nike supply sequence essay

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Nike has been capable of become a global player in the market of athletics apparel and athlete endorsements because of a number of factors which might be outlined in the way they take care of their firm. By inspecting the business strategy of Nike we can see just how their source chain is placed as is illustrated above. The provision chain is essential for the transfer of their goods from your supplier of raw materials into a manufacturer, then simply to a distributer, then to a retailer, to then be around for the customer.

This process is usually optimally tweaked to provide the biggest value for their product. One aspect that Nike has strived to make as being a standard for company may be the idea of reverse logistics. Even as will evaluate further, reverse logistics is how they can easily understand the demands of the demographic and overlap it to the manufacture of their goods. This is certainly seen as a essential tool intended for product research and development at Nike.

Even as we explore the several parts of the chain, it is necessary to keep your brain on the real picture and how this method comes together.

1 . Contract Suppliers

What Nike has executed into their program with outsourced workers the production of raw materials, has been done by various large clothing companies which is seen as a thing that can be extremely profitable rather than producing the materials in the company. So what Nike has done, is introduced contract suppliers from across the world like Vietnam for instance. To assist visualize this part of the procedure, we must recognize that the distributor has its own supply chain and it ends with exporting the merchandise to Nike, which is exactly where Nike’s source chain begins.

In the 90’s there were critical allegations of unethical techniques carried out by Nike in terms of their very own Asian suppliers and how providers were being completed. In an effort to move away from this image that was painted of these, Nike provides taken advances to put into action disclosure to how the source chain is run. Over the years, they had been using a “push system to measure durability based on complying from international suppliers. As of recently yet , Nike provides turned to a “pull system which is targeted around offers for a well carried out process from their agreement suppliers.

With this system in place, Nike is definitely closely viewing the efficiency of theirsuppliers and score them in colors with the best staying gold and descending via silver, fermeté, yellow and red. Shades from dureté to gold are seen while successful and are also given benefits and opportunities that would not be available to suppliers given a rating of yellow or red. These benefits and opportunities are noticed as offers for these suppliers and make up the system they have created for controlling sustainability.

installment payments on your Logistics

This kind of part details the motion of the unprocessed trash from the contract supplier towards the manufacturer. Normally, this is done by both boat or plane which step varies due to the fact that Nike’s manufacturing plants are located all over the world along with the suppliers. It is because of the global expansion that Nike provides implemented within the last few decades.

The parties accountable for this vehicles are also tested on this new system of bonuses. Nike strongly records every single transaction and it is in touch with the supplier and manufacturer to get the best idea of how a transportation was carried out. These third party transporters are ranked in the same way while the suppliers and are offered rewards for timely transport of material.

three or more. Manufacturer

This is the stage in the supply sequence where the recycleables brought in from the supplier are created into a last product which has been designed by managing. This is a crucial step in the cycle because is where the ideas set by the r and d team, that are influenced by the target market, are made in reality and are also kept until further motion of the merchandise. Most Nike manufacturing plants usually are designed to hold a large amount of goods as when which brings us to the subsequent step.

Nike has also been seen to use manufacturer from a 3rd party. Because of the fact that Nike remains responsible for these types of processes completed by these manufacturers, they keep an in depth watch for the quality with the products produced. This is a very important part of the supply chain since it is where the method built which will eventually be sold to the consumer so it is necessary for Nike to find out that these companies areworth applying. For testing this, they have also been rating these suppliers in the same ways they rate their other 3rd party contracts intended for the different elements of their source chain.

four. Logistics

The second time that logistics is necessary is when the final item has to be moved to a distributing warehouse. This step also depends upon what location of points A and B for each circumstance due to just how global the Nike Firm has become. This transport of products is a crucial part inside the flow with the chain to go the produced product into a place wherever it can be kept.

Again, we can easily see the ranking system developed around bonuses at work when we analyze the logistics between manufacturer and the distributor. It can be highly possible that both the distributor and producer was alternative party companies found in Nike’s source chain and they also have to be carefully in tune while using two stages of the supply chain as well as the transportation in the middle. For this reason they will record regular deliveries of goods and of course look for damage and inconsistencies which the transportation company may be responsible for.

5. Supplier

This stage in the string is composed of possibly Nike facilities set up to maintain their completed goods until it finally is required by a store or various other vendor or maybe a third party distributor which might serve the same function. Oftentimes, a third party can be used for this stage but this kind of all depends around the most economical and reasonable method of releasing the products available. This decision is made simply by management and is carried out included in the supply sequence. The factory would hold the product pertaining to as long as it truly is needed nevertheless due to just how well scored out the produce of each method carried out compared to their well estimated demand for the product, as well as moved fairly quickly to continue the flow from the chain.

Division is important because the final item needs to be placed before is usually sent to distributors. For this reason, Nike also works in monitoring the companies that work with them for storage purposes. To get this done they carefully analyze the inventory with their products staying held at thesedistributors and make sure everything can be kept by the books and reported returning to Nike. The rating system is also in place for distributors to better evaluate this level of the supply chain for making future decisions regarding what third party vendors they should make use of.

6. Logistics

For the 3rd time in the provision chain, Nike has to maneuver their items to another portion of the process. Now, the product has been stored in a distributing stockroom and is now ready to move to a place where it would be offered to the customer. Nike is available all over the world and uses many different devices of travel for bringing the product to the vendor.

We have noted that the “pull program in place for rewarding third party companies upon merit which serves as incentives are very much used by Nike to handle their particular logistics. This is no exception with all the transportation with the finished products from the supplier warehouse for the vendors. They are really graded around the condition of these products when they arrive to the vendor and how successfully and timely the delivery was the same as in the other areas of the supply chain wherever transportation of either supplies or the completed product were needed.

six. Nike stores/ Retail stores/ Online shops

This is the first and only time in the circuit where the completed product becomes accessible pertaining to the public. Nowadays, there are many people whom make an online purchase for most of their needs it is therefore important to mention the division of the items to on the net vendors including Amazon whom keep the product in their individual facility until it is ordered. Retail stores are still a big part of this step because many buys are still manufactured in stores all over the world that are qualified to sell Nike products. Finally, there are specific Nike outlet stores which in turn get immediate shipments in the distributor and exclusively offer Nike goods. From here, the items are purchased by the customer, however the cycle will not end there.

8. Invert logistics/ Customer comments

An important element of Nike’s supply chain and business plan will be in tune with all the demands of their customers. This can help them to style new productsthat they hope will sell proficiently because of the opinions they received from their concentrate on demographic. This technique is known as change logistics and can be implemented through blogs, evaluations, customer support, and other services create by Nike for this purpose.

9. Product Development/ Management

Even though this can be the last stage which I was describing, it really is right initially of the procedure where it comes into enjoy and is in which the cycle of reverse logistics and the source chain fulfill. This is because the info collected through the customer feedback is usually researched by simply management and in turn is used to form a new style or designs. The design can now be passed towards the manufacturer which uses the raw materials to produce the design set forth by administration. This way, the cycle is continuous and efficient.

This can be a part of the cycle where innovative developments come into play. Ideas just like switching to a “pull approach to managing sustainability are a perfect example of what management is usually tasked with. Nike is consistently looking at ways to improve their operations. An example of this is the way they’ve done a footwear made to be brighter for sports athletes but also optimized to generate the least volume of spend as possible. With the use of a single thread to essentially make the complete shoe. As a result they were capable to not only slice waste nevertheless also cut costs and therefore started to be optimal in multiple ways. Programs just like LAUNCH that was founded by simply Nike along with with NASA and the ALL OF US Department of State have been completely set up to encourage progressive thinking and ideas. These are generally just a few examples of the work made by the people in charge of application and supply and Nike says that their very own ultimate goal is “a fully sustainable supply chain. Nike also hopes that their fresh rating program for areas of their source chain may help them to shortly have all the firms working with those to be ranked a dureté level or perhaps above. This will mean that simply companies whom have proven to be dependable are part of the supply chain.


Nike, Inc. 2011. Sustainable Business Performance Brief summary. Available at FY10-11_FINAL. pdf

Paine, T. S., Hsieh, N., Adamsons, L. 2013. Governance and Sustainability in Nike. Harvard Business University Teaching Case.

Porteous, A. H., Cohen, S. A., Lee, H. L., Rammohan, S., Versus. 2012. Maturity in Responsible Supply Sequence Management, Stanford: Stanford Global Management Source Chain Online community. Available at:

Schifrin, G., Carroll, G., Brady, G. 2013. Nike: Sustainability and Labor Methods 1998-2013. Stanford Graduate University of Organization Teaching Case.


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