Nike Operations Analysis

Operations

Nike, Inc. is an American multinational corporation that is engaged in the engaged in the design, development, manufacturing and worldwide marketing. The company is selling footwear, apparel, sports equipment, accessories and also services. The company headquarter is located near Beaverton Oregon, in the Portland metropolitan area. It is one of the world’s largest suppliers of athletic shoes and apparel which generated revenue in excess of 25.3 billion US dollars in its fiscal year 2013(ending May 31, 2012). The company employed more than 44,000 people. Moreover, in 2014 only the brand itself was valued at 19 billion dollar that makes it the most valuable sport brand in history

Originally, BRS, before evolved in to NIKE, was founded

NIKE brand management efforts focused on endorsing the most famous and best possible athletes so that NIKE could be like the sports stars hall of fame. Over the past decades, NIKE spent tremendous amount of money to promote its brand and improve the brand image across the world. The company usually spent more than 12 percent of the revenue on advertising.

NIKE is highly centralized and very focused company. Management concentrated on a important few core functions, such as supply chain management and brand building. Following its strategy, NIKE outsourced all of its products manufacturing process to Asian of South American manufacturers in order to lower the cost. By, 1999, the primary locations for NIKE manufacturing were Indonesia, Vietnam Korea and China. The company also worked with hundreds of manufacturing partners in order to develop long – term sustainable relationships. The partners of NIKE do not necessarily provide the cheapest price but for the most, they had to deliver consistent, quality certified and timely shipments that meet NIKE’s high quality standard. The partners were willing to invest tremendous

Once the design is completed, Manufacturers would begin eight - month product cycle process of providing volume production capabilities of all sizes. Once production was fully on – line, NIKE could expect the orders to be filled in 90 days, plus an additional 30 days shipping.

NIKE distribute its products through Retail Sales Channel(Department Stores, Shoes Stores), Direct Sales Channels(NIKETOWN, NIKESTORES), The Sporting Goods E-Commerce Landscape and Traditional Retailers

Productivity

There are more than 2.5 million people associated with NIKE value chain and 1 million people in contract factories. Labor is NIKE’s greatest areas of impact and opportunities to help NIKE achieve greater productivity

For Years, NIKE have been sourcing from factories the meet its minimum standards for good labor performance. In FY11, NIKE converted our contract factory evaluation and scoring system from a letter-based system to a new medal-based one in line with our Sourcing & Manufacturing Sustainability Index (SMSI). The criteria including quality performance, on – time delivery and cost efficiency. By the end of FY11, 46 percent of contract factories scored bronzed and increased to 68 percent by the end of FY13 however, there is still no GOLD rating