Discuss about the Logistic Management for Nike Inc.
Nike, Inc. was incorporated in the year 1968, in Beaverton, Oregon. The company has gained market competencies over the year in the field of athletic wears and sports products have created a significant status in the market. Nike has a competency in introducing products that get sold out in minutes of hitting stores. Till 2013, the company has attained 540 patents. It is world’s largest supplier of athletic shoes and apparel. The company gained the position of most valued brand among sports business. The brand is sponsored by high profile athlete across the globe. The sportswear brand is highly competitive and includes the prominent market strategy. The brand is present in 190 countries and has sustained in market due to its competitive market strategy. The key strategy of the brand is to build a portfolio by marking global recognition, using high-impact high profile sports event, heavy market endorsement policies through famous athletes (Frisch, 2013).
The objective of the supply chain is to gain the product delivery and information accuracy on a long run. Nike Follow a DIFOT Scheme. This method is based on providing better services to the customers in order to meet the requisite target. The products are manufactured in the factories. The finished goods are then transported through different means to the customer centers (Jonsson, 2008).
The delivery mechanism and process at the multinational company like Nike is very critical. They are practicing effective brand strategy to improve the profit, reduce the inventories and minimizing the markdowns. This ensure right assortment of a product to the customer. They are using an effective supply chain process to supply products correctly to the customers. Its manufacturing network includes 700 factories located in 42 countries. The products made in the factories move through various distribution centers to reach the customer (Melo, Nickel & Saldanha-Da-Gama, 2009). Nike does not own manufacturing unit which makes up to 88 percent of its revenue. They outsource the manufacturing to the third party. Most of the raw material at Nike is supplied through the independent contractor located in the third country. The oversea rivals of Nike are Under Armour, Adidas, Lululemon and Athletica (Knight, 2016).
Nike has developed a baseline of its supply chain general environmental footprint. This includes an inbound logistics and subcontracted manufacturing of the product .Nike has partnered with the University of Delaware to expand a model for inbound emissions of product transportation from factory. In order to gain market competencies, Nike is working to getting bigger that model to compute outbound shipments from distribution facility to retail. Majority of company’s manufacturing units are located in Vietnam and China. They have conducted audits of key factories in order to recognize energy-intensive processes and possible areas of savings. Nike’s supply chain team has different goals in order to reduce it’s in general carbon footprint and working directly with third-party logistics providers. All These third party provide an opportunity to optimize fuel use and step up the use of substitute fuels. The company meanwhile has adopted its packaging footprint as part of an extensive waste mapping exercise. This activity help the company in dealing with the adverse issues that it faces in meeting the direct objectives (Monczka, et al 2015).
Nike has incorporated logistic management process into the structure so as to manage the co-related function. The operation at the organization is well managed by the distinct units. There is a better coordination in between different departments like marketing, finance, accounting and Human resource while meeting the end result. Different core functional areas have a direct implication on logistic management(Pettit, Fiksel & Croxton, 2010).The reason is to decrease the needless cost in running the logistic and to increase suitable result. In case if the order is delayed, it has to be accelerated through the manufacturing process. The burden cascade on transportation department to offset the delays caused at previous place. The appropriation of finance department has a direct effect on the company logistics. This has a direct impact on the organization finance process (Rushton, Croucher & Baker, 2014).
While evaluating the Cross-country cost comparison, it has to be calculated on an all-in basis, together with the costs of possession. It is significant to evaluate all the cost involved in the process (Russell & Taylor-Iii, 2008).
The Global supply chains involve such inconvenient troubles like import-export procedure, insufficient logistics infrastructures, and numerous regulations and trade agreements (Schönsleben, 2007).
The network optimization studies allow in managing the data in a pre-defined way. This is helping in identifying the infrastructure-related challenges coming up in the upcoming market. This is to manage the challenges coming up at the time of placement of products. This allow in managing market competencies in order process (Solomon et al 2013).
By Owing to increasing product production, one of the key challenges is to make more speed, receptiveness, and flexibility into supply chains in order to meet the diverse needs of consumers. Nike has a diverse market with different customer needs. The main purpose is to guarantee a consistent supply of product (Van Weele, 2009).
Looking onto the current market, Customers are becoming more difficult and demanding. They are insisting on shorter lead times and quicker inventory-turns. The company in order To be competitive has to be supportive. It has to accommodate as per the requirements devoid of inflating their cost structures. By looking ahead it is possible to manage the, freight transport looms. It is trying to include rising costs, capability bottlenecks, and home safety (Waters, 2011). The company has relative costs of mechanized onshore against offshore shifting. The balance is to favor of manufacturing start to migrate back to the U.S. Nike is facing a huge amount of product proliferation. It is facing defy more speed, receptiveness, and flexibility into the supply chains. The purpose is to meet the diverse needs of consumers in markets. For gaining competencies they have started partnerships with suppliers and carriers. This is allowing better implementing of lean manufacturing programs. This program helps in promoting flexibility into the supply chain program. It is allowing in diversifying the needs of the basis of the market. It is however applying a consistent program in order to manage the regular supply of goods. The product order cycle and management is a critical concept in Nike. The purpose is to manage the lifecycle of the product by managing sales. By Managing this aspect it is possible to manage the consistency in the market. It is able to manage the possibilities in order to gain better facilities (Brewer, Button & Hensher, 2008).
The three components of a SCM framework are the network structure, business process and management components. These three components are supply chain network process and a wide variety of supply chain process. The primary purpose is to manage impact of supply chain and to gain competencies. The success of SCM is to handle the individual process. Customer service management is to integrate activities across supply chain. There are eight supply chain processes: Customer Service management, CRM, Demand Management, Order Fulfillment, Manufacturing flow management, Procurement, product development and commercialization and returns (Waters & Rinsler, 2014). There are 4 types of links available in the business functionality. It has to manage the business process in order to link the process in the best possible to manage the link in the process. It is to link the firm in between the customers and suppliers. These processes are important to manage the supply chain process. This is to link in between the process and to manage the organizational process and facilitate growth (Carbasho, 2010).
Supply chain management process held as an important link to manage the success of Company. Nike is ready to plan the process in order to manage a link in between the activities. This would be managing the organization in dealing with the order cycle maintenance. These components help in managing and controlling the process chain and to supply adequately. The order cycle is trigger as per the requirement in the market. The order cycle is managed through the process of an effective logistic management of goods.
This model is a strategic supply chain management model creating value for the shareholders by aligning supply chain strategy with the business strategy.
The Global Supply chain focus on providing a better insight to the designing and distribution and different marking activities Nike has achieved a significant market position in different market. It is helping in execution of the sourcing strategy in the best possible way. Nike has a better facility to manage the functions in order to create a strategic and profitable measure. The company has shifted their base from a high cost country to low cost. This has helped in managing goods in the best possible way. Nike took the advantage of global sourcing to reduce the cost. The effective management of the sourcing strategy has helped in gaining competencies.
Nike’s future system is to order and plan to resolve the inventory and finance related issues. The flexibility in the designs and specification helps Nike to gain a competitive advantage against the other company. By developing better value with the partners, it is possible to gain competencies. The volume producers thereby help in gaining competencies in the market. Nike has made alliance with the manufacturing units in Asia. This help in reducing the excess operational cost attached to it. Nike’s supply chain team has different goals in order to reduce it’s in general carbon footprint and working directly with third-party logistics providers.
The company uses future order system to manage the supply with demand. It sells the product through various channels: Nike owned stores, online stores, and independent distributor. They are using Just in Time approach to manage the inventory.
This strategy helps in information, decision, financial and operational integration. These are valuable chain to gain competencies in supplying the goods. Nike Uses the SAP Software solution to manage the supply chain. The integration service is been given better strategic growth in order to manage the supply chain.
This is one of the critical factors in managing the supply chain in an effective way. Time compression allow in dealing with the objectives by allocating the cost resources in an adequate way, The horizontal and vertical structure forms to be an important parameter in a time based allotment. Hence Nike is managing the process in an effective way in order to gain effective results. Customers are not willing to pay extra in order to deliver better results. The JIT approach is been maintained in an effective way so as to manage the competencies. This allow in gaining effectiveness in different core areas.
Conclusion
The process of logistic management helps in understanding the existing issues and paves the path for gaining market competencies. This help in understanding the current issues faced in managing the key operational area. The goal is to manage the key functions and to provide with an appropriate solution. Aligning the whole process will ensuring consistency. It is important for delivering better result on a long run. It has to adopt different aspects in order to gain effectiveness on a long run. To be competitive has to be supportive. It has to accommodate as per the requirements devoid of inflating their cost structures. By looking ahead it is possible to manage the, freight transport looms. This is considerate for an organization to deal with the issues in order to manage better results.
References
Brewer, A. M., Button, K. J., & Hensher, D. A. (Eds.). (2008). Handbook of logistics and supply-chain management. Emerald Group Publishing Limited.
Carbasho, T.(2010). Nike Corporations That Changed the World. ABC-CLIO
Frisch, A.(2013). The Story of Nike. Jaico Publishing House
Jonsson, P., (2008). Logistics and supply chain management. London: McGraw-Hill Higher Education.
Knight, P. (2016). Shoe Dog: A Memoir by the Creator of NIKE. Simon & Schuster UK
Melo, M.T., Nickel, S. & Saldanha-Da-Gama, F., (2009). Facility location and supply chain management–A review. European journal of operational research, 196 (2), pp.401-412.
Monczka, R.M., Handfield, R.B., Giunipero, L.C. & Patterson, J.L.,( 2015). Purchasing and supply chain management. Cengage Learning.
Pettit, T.J., Fiksel, J. & Croxton, K.L., (2010). Ensuring supply chain resilience: development of a conceptual framework. Journal of business logistics, 31(1), pp.1-21.
Rushton, A., Croucher, P. & Baker, P., (2014). The handbook of logistics and distribution management: Understanding the supply chain. Kogan Page Publishers.
Russell, R.S. & Taylor-Iii, B.W., (2008). Operations management along the supply chain. John Wiley & Sons
Schönsleben, P., (2007). Integral logistics management: Operations and supply chain management in comprehensive value-added networks. CRC Press.
Solomon,M. et al (2013). Marketing: Real People, Real Choices. Pearson Higher Education AU, 2013
Van Weele, A.J.,( 2009). Purchasing & supply chain management: analysis, strategy, planning and practice. Cengage Learning EMEA.
Waters, D., (2011). Supply chain risk management: vulnerability and resilience in logistics. Kogan Page Publishers.
Waters, D., & Rinsler, S. (2014). Global logistics: New directions in supply chain management. Kogan Page Publishers.
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