Supply Chain Management

Framed by :
Presented by : Khalid ES-Sandi Mr Taoufiq
Lamsidi
It started with a handshake. Two visionaries, Bill Bowerman
and his University of Oregon runner Phil Knight, thought
they could do a better job of designing and selling shoes to
runners. They were right.
Today NIKE, Inc. is the world’s leading innovator in athletic
footwear, apparel, equipment and accessories.
 World largest seller of footwear, sportswear, clothing and
sports equipment supplier

 Headquarters – Oregon, USA

 Sponsors many high-profile athletes and sports teams

around the world.

 Nike has extremely strong supply chain relations

• Elevating product excellence and innovation at the factory
level.

• Helping to lead industry efforts to integrate sustainability

into product creation and manufacturing.

• Managing sourcing through a balanced approach, taking

into account environmental, social, quality and cost impacts.

• Developing and testing new models of manufacturing that

serve to improve worker compensation, skills and livelihood.

• Consulting with, coaching and building capacity with contract

factories to optimize labor and environmental capabilities.
 • Nike has a reputation for designing not manufacturing their products,
the manufactures are outsourced

• Nike hired subcontractors (are individuals who performs a specific

task as part of the overall project and is normally paid for services
provided to the project by the originating general contractor) in
China, Indonesia, Vietnam and Thailand

Why?
to reduce costs or to mitigate (Reduce) project risks

• As well as independent factories in Argentina, Brazil, India and South

Africa to manufacture their products
• The reason for outsourcing is lower wages and lower costs of
production than its in the United States

• This strategy resulted in cash savings generating more profit

• In the these countries employees put 40 to 50 hours of

overtime per month
• Nike manages demand for its products by use of futures
program that requires retailers who stock Nike’s products
to order 80% of their inventory six months in advance in
order to be guaranteed delivery.

• According to the futures ordering system (Innovation)

permits Nike to lower levels of inventory held, time spent
in fulfilling retailers’ orders as well as the non delivery risk
 The principles of lean are aligned with sustainability best practices such
as

Reducing resource use and waste

Valuing the workforce, and reducing downtime
All managed under a continuous improvement system

• This can lead to both increased worker satisfaction and gains in

business performance.
 • Transparency enables collaboration. And collaboration is essential to
building sustainable and self sustaining supply chains.

• Our aim is to build business partnerships characterized by long-

term, trust-based, transparent interactions.

• Nike remain Committed to sharing Data About their suppliers.

• Example
Nike Manufacturing Map
 At the end of 2011, 80% of footwear, 57% of apparel and
11% of equipment was made at Nike’s contract factories
using processes meeting Nike’s minimum baseline
definition of lean.
In addition to their phenomenal sales, Nike has marketed
itself so thoroughly that it has literally become a household
name.
• The company has no control of the inventory since it has
too many suppliers.

• The company does not own any manufacturing plants &

focuses on outsourcing production

• Uses a large range of In developing countries where low

wages and child labour conditions are being adopted
• Over the years Nike has taken it’s toll of criticism over
these issues

• In response they have set out a new code of conduct

• All suppliers have to comply with code with the help of

training from Nike adhering to society’s/customer’s
expectations and standard. In an aim to heighten CSR.

• In some products cases there are some expensive

technical components and their implementations