COMPILED BY PARITOSH

NIKE ERP IMPLEMENTATION

JUST DID IT

FROM FAILURE TO SUCCESS

COMPILED BY PARITOSHNIKE: INTRODUCTION

Started in 1957 as an athletic footwear distribution company called Blue Ribbon Sports

By Bill Bowerman : Track and field coach

Phil Knight : Runner

In 1978 renamed as Nike

Product Range:

– Sports equipment

– Sports wear

– Apparels

– Accessory products

COMPILED BY PARITOSHNIKE: INVENTORY MANAGEMENT

Mid-1980, demand management system managed inventory

Gloabal operations from US, Europe, middle east and Africa, asia pacific and LAC

After mid 1970, products manufactured by contractors around the globe

Orders required to be placed 6 months before required delivery date for 90% efficiency

System was not equipped to deal with complications

COMPILED BY PARITOSHNIKE: I2 SCM

• Supply chain software implemented by I2 Technologies in 1999

• Expected Benefits

To increase the scope of operations

To help take orders from the customers and inventory

management

To reduce order-to delivery time by about 50 percent

COMPILED BY PARITOSHNIKE: I2 SCM

To always ensure that supply always meets the demand as per the

prevailing marketing conditions

To reduce amount of rubber, canvas required to produce footwear

COMPILED BY PARITOSHWHILE IMPLEMENTING

Nike refused to use templates & methodologies

System was too customized

Increased employee turnover affected the system

No third party integrators

Implementing both SCM & CRM

COMPILED BY PARITOSHNIKE & i2: ERRORS COMMITTED

Customization

Improper Implementation

No Sampling Process

Inexperience of i2

COMPILED BY PARITOSHNIKE: I2 DEBACLE

Over estimate demands to some shoes and Under estimate demand to some shoes

System sent flawed data to Manufacturers

Slowed down the application & complicated to use

Resulted in users waiting long

Nike couldn’t meet the retail demands

Finally prices of Nike shares fell sharply

COMPILED BY PARITOSHNIKE: I2 DEBACLE CONSEQUENCES

Not able to cater demands

Reputation

Lost Market Share

Forced to sell in discounted prices

Higher shipping costs

Relations between nike and retailers was affected

COMPILED BY PARITOSHNIKE: SAP ERP TAKES OVER

Implemented sap along with its variant R/3 specifically designed for apparel and footwear industry

Designed to streamline communications & lower operation costs

Supply chain project combined with CRM

Expected to reduce order to delivery date

Main system implemented by i2

COMPILED BY PARITOSHNIKE: SAP ERP TAKES OVER

SAP AG and Siebel Systems for CRM

Pilot testing of sap netweaver platform

Implemented for business information warehouse

COMPILED BY PARITOSHNIKE: SAP ERP Benefits

Nike spent six years and $500 million on the project

By 2004, the project was 80% complete

Inventory levels declining

Quicker design and manufacturing

Gross margeings to 42.9% in 2004 from 39.9% in 1999

Increased cash inflows

COMPILED BY PARITOSH

FINALLY DID IT !