NIKE ERP IMPLEMENTATION

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COMPILED BY PARITOSH

NIKE ERP IMPLEMENTATION
JUST DID IT FROM FAILURE TO SUCCESS

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NIKE: INTRODUCTION
 Started in 1957 as an athletic footwear distribution company called Blue Ribbon Sports  By Bill Bowerman Phil Knight : Track and field coach : Runner

 In 1978 renamed as Nike
 Product Range: – Sports equipment – Sports wear – Apparels – Accessory products

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NIKE: 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

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NIKE: 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

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NIKE: 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

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WHILE 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

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NIKE & i2: ERRORS COMMITTED
 Customization  Improper Implementation  No Sampling Process

 Inexperience of i2

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NIKE: 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

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NIKE: 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

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NIKE: 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

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NIKE: SAP ERP TAKES OVER
 SAP AG and Siebel Systems for CRM  Pilot testing of sap netweaver platform  Implemented for business information warehouse

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NIKE: 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

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FINALLY DID IT !

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