Nike Supply Chain Essay

Nike has been capable to become a global player in the industry of sports appargonl and athlete endorsements beca physical exercise of many antithetical factors that be knocked emerge(p)lined in the way they bring off their company. By analyzing the business plan of Nike we shadow see how their write out range of mountains is set up as is illust respectd above. The egress grasp is very definitive for the transfer of their goods from the supplier of raw materials to a manufacturer, thence to a distri unlesser, then to a retailer, to then be available for the customer. This work at is optimumly tweaked to provide the best mea indisputable out for their intersection point. One factor that Nike has strived to make as a standard for their company is the idea of reverse logistics. As we will analyze further, reverse logistics is how they atomic number 18 able to understand the demands of the demographic and correspond it to the manufacture of their goods. This is seen as a vital tool for product research and development at Nike. As we explore the different qualitys of the chain, it is important to keep your mind on the big picture and how this process comes to dragher.1. Contract SuppliersWhat Nike has enforced into their system with outsourcing the production of raw materials, has been done by many large app arl companies and is seen as something that can be highly profitable rather than producing the materials within the company. So what Nike has done, is brought in father suppliers from all over the cosmea alike Vietnam for instance. To help visualize this part of the process, we must understand that the supplier has its admit supply chain and it ends with exporting the products to Nike, which is where Nikes supply chain begins.In the 90s there were stark allegations of unethical practices carried out by Nike in terms of their Asian suppliers and how services were being carried out. In an driving to get away from this image that was painte d of them, Nike has taken strides to implement disclosure to how the supply chain is run. over the years, they had been using a push system to measure sustainability based on compliance from overseas suppliers. As of recently however, Nike has turned to a pull system which is focused around incentives for a well carried out process from their contract suppliers.With this system in place, Nike is closely watching the performance of theirsuppliers and valuation them in colorise with the best being gold and descending from silver, bronze, white-livered and red. Colors from bronze to gold are seen as successful and are given benefits and opportunities that would not be accessible to suppliers given a rating of yellow or red. These benefits and opportunities are seen as incentives for these suppliers and form the system they have created for managing sustainability.2. LogisticsThis part describes the movement of the raw materials from the contract supplier to the manufacturer. This i s usually done by either boat or plane and this rate varies receivable to the fact that Nikes manufacturing plants are located all over the world along with the suppliers. This is because of the global enlargement that Nike has utilise in the last a couple of(prenominal) decades.The parties responsible for this transportation are also measured on this new system of incentives. Nike closely records each transaction and is in touch with the supplier and manufacturer to get the best idea of how the transportation was carried out. These third party transporters are rated in the same way as the suppliers and are given rewards for well-magazined(a) deliveries of material.3. ManufacturerThis is the play in the supply chain where the raw materials brought in from the supplier are made into a concluding product which was designed by anxiety. This is an important step in the cycle because this is where the ideas set by the research and development team, which are influenced by the ta rget demographic, are made into reality and are kept until further movement of the product. Most Nike manufacturing plants arent designed to contribute a large amount of products as once which brings us to the following step.Nike has also been slamn to use manufacturing plant from a third party. Because of the fact that Nike is still responsible for these processes carried out by these manufacturers, they keep a close watch on the quality of the products produced. This is a very important part of the supply chain because it is where the product is built that will eventually be sold to the customer so it is important for Nike to kat once that these manufacturers areworth using. For measuring this, they have also been rating these manufacturers in the same ways they rate their other third party contracts for the different parts of their supply chain.4. LogisticsThe second time that logistics comes into play is when the final product has to be moved to a distributing warehouse. This step also depends on the location of points A and B for each situation due to how global the Nike Company has become. This transport of products is a crucial part in the flow of the chain to move the manufactured product to a place where it can be stored.Again, we are able to see the rating system built around incentives at work when we analyze the logistics mingled with the manufacturer and the distributer. It is highly possible that both the distributor and manufacturer was third party companies used in Nikes supply chain and so they have to be closely in tune with the dickens stages of the supply chain as well as the transportation in between. For this reason they record timely deliveries of products and of course look for damage and inconsistencies that the transportation company may be responsible for.5. DistributorThis stage in the chain is composed of either Nike warehouses set up to store their finished goods until it is demanded by a retail store or other vendor or a thi rd party distributor which would serve the same function. Oftentimes, a third party is used for this step but this all depends on the most cost effective and logical method of distributing the products at hand. This decision is made by commission and is carried out as part of the supply chain. The warehouse would hold the product for as long as it is needed but due to how well measured out the manufacture of each product is carried out compared to their well estimated demand for the product, it is usually moved fairly quickly to continue the flow of the chain.Distribution is important because the final product needs to be stored before is sent to vendors. For this reason, Nike also works in observe the companies that work with them for warehousing purposes. To do this they closely analyze the inventory of their products being held at thesedistributors and make sure everything is kept by the books and reported back to Nike. The rating system is also in place for distributors to fa il measure this stage of the supply chain to make future decisions regarding what third party distributors they should use.6. LogisticsFor the third time in the supply chain, Nike has to move their goods to another part of the process. This time, the product has been stored in a distributing warehouse and is now ready to move to a place where it would be available to the customer. Nike is available all over the world and uses many different systems of transportation for bringing the product to the vendor.We have noted that the pull system in place for rewarding third party companies on merit which serves as incentives are very practically used by Nike to handle their logistics. This is no exception with the transportation of the finished goods from the distributor warehouse to the vendors. They are graded on the condition of the products when they arrive to the vendor and how efficiently and timely the delivery was just like in the other parts of the supply chain where transportati on of either materials or the finished product were needed.7. Nike stores/ Retail stores/ Online storesThis is the first and only time in the cycle where the finished product becomes accessible for the public. In todays world, there are many people whom shop online for most of their needs so it is important to mention the distribution of the products to online vendors such as Amazon whom keep the product in their own facility until it is ordered. Retail stores are still a big part of this step because many purchases are still made in stores around the world that are licensed to shell out Nike products. Finally, there are specific Nike outlet stores which get direct shipments from the distributor and exclusively sell Nike products. From here, the products are purchased by the customer, but the cycle does not end there.8. Reverse logistics/ Customer feedbackAn important part of Nikes supply chain and business plan is being in tune with the demands of their customers. This helps them to design new productsthat they hope will sell efficiently because of the feedback they received from their target demographic. This process is known as reverse logistics and can be implemented through blogs, ratings, customer support, and other services set up by Nike for this purpose.9. Product Development/ anxietyEven though this is the last step which I am describing, it is right in the beginning of the process where it comes into play and is where the cycle of reverse logistics and the supply chain meet. This is because the information collected from the customer feedback is researched by management and in turn is used to form a new design or designs. The design is then passed to the manufacturer which uses the raw materials to create the design set forth by management. This way, the cycle is continuous and efficient.This is the part of the cycle where innovations come into play. Ideas like switching to a pull system of managing sustainability are a found example of what mana gement is tasked with. Nike is constantly looking at ways to improve their processes. An example of this is how theyve worked on a shoe made to be lighter for athletes but also optimized to produce the least amount of chase away as possible. By utilizing a single thread to basically make the entire shoe. By doing this they were able to not only cut waste but also cut costs and therefore became optimal in multiple ways. Programs such as LAUNCH which was founded by Nike alongside with NASA and the US Department of land have been set up to encourage innovative thinking and ideas. These are just a few examples of the work being done by the people in charge of product development and supply and Nike says that their ultimate goal is a fully sustainable supply chain. Nike also hopes that their new rating system for parts of their supply chain will help them to soon have all the companies works with them to be rated a bronze level or above. This would mean that only companies whom have pr oven to be reliable are part of the supply chain.ReferenceNike, Inc. 2011. Sustainable Business Performance Summary. Available at http//www.nikeresponsibility.com/report/files/report/NIKE_SUSTAINABLE_BUSINESS_REPORT__ FY10-11_FINAL.pdfPaine, L. S., Hsieh, N., Adamsons, L. 2013. Governance and Sustainability at Nike. Harvard Business School Teaching Case.Porteous, A.H., Cohen, S. A., Lee, H. L., Rammohan, S., V. 2012. Maturity in liable Supply Chain Management, Stanford Stanford Global Management Supply Chain Forum. Available at http//www.gsb.stanford.edu/scforum/sisscrSchifrin, D., Carroll, G., Brady, D. 2013. Nike Sustainability and Labor Practices 1998-2013. Stanford polish School of Business Teaching Case.