competitive products in
the market.
 The company supplies to meet the needs of the
customers and therefore it must have information on
how the market is performing (Khanna, 2015).
 Knowing the nature of the market helps the company
to know how to price its goods, the units to
manufacture at a specific time, the aspects of quality
to concentrate on, the type and quantity of raw
materials to focus on, and the best strategies of
availing the products to the market.

supply chain, inventory management, and
logistics
 Retail shops
 Retail shops are owned and run by Nike
 Online selling platform
 The company’s website is used for this
function
 Third party logistics organizations
 The third party deliver goods to
customers who have ordered online
 Examples are FedEx and DHL

supply chain, inventory management, and
logistics
Independent distributors
The distributors are all over the
world
They incur the cost of warehousing
Periodic inventory system
Stock is taken after a specific time
The process is easier
The process promotes efficiency

Improvements
 Sourcing of raw materials
 The first improvement would be associated with the
sourcing of the raw materials.
 Nike is an organization that is established, and its
manufacturing capacity attracts a lot of suppliers. The
company should take advantage of the high demand
that is evident when it comes to suppliers that want to
work with it and reduce the cost of transport (Haksever
and Render, 2017).
 The company should make sure that the suppliers of all
its raw materials assume the costs of transport.
 Doing so would not fail the ethical test, and this is
because Nike is also expected to cover the costs of
shipping its products to its distributors.

Improvements
 Online selling platforms
 The second improvement would be to work
together with online selling platforms.
 Nike has an online selling platform, but it is evident
that it cannot be as effective as other online
shopping platforms that are globally recognized.
 A good example, in this case, is Alibaba.
 Alibaba is a Chinese online shopping company that
has thousands of wholesalers from all over the
world, and they sell their products to customers in
all parts of the world (Knight, 2018).

References
 Hitt, M.A., Xu, K. and Carnes, C.M., 2016. Resource-based
theory in operations management research. Journal of
Operations Management, 41, pp.77-94.
 Kato, T., Nakajima, T., Saito, T., Okitsu, J., Shiga, Y. and
Miki, Y., Hitachi Ltd, 2015. Operations management
methods and devices thereof in information-processing
systems. U.S. Patent 9,128,704.
 Khanna, R.B., 2015. Production and operations
management. New Delhi: PHI Learning Pvt. Ltd.
 Knight, P., 2018. How 3D printing is changing the way
Nike approaches production and innovation. Available at
https://rctom.hbs.org/submission/how-3d-printing-is-
changing-the-way-nike-approaches-production-and-
innovation/