{"id":565,"date":"2018-04-07T22:09:14","date_gmt":"2018-04-08T02:09:14","guid":{"rendered":"http:\/\/blog.richmond.edu\/mgmt340-03\/?p=565"},"modified":"2018-04-07T22:09:14","modified_gmt":"2018-04-08T02:09:14","slug":"nikes-race-is-on","status":"publish","type":"post","link":"https:\/\/blog.richmond.edu\/mgmt340-03\/2018\/04\/07\/nikes-race-is-on\/","title":{"rendered":"Nike’s Race is On!"},"content":{"rendered":"

Nike, the sneaker giant, has recently decided to speed-up its manufacturing and delivery process in the US. This announcement<\/a> came soon after Adidas\u2019s retro superstar became the top selling sneaker in the United States for 2016 – the first time in the last decade.<\/p>\n

To accelerate the time Nike\u2019s shoes spend in the supply chain before reaching customers, Nike needs tospeed-up the processes at each point (manufacturing, wholesaling, retailing etc.) in its supply chain. As we witnessed in the supply chain lab in class, if one person failed to catch up with other members of the supply chain, the whole process was delayed. The confusion arising from this delay at one stage of the chain caused further holdups until the whole supply chain became a complete chaos. In order to overcome process delays and confusion, Nike is redesigning its supply chain by shifting its manufacturing from Asia to Latin America. This shift will ensure less holdups in the supply chain and faster deliveries to customers in the United States. Furthermore, it has decided to use automation to keep costs low and produce products at a faster pace.<\/p>\n

As we saw in the supply chain lab, the group which was able to keep its costs the lowest used communication throughout the chain to manage production and orders. Similarly, Nike has moved into a \u201cnear-shore, purpose built factory\u201d with Flex, its manufacturing partner. Through this partnership, Nike plans to \u201cproduce tens of millions of pairs near shore\u201d by 2023. Moreover, it has also decided to move away from a \u201cfutures order\u201d strategy to a \u201cresponsive model\u201d of prod<\/p>\n

uction. The futures strategy meant that Nike only started production if the order had to be fulfilled within six months. By moving manufacturing close to United States, it can produce products in response to what costumers are actually buying. Nike\u2019s CEO, Sprunk said that the partnership with Flex \u201callows us to take our standard time, from just manufacturing to market, from about 60 days to 10 days or less.\u201d This redesigning of supply chain is likely to give Nike a competitive advantage in the market by reducing shipping expenses, import duties, and risks of making a large volume of shoes in advance.<\/p>\n

Nike is not only adopting automation in its factories near North America, but it also has plans to install more than 1,200 automated machines at the factories of its suppliers to handle cutting, cementing, shoe assembly, and making soles. Thus, it is helping its suppliers innovate to develop a faster way of making labor-intensive sneaker soles. Therefore, redesigning of supply chain needs to take place at each stage to ensure company is able to reach its competitive priorities\u2019 goal.<\/p>\n

Do you all think Nike\u2019s redesigning of supply chain efforts are sufficient to beat adidas in the race to achieve greatest market share? What other things can Nike do to have a greater competitive over its competitors in the industry?<\/p>\n

Also here’s a really interesting Nike ad for you all!<\/p>\n

https:\/\/qz.com\/1067801\/nikes-iron-grip-on-the-sneaker-market-is-slipping\/<\/a><\/p>\n

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