nike erp implementation
TRANSCRIPT
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 !