The company, Nike Incorporated, is one of the world’s largest athletic shoe retailers and the largest in the United States. It was established as an independently owned business in Oregon in 1964 and has since, grown to encompass an expansive range of athletic shoes and apparel. Furthermore, Nike is regarded as one of the largest sponsors of international sporting events such as International tennis and golf events (Nike Inc, 2015). For example, Nike sponsors the apparel worn by Tiger Woods on the PGA Golf tour. Also attached with the stigma of being the largest sporting apparel company worldwide is the requirement for an extensive supply chain and one that is highly efficient, relies on lean manufacturing and can continue to provide customers with large quantities of a high quality product. The supply chain of Nike has been proven to be one of the most effective mechanisms of manufacturing and product success worldwide and in the 21st century (The Guardian, 2015).
The supply chain of Nike is, as stipulated, comprehensive and encompasses a number of steps, integral to its overall success. The first step in its highly successful supply chain is marketing and allowing customers and clients to propose particular designs to its own product designers. Through a number of marketing techniques such as effective communication chains, Nike is able to allow its customers to submit proposals, which are then considered and incorporated into its overall business (Sustainable Business, 2013). The significance of this first step of the process is that it allows the company to connect with its customers and to have a greater input in product design and hence, higher levels of prolonged loyalty. When customers are given the chance to positively impact the products of Nike, greater satisfaction levels are achieved. This marketing step then follows onto the second stage, product design (The Guardian, 2015). Nike has a number of research laboratories where it develops its products and performs a number of tests on product designs and the effectiveness of well-developed products. The blue print of each approved design from the marketing phase originates from the Nike research laboratory. Furthermore, the design phase for each proposed shoe or sporting apparel can take up to three years as a number of quality tests are performed in the laboratory environment (Nike Inc, 2015).
The next stage of Nike’s supply chain is the manufacturing its products that have been quality tested in stage 2. There are hundreds of factories worldwide that assist in manufacturing Nike’s shoes and clothes. Some of Nike’s largest factories include those located in China, Indonesia, Pakistan and Thailand. Furthermore, Nike outsources its manufacturing to third parties and allows secondary and independent companies to effectively construct and develop its respective products. Nike also uses lean manufacturing techniques that focus on significantly improving the capacity of its factories overseas and ensuring that products retain their quality and are produced in larger numbers (Nike Inc, 2015). Lean manufacturing improves the overall efficiency and productivity of the company’s manufacturing processes as it reduces the amount of waste at each level or stage of its manufacturing stage. For example, Nike’s factories in China and Malaysia are highly efficient as they effectively utilize lean manufacturing and ensure that all of the products produced are high quality, effective and do not reduce the ability of the factories to continue manufacturing. In many companies worldwide, lean manufacturing is not utilized and their factories are often operating too inefficiently and are over capacity with a maximum load or weight applied to each process and employee (The Guardian, 2015).
Distribution of its products is the next stage of Nike’s supply chain. It supports the manufacturing stage by connecting the manufacturing factories to its distribution outlets, which are mainly centered in the United States. Many of Nike’s products are distributed via cargo vessels as well as by air and train when distributing products domestically within the United States. This stage is crucial as it ensures that its customers are provided with its products and that the level of supply of new and existing products is sustained at a high level. Any significant flaws within the distribution process of Nike’s supply chain can result in delays and lower satisfaction levels amongst customers when their desired products are not received on time (Sustainable Business, 2013). Additionally, Nike distributes its products to over 200 locations worldwide and hence, consists of an extensive distribution channel that connects the United States to each of these locations and ensures that products arrive promptly to desired locations consisting of loyal and new customers (Nike Inc, 2015).
The next step in Nike’s supply chain is receipt by the customers. Customers are provided with access to the new or pre-existing products through major Nike outlets or supermarkets. For example, Walmart provides a number of Nike products within the United States whilst sports retail outlets and factories provide the majority of Nike based products in such locations as Australia and New Zealand. Customers are also essential in terms of providing the company with vital feedback (Nike Inc, 2015). The most important factor in this entire process is the responses of customers and the feedback that they provided. Nike has a number of modes of feedback, which allow it to continually improve its products and ensure that its customers are constantly satisfied or their needs are met. Nike also utilizes the reverse logistics model, which focuses on the company considering and taking into account suggestions by customers to improve particular designs. Nike constantly establishes new designs or makes improvements on pre-existing designs in order to provide customers with innovative products (Sustainable Business, 2013).
In summarizing the supply chain of Nike, it provides its customers with a highly effective and quality driven process. It allows customers to effectively interact with its supply chain processes and have a say and contribution in how the company designs its footwear. This sustains loyalty amongst customers and ensures that they continue to remain willing to purchase products and provide ongoing support and suggestions.
- Nike Inc. (2015). Manufacturing. Nike Incorporated, Retrieved from http://www.nikeresponsibility.com/report/content/chapter/manufacturing Accessed on 10 August 2015.
- Sustainable Business. (2013). Nike moves faster to clean up its supply chain. Green Biz, Retrieved from http://www.greenbiz.com/news/2013/03/25/nike-moves-faster-clean-its-supply-chain Accessed on 10 August 2015.
- The Guardian. (2015). Nike: how supply chain measures up. The Guardian, Retrieved from http://www.theguardian.com/sustainable-business/nike-supply-chain-measures-up Accessed on 10 August 2015.
