Case Study Of Nike's Operation Management Decisions

4.0 Operation Management decisions:

“Operations management is the management of processes that transform inputs into goods and services that add value for the customer” (Operations Management, 2015). There are 10 operating decisions:

i. Supply Chain ii. Quality iii. Product iv. Human Resources

v. Location vi. Process vii. Inventory viii. Maintenance ix. Layout

x. Scheduling

Among the above 10 operating decisions I would like to go details on supply chain, quality, product and human resources for NIKE, Inc.

i) Supply Chain:

NIKE, Inc. is one of the pioneers of the industry-defining manufacturing outsourcing strategy. NIKE does not own any factories for manufacturing its footwear and apparel, which make up 88% of its revenues. Because of

choses the materials carefully (with an eye not only performance but to environmental concerns and sustainability) and innovative new styles are wear-tested before they go to retail. “The principal materials used in footwear products are natural and synthetic rubber, plastic compounds, foam cushioning materials, nylon, leather, canvas, and polyurethane films used to make NIKE Air-Sole cushioning components. The principal materials used in apparel products are natural and synthetic fabrics and threads (both virgin and recycled), specialized performance fabrics designed to efficiently wick moisture away from the body, retain heat, repel rain and/or snow, as well as plastic and metal hardware” (Csimarket.com, 2015). Higher the quality of a product the more the company can charge for the product. Over the years, NIKE has been successful to represent its brand as high quality product in the mind set of people, NIKE, Inc. spends time, energy and resources helping the contract manufacturing partner reach its new standards. NIKE, Inc. uses InfinityQS as its quality management solution for its manufacturing plant because of the software’s ability to report physical attribute data with precise specifications (Infinityqs.com,

In addition, NIKE contracts with manufacturers that employ more than 800,000 workers. NIKE, Inc.’s HR function is investing significantly in the areas of sustainable talent practices and infrastructure. “The function works to ensure that NIKE, Inc. has talented, diverse and inclusive terms organized effectively against their biggest opportunities of driving innovation and business performance” (Nikebiz.com, 2015). The staffs include fulltime, part time and contract employees. NIKE, Inc. provides formal and informal trainings to its staffs. NIKE, Inc. has a code of ethics for all employees called Inside the Lines which defines the standards of conduct that the company expects the employees to follow and includes range of topics on employee activity, ethical behaviour, product safety, legal compliance, competition and use of resources (Nikebiz.com, 2015). Similarly, NIKE, Inc. has a code of conduct for suppliers to which all contracted suppliers are required to abide which includes standards for contracted manufacturers with regard to working hours, respect and the rights of their employees and to provide employees with a safe and healthy work environment (Nikebiz.com, 2015). “Nike is required by The California Transparency in Supply Chains Act to disclose efforts to eradicate slavery and human trafficking from direct supply chains. Employees and managements with direct responsibility for supply chain