GROUP- 5Akshay Bhalla

Prashant VohraAastha Thakur

Piyush Nair

OVERVIEW OF THE CASE Introduction: NIKESupply chain managementNIKE’S supply chain i2’s debacleReasons for i2’s software failure Implementing SAP AFSBenefits Conclusion

Introduction: NIKEFounded in 1957 by Philip Knight.Manufacture:

◦ Sports equipment◦ Sports wear◦ Apparels◦ Accessory products

Products sold in over 140 countries.

SUPPLY CHAIN MANAGEMENT SCM is a business network covering from buying,

making, moving, warehousing to selling

SellingSelling

BuyingBuying

MakingMakingMovingMoving

WarehousingWarehousing

NEED FOR SCM

NIKE’S SUPPLY CHAIN In 1975, Nike introduced Future Program. Supply Chain Management was inadequate. 1998, Nike’s global operations were broadly

divided into 5 geographic regions.Nike’s profit dropped by 50% from US$ 798

million to US$ 399 million. Launched NSC Project. Initiative of “Shelley Dewey”, Vice President of

Supply Chain and Steele. Implement its ERP, Supply Chain, & CRM

Software onto a single SAP Platform.

NSC PROJECT

NSC IMPLEMENTATION STRATEGY

i2’s Software ImplementationFirst part of supply chain strategy.

Cost of this project was US $40 million.

To match supply with demand.

To reduce the amount of raw material.

Used it as a legacy system rather than as apart of SAP ERP project.

i2 Trade Matrix Plan SolutionSolution Objective Challenge Capability Benefit

Strategic Planning

Maximize profitability by optimally allocating resources

Unclear parameters

Optimization Long term profitability

Demand management

Anticipate and influence demand

Accurate demand estimation is difficult

Demand planning, channel collaboration

Improved customer service

Supply planning

Determine what to make and when and how to profitably distribute supply

Size and complexity of problem

Collaboration, optimization,Speed

Global visibility and coordination , fast reaction to changes

Production Determine what to produce and when

Managing material & capacity trade offs is complex

Fast finite material & capacity planning & scheduling

Reduced inventory,Improved due date performance

REASONS FOR i2’S SOFTWARE FAILURE

Third party integrator. Inexperience of i2. Customization.Trying to forecast too far out ahead. Pilot test.

•Problems in smooth integration. •Inadequate information.

•Changing market conditions.

•Complication of NSC project.

•Review meetings.

Implementing SAP Apparel and Footwear Solutions (AFS)

R/3

Variant

Single Instance Strategy

Purchased in1998

Big Bang Approach

i2 Software

After Learning

the Lesson

Just Do It

The SAP AFS

BENEFITS

Measures to overcome demand forecasting problem

Importance of demand forecasting

Determining the quantities.

"make to stock" rather than "make to order“

Reduces supply time.

Efficient forecasting

Ways to avoid supply chain problems

Lessons Learned Be Patient

Define a business Goal

Re-engineering Process

Just Do It Over

Keep your eye on the price

CONCLUSION Implementation is a complex process.

Evaluating pros and cons.

Continuous assessment.

Adaptability

Importance of pilot test.

Just do it