Scm And Erp Implementation At Nike Commerce Essay

Scm And Erp Implementation At Nike Commerce EssayNike, Inc. is an incorporated company which designs, progresses and markets worldwide athletic, footwear, apparel, equipment and accessories. This company is a large publicly traded sportswear and equipment supplier which is based in United States. And it is the worlds leading supplier that supplies athletic shoes and apparel and it is a major manufacturing business of sports equipment with revenue all over $18.6 billion in year 2008. In that year Nike employed more than 30 000 people worldwide. 1In 1964 the company started Blue Ribbon Sport which was founded by athlete Phil Knight and his coach Bill Bowerman.PRODUCTSNike produces a wide range of products, such(prenominal) as shoes and apparel for sport activities like football, tennis, running, basketball, golf, combat sports, and American football for men, women and children. The first product of Nike was track running shoes which ware released by Nike in 1987.Some of the companys s hoes reduce weight because they contain go away wire and Linarite Foam.In 2010 Nike collection were worn by university teams like Miami, Alabama, Florida, Oregon, West Virginia, Pittsburgh etc.NIKES SUPPLY CHAIN MANAGEMENTSupply Chain Management or (SCM) is the management of the entire value-added cosmic string, from the supplier to manufacturer right finished to the retailer and the final customer. Three primary goals of SCM are Reducing inventory, increasing the transaction further by exchanging data in real-time and increasing sales by executeing customer requirements more efficiently. 3 Shortly, SCM is a business network converting from buying, making, moving, and warehousing to selling.The aim of Nike was to do their products different or unique from otherwise shoe producers thats why the come out chain management of Nike focused on that by maintaining its relationship with its suppliers in baffle to be able to do its production process better. Nikes supply chain includ es all the activities, such as goods and services from the raw material stage, assembly, manufacturers, warehouse, parts suppliers, and statistical distribution to the end-user whose primary goal is to maximize the value and shareholder wealth of the company.Supply chain management brought certain benefits to the company. Costs from outsourcing allowed Nike to focus on its core competencies such as product design, marketing, and Air Sole technology. Relationship of company with its suppliers made it contingent for them to have better quality product with low costs through reduced administrative and payroll costs. Nikes variety of 860 suppliers let them flexibility, besides allowed them faster service in cases of emergencies and quality standard. The technologies of Nike like transferring data, orders, communication via internet and databases let them bring about and meet the demands of customers in a timely manner and at the same time allowed them to have a good inventory and moni toring control.Nikes supply chain was confronted with many obstacles. One of the reasons was an expensive implementation of technical components another reason was having too many suppliers which can lead them losing control of inventory and operations management. A fault of some shoe parts suppliers can result delay in its supply chain process non implementation of suppliers of Nikes can once again dispose of the public perception of the company and also trend forecasts and unstable economy may affect consumers need.I2 SOFTWARE IMPLEMENTATIONIn 1999, Nike Inc. decided to implement the first part of the supply chain strategy. So they decided for demand and supply chain planning application software from i2 technology. 4 The cost of this strategy was $40 million. The strategy of Nike using i2 software was to help the company to enable them resolve and detect any problems effectively, to per edition effective business planning, and help them to match the supply with demand by mapping out the manufacturing of specific products.REASONS FOR I2S SOFTWARE FAILUREThe failure was heartwhen the company announced that they had profits of $97.4 million and this sum was 48 million at a lower place from their earlier forecast for the third quarter ended February 28, 2001.They also mentioned that this revenue short fall was caused from the supply chain software that wasinstalled form i2s Technologies. By the way this failure affected companys reputation as an innovative user of technology. Some problems that were caused from the i2 software were as followsIntegration it couldnt integrate with SAP ERP, the integration was required to be with ERP, SCM and CRM but this didnt happen in i2 SCM that was working so isolated.Customization there was a high customization demand forecast which caused system operations to be very slow.Deployment using legacy system the complexity for entering input information by the lack of integration in several languages and also subsystems results in crashes, bugs, enormous delays.There was no realistic time of goals because there was an extreme pressure In timelines , this result in low level of testing before going alive and may be pushing the probability of errors.And the following problems were that the software was giving inadequate information, the market condition begins to change and NCS project leg and as a result of all this review of meetings.After all this problems the Nike and the company that produced software were pointing finger at each other. Software Company give tongue to that they had some specific templates and methodology for use and we always recommend to our customers to follow them but Nike instead chose not to do that. Also she added that Nikes problem is isolated hap and the other 1000 companies are not in risk.IMPLEMENTING SAP AFSThis time Nike decided to implementspecificallydeveloped software forapparel and for footwear industriousness the software called AFS which was a variant of the SAP R /3. With the singleInstance Strategy, Nike begin using SAP AFS application across all the geographies where Nike is sold and ,on the other hand they also decided to chose to implement the other SAP applications which includeSupply Chain management (SCM) and Business Information warehouse which was considered a cowcatcher test of SAP Net Weaver platform for the near future. The company thinks that the single Instance Strategy would result in better integrationand alsoprovidea competitive edge by enabling holistic view of its business.BENEFITSNike spent six years and $500 million on the project. In 2004 the 80% of the project was completed, and the company gained several benefits from the project. The benefits were dividingbetter financial managementimproved theirrevenue offorecastingdecreased the inventory levelquick manufacturer and design processDirect BenefitsBetter integration between departmentsImproved level of decision makingBetter visibility into costumer order legal procee dingNon-quantifilable benefitsCONCLUSIONAsa conclusion we can say that every company leers by their mistakes even though this mistakes cost a lot.As we discussed below one of the biggest mistake of the Nike was choosing a poor quality company that had never designed such big software and tried first time on Nike and when the problem occurred they werent able to accept their faults. By the way also we learned the importance of pilot test because of the pressure they couldnt test the software and they faced a problem such thatthe lose was felt 9 months in the company. There was a vision gap in the company, where the role of forecasting wasnt clearly delimitate and it had a hard influence on supply chain management. And finally if there existed anyexperienced external consultant, both previous problems wouldhave been managed.