Nike is a sports apparel and footwear manufacturing American multinational company. Phil Knight and Bill Bowerman founded the retail chain sportswear brand in 1964. Nike has approximately 1032 stores in various countries across the globe. Today, we’ll discuss the supply chain analysis of Nike; it focuses on various SCM elements like procurement planning, inventory management, warehousing, automation, transportation, recycling program, and distribution.
Supply Chain Analysis of Nike
Let’s discuss the main elements of the supply chain analysis of Nike are as follows;
Strong Commitment
Nike has made a strong commitment to the suppliers and vendors across the world. The sportswear brand offers them competitive wages and compensation plans, growth opportunities, and tech and professional support to suppliers. In fact, the company has set up a strict code of conduct for suppliers to ensure their compliance with industry standards. They’re as follows;
- Limited impact on the environment
- Reducing environmental waste
- Properly managing the chemicals
- Safe working conditions
- Occupational health and hygiene hazards
- Setting 18 as the minimum working age
- No forced labor
- Equal employment opportunity to all suppliers with no discrimination
- Nor harassment and abuse
Strategic SC Approach
The strategic supply chain approach is to transform from testing and experimenting with new ideas to the exploration of new opportunities. Nike has developed a platform to promote the best strategic approaches among suppliers comprehend their common challenges and offer them competitive pay. However, the company analyzed the capabilities of various suppliers and allowed them to increase their compensations as a part of their strategic approaches.
Supply Chain Transparency
Nike is completely transparent about its supply chain network like its suppliers, vendors, manufacturing factory partners, and their payment structure. For instance, the sportswear brand’s suppliers are from six countries; El Salvador, Honduras, Malaysia, Indonesia, Vietnam, and China. They have shared their compensation plans and wage data and it is relevant to the external industry benchmarking standards; minimum wages, national poverty line, and living wages.
Approximately 103 strategic suppliers of Nike are producing 80% of Nike’s products and they have employed more than 700000 employees. After analyzing their minimum wage data and compensation plan, we have realized that Nike’s suppliers are paying 1.7 times more than the applicable national poverty line; 53% more than the applicable living wage plan.
Collaboration and Partnership
Nike collaborates and partners with various suppliers, partners, and union workers to support the rights of workers and employees and increase their bargaining power. For instance, the sportswear brand collaborates with partners like FLA for better cotton initiatives and addresses the concerns and rights of workers. The joint venture with FLA, IPUD, and various other brands focuses on improving the employment strategies of the cotton industry in Turkey. It allows the company to avoid child and forced labor.
Automation Technology
Nike is employing the latest automation technology and AI tools and equipment to develop unique product designs, speedy delivery, and environmental sustainability. Most importantly, it allows the sportswear brand to provide additional services to improve the overall customer satisfaction level;
- Regional service centers
- Buy online and pick up at stores
- Ship to stores
- No rush shipping
According to an estimate, Nike has employed approximately 1000 robots for the packaging and movement of products and goods. It allows the company to improve the processing speed and deal with various types of physical challenges.
Recycling
Nike is taking various steps to promote environmental sustainability by decreasing the number of split packages and developing 65% recyclable content. The sportswear has improved its packaging to offer long-term benefits to the customers. The company strongly believes in protecting and saving the environment; it allowed the company to reduce waste, carbon, water, and resources.
For instance, Nike implements on-ground shipping to customers across the US, it is more environmentally friendlier than air-freight shipping. The company takes extra time to deliver the products timely to the customers. Environmental sustainability initiatives like recycling and refurbished products are increasing the eligibility of the company.
Empowering People
Nike’s global supply chain management project is all about empowering people by improving their skills and expertise. The sportswear brand is investing a significant amount of capital resources in its career development and conducting training and development for suppliers, vendors, partners, employees, and stakeholders.
For instance, Nike is collaborating with the University of Memphis and other universities in the US to introduce various types of programs focusing on their personal growth and career development. It shows the company’s strong commitment to society and the people by investing back into the local community.
Conclusion: Nike Supply Chain Analysis | Nike Supply Chain Management
After an in-depth study of the supply chain analysis of Nike; we have realized that Nike is the world’s leading sportswear multinational brand. If you are learning about the Nike supply chain analysis; then you should keep in mind the abovementioned SCM elements; procurement, planning, transportation, automation, inventory management, and people programs.
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