NIKE TRACEABILITY

TRAINING

APRIL
2023
AGEND
A
• Review the Nike Traceability program

• Review requirements: Chain of Custody Standard

• Review requirements: Certified Materials

AGEND
A
• Review the Nike Traceability program

• Review requirements: Chain of Custody Standard

•
• Review requirements: Certified Materials
VISIO
N
Know The Journey of Every Product
From Field to Athlete* and Back
Again
WHY
TRACEABILITY?

Authenticit Sustainability Transparenc

y y
WHAT IS
TRACEABILITY?
Traceability is the ability to trace the history, application or location of an entity by means of
recorded identifications . ISO standard 9000:2015

Map all facilities handling

Nike materials = NETWORK

Trace lots of inputs to specific

finished goods = PRODUCT
FRAMEWORK &
APPROACH
Network Product Validation

Trace inputs for specific Verify supply network and

Map all suppliers
products from raw material to product traceability
for each material
finished good

WORK IN FLIGHT

Supply Chain Mapping Chain of Custody Standard Origin Verification Testing

Link supply chain partners to fully understand Nike requires suppliers to keep traceability records to Implement scientific testing to validate origin of
our multi-tiered network via Sourcemap verify chain-of-custody for all materials. materials

Certification Standards Process Review

Nike requires industry standard sustainability Assess adherence to standards; create process for
certifications to verify material content and remediation
shipments for Move to Zero product

TODAY
OVERVIEW: COC VS
CERTIFICATES?
Chain of Custody Standard Certification Standards
Why? Verify where materials come from for specific Ensure sustainable materials are verified.
products.
Certificates are a subset of docs in the Playbook.

Tiers T1, T2, T3, T4 T2, T3

In-Scope Materials Cotton, Polyester, Leather, Rubber, Foam All materials classified as sustainable: organic,
recycled, responsible, bio-based, etc.
FY24 Focus Materials Cotton and polyester, main body fabrics Recycled / organic cotton
Recycled polyester
Leather pilot Responsible / recycled wool

Documents Required Appendix C of Playbook Scope certificates and transaction certificates (TCs)

Document Collection System Box TrusTrace (launching in FY24 with AP suppliers)

Next Steps for Suppliers 1. Send out the Playbook within your company 1. Get certified (Textile Exchange and GOTS)
2. Align internal records to Appendix C 2. Create internal system to track TCs
3. Send the Playbook to all upstream suppliers
AGEND
A
• Review the Nike Traceability program

• Review requirements: Chain of Custody Standard

• Review requirements: Certified Materials

TRACEABILITY
LAUNCHED FEB 2023
PLAYBOOK
The Nike, Inc.
Traceability Playbook
explains:
 Nike’s vision for supply chain
traceability.
 A gameplan for mapping Nike’s
supply chain and working
together to improve the process.
 The rules of the game for
implementing Nike’s traceability
strategy — ensuring the journey
of each finished good is
documented.
NIKE
EXPECTATIONS
1.COMMIT TO PRODUCT TRACEABILITY AND SUPPLY
CHAIN TRANSPARENCY

 Maintain a single point-of-contact for traceability

2.COMPLY WITH THE RECORD KEEPING AND OPERATIONAL

PROCESSES SPECIFIED IN THIS PLAYBOOK*

 Map business processes to link batches of input materials to specific

finished good outputs using unique identifiers

 Ensure and maintain accurate digital records for 10 years

*Nike will release electronic training for Traceability Playbook requirements in FY24. Paid for by Nike, accessible to all suppliers.
NIKE
EXPECTATIONS
3.COLLABORATE WITH UPSTREAM PARTIES INVOLVED
IN PRODUCTION

 Send Traceability Playbook and expectations to upstream

suppliers

4. TIMELY RESPONSE TO NIKE REQUESTS

 When Nike activates the Traceability Playbook, provide documents

within 7 biz days
TRACEABILITY
RECORDS
Example: Certificate of Origin

Is the data sufficient?

NO: Reference PO# is

missing
TRACEABILITY
RECORDS
Example: Ocean Bill of Lading

Is the data sufficient?

NO: Reference PO# is

missing
TRACEABILITY Is the data
RECORDS sufficient?
YES: Multiple cross-
Example: Material Inventory / Release to Production references
 COC RECORD
REQUEST
WHEN NIKE SENDS A REQUEST, ALL RECORDS ARE REQUIRED

TO BE UPLOADED FOR A SPECIFIC FINISHED PRODUCT / MATERIAL WITHIN 7 BUSINESS

DAYS.

REASON NIKE ACTIVATES WHEN HOW

Respond to a marketplace request At any time Email from Nike or upstream partner with product
identifier, material, and upload instructions
Respond to an import requirement At any time Email from Nike or upstream partner with product
identifier, material, and upload instructions
Assess a supplier’s internal FY24 unless otherwise Onsite consultant
traceability program notified by partner E-learning
manager training

NOTE:
• Untimely responses will result in escalation within Nike.
• Records will be uploaded into a secure location for each supplier.
NEXT STEPS: CHAIN OF
CUSTODY

Respond within 7
Send to upstream Ensure your internal
Review days when
suppliers with systems comply with
Traceability instructions to comply Traceability Playbook documents are
Playbook requested

Immediately Immediately For finished goods being produced Upon request

for FA23 (in-market July, Aug, Sep)
AGEND
A
• Review the Nike Traceability program

• Review requirements: Traceability Playbook

• Review requirements: Certified Materials

WHY CERTIFIED
MATERIALS?
• Nike sustainability claims are for fiber and material

• Certification provides chain-of-custody and verification

• Regulators and marketplace partners require substantiation

• Materials certification is industry standard

WHAT IS A SCOPE
CERTIFICATE?
 Applies to entire facility

 Means the facility site may produce

certified material

 Issued 1x / year

 Issued by a certifying body (SGS, Control

Union, Intertek, etc)

Source: textileexchange.org
WHAT IS TRANSACTION CERTIFICATE
(TC)?
 Applies to shipment(s) of certified material

 Means a shipment of product is verified to

contain certified material

 Links certified facilities in chain-of-custody

 Issued on ongoing basis

 Issued by a certifying body (SGS, Control

Union, Intertek, etc)

 Cost* is per transaction certificate issued

(varies by geography and certifying body) Source: textileexchange.org

*Nike must have verification for sustainable material claims. Costs of TCs can be reduced by:
• Consolidating multiple shipments onto one TC
• Comparing estimates from multiple certifying bodies.
NIKE’S CERTIFICATION
APPROACH
SCOPE
 T2 – Fabric / Materials / Components
 T3 - Yarn Spinner

MATERIALS
 Cotton: recycled, organic
 Polyester: recycled
 Main body fabrics only for FY24

TWO TYPES OF CERTIFICATES

Source: textileexchange.org
 Scope Certificate
 Transaction Certificates (issued by spinner, uploaded by material supplier)
CERTIFICATE REQUIREMENTS:
COTTON Tier(s) Docs Equivalent
Required Required Certifications Required Certifications Notes

Recycled Required: T3, T2 Scope certificate Global Recycled Recycled Claim • AP: Main body fabrics only
Recommended: T1 Transaction Standard Standard 100 • FW: Upper textiles – largest volume
certificates • Move to Zero product certifications to be
uploaded in FY24

Organic Required: T4 Scope certificate Organic Content GOTS • AP: Main body fabrics only
(ginner), T3, T2 Transaction Standard (Textile • FW: Upper textiles – largest volume
Recommended: T1 certificates Exchange) • Move to Zero product certifications to be
uploaded in FY24
• Cotton blending program certificates to be
added FY25
CERTIFICATE REQUIREMENTS:
POLY Tier(s)
Required
Docs
Required
Certifications
Required
Equivalent
Certifications Min Requirements

Recycled Required: T3, T2 Scope certificate Global Recycled Recycled Claim • AP: Main body fabrics only
Recommended: Transaction Standard Standard 100 • FW: Upper textiles – largest volume
T1 certificates • Move to Zero product certifications to be uploaded in
FY24
CERTIFICATE REQUIREMENTS:
WOOL Tier(s)
Required
Docs
Required
Certifications
Required
Equivalent
Certifications Min Requirements

Recycled Required: T3, T2 Scope certificate Global Recycled Recycled Claim • AP: Main body fabrics only
Recommended: T1 Transaction Standard Standard 100 • FW: Upper textiles – largest volume
certificates • Move to Zero product certifications to be
uploaded in FY24

Responsible Required: T4, T3, T2 Scope certificate Responsible Wool • AP: Main body fabrics only
Recommended: T1 Transaction Standard • FW: Upper textiles – largest volume
certificates
• Move to Zero product certifications to be
uploaded in FY24
UPCOMING CERTIFICATION
SOFTWARE
OVERVIEW
Automated solution needed to
link specific lots of raw material
through to finished good
System will focus on certified
material compliance:
1. Gather scope certificates
and transaction certificates
from yarn spinner and
materials supplier
2. Link yarn certificates to
specific POs
TIMELINE
Today: Sneak peek of Nike
certification requirements
May 2023: Nike certification
requirements released
March-April 2023: pilot
software with 4 material
suppliers for 80 PO lines
June 2023: Scale-up schedule
finalized (AP then FW)
HOW DOES IT WORK
Supplier directly uploads the SCs
and TCs into TrusTrace (instead of
emailing)
TrusTrace automatically extract the
key data from the certificates
Supplier extends the Document-
based Chain of Custody when
certificates are missing
Software links material evidence
data to thousand of POs and
validate the information
HOW TRUSTRACE
WORKS
TRANSACTIONS TO BE RECORDED FOR NIKE ON THE PLATFORM

Yarn Inbound Transaction Fabric Production Transaction Fabric Outbound Transaction

These include all the yarn
Tier 2
inbound lots/shipments at
Facilities the fabric manufacturing
facility which are relevant
for Nike
These include all the fabric
production lots which are
relevant for Nike
These include all the fabric
outbound lots/ shipments to
the finished good
manufacturer facility which
are relevant for Nike

Fabric Inbound Transaction Finished Good Finished Good

These include all the fabric Production Transaction Outbound Transaction
Tier 1 inbound lots/shipments at These include all the These include all the
Facilities the finished goods finished finished
manufacturing facility which goods production lots goods outbound lots/
are relevant for Nike. which are relevant for shipments to Nike which are
These transactions will Nike’s POs relevant for Nike’s POs
automatically be recorded in
the platform based on the
outbound
transactions from the
fabric manufacturing
facility.
NEXT STEPS:
CERTIFICATES

Collect Transaction Prepare to Onboard

Secure Certificates from to Nike Certification
Get
Scope Certificate Spinners System
Certified*

Start immediately FY24

*Get started with certification here:

• Textile Exchange (http://www.textileexchange.org)

• Global Organic Standard (http://global-standard.org)
WRAP-UP
GET CERTIFIED
If you handle sustainable cotton,
poly, or wool and are not yet
certified, begin that process by
contacting certification bodies for
estimates.
Visit textileexchange.org and global-
standard.org to begin.
NEED HELP? Contact your PM/MM or traceability@nike.com
COLLECT TC'S
Begin asking for transaction
certifications for certified materials.
Input information into tech system
when available to support global
regulatory requirements.
INTERNAL SYSTEMS
Investments in internal ERP systems
will reduce overhead required to link
specific lots of incoming material to
individual PO lines.