Scm And Erp Implementation At Nike Commerce Essay

Scm And Erp Implementation At Nike Commerce EssayNike, Inc. is an integrated smart set which designs, progresses and markets world grand gymnastic, footwear, apparel, equipment and accessories. This company is a large publicly traded athletic wear and equipment provider which is based in United States. And it is the worlds leading supplier that supplies athletic shoes and apparel and it is a major manufacturer of sports equipment with revenue everywhere $18.6 billion in year 2008. In that year Nike employed more(prenominal) than than 30 000 people worldwide. 1In 1964 the company started Blue Ribbon enjoyment which was founded by athlete Phil Knight and his coach Bill Bowerman.PRODUCTSNike produces a wide range of growths, such as shoes and apparel for sport activities ilk footb only, tennis, rail, basketball, golf, combat sports, and American football for men, women and children. The first product of Nike was track running shoes which ware released by Nike in 1987.some(a) of the companys shoes edit weight because they contain Fly wire and Linarite Foam.In 2010 Nike collection were purposeless by university teams deal Miami, Alabama, Florida, Oregon, West Virginia, Pittsburgh etc.NIKES SUPPLY CHAIN focusSupply Chain Management or (SCM) is the management of the entire value-added chemical filament, from the supplier to manufacturer right through to the retailer and the final customer. Three ancient goals of SCM are Reducing inventory, increasing the transaction speed by exchanging info in real-time and increasing sales by actioning customer requirements more efficiently. 3 Shortly, SCM is a art network converting from buying, qualification, moving, and warehousing to selling.The aim of Nike was to do their products divers(prenominal) or unique from otherwise shoe producers thats why the supply chain management of Nike focused on that by maintaining its relationship with its suppliers in exhibition to be able to do its production process part. Nikes supply chain acknowledges all the activities, such as goods and services from the raw material stage, assembly, manufacturers, warehouse, split suppliers, and distribution to the end-user whose primary goal is to maximize the value and shareholder wealthiness of the company.Supply chain management brought certain benefits to the company. Costs from bring outsourcing allowed Nike to focus on its core competencies such as product design, marketing, and Air Sole technology. race of company with its suppliers made it contingent for them to have better quality product with low lives through reduced administrative and payroll costs. Nikes diverseness of 860 suppliers let them flexibility, also allowed them faster service in cases of emergencies and quality standard. The technologies of Nike like transferring data, orders, communication via internet and databases let them perform and meet the demands of customers in a timely manner and at the same time allowed them to have a good inventory and monitoring control.Nikes supply chain was confronted with many an(prenominal) obstacles. bingle of the reasons was an expensive implementation of technical comp starnts another reason was having too many suppliers which can lead them losing control of inventory and operations management. A scant(p)coming of some shoe parts suppliers can result delay in its supply chain process non implementation of suppliers of Nikes can once over again dispose of the public perception of the company and also trend forecasts and equivocal economy may affect consumers need.I2 SOFTWARE IMPLEMENTATIONIn 1999, Nike Inc. heady to implement the first part of the supply chain strategy. So they opinionated for demand and supply chain planning application package from i2 technology. 4 The cost of this strategy was $40 million. The strategy of Nike using i2 software was to help the company to enable them resolve and detect any problems effectively, to perform effective busin ess planning, and help them to match the supply with demand by mapping out the manufacturing of specific products.REASONS FOR I2S SOFTWARE FAILUREThe failure was heartwhen the company denote that they had profits of $97.4 million and this sum was 48 million below from their sooner forecast for the third quarter ended February 28, 2001.They also mentioned that this revenue short fall was caused from the supply chain software that wasinstalled form i2s Technologies. By the appearance this failure affected companys reputation as an innovative user of technology. Some problems that were caused from the i2 software were as followsIntegration it couldnt integrate with SAP ERP, the integration was unavoidable to be with ERP, SCM and CRM but this didnt happen in i2 SCM that was working so isolated.Customization on that point was a high customization demand forecast which caused system operations to be very slow.Deployment using legacy system the complexity for entering introduce infor mation by the lack of integration in several(prenominal) languages and also subsystems results in crashes, bugs, enormous delays.There was no realistic time of goals because on that point was an extreme pressure In timelines , this result in low take aim of testing before going alive and may be push the probability of errors.And the following problems were that the software was giving inadequate information, the market physique scrams to change and NCS project complication and as a result of all this review of meetings.After all this problems the Nike and the company that produced software were pointing finger at each other. Software Company said that they had some specific templates and methodological analysis for use and we always recommend to our customers to follow them but Nike instead chose not to do that. Also she added that Nikes problem is isolated incident and the other super acid companies are not in risk.IMPLEMENTING SAP AFSThis time Nike decided to implementspecif icallydeveloped software forapparel and for footwear industry the software called AFS which was a variant of the SAP R/3. With the singleInstance Strategy, Nike begin using SAP AFS application across all the geographies where Nike is sold and ,on the other hand they also decided to chose to implement the other SAP applications which includeSupply Chain management (SCM) and Business Information warehouse which was considered a pilot test of SAP Net Weaver platform for the set about future. The company thinks that the single Instance Strategy would result in better integrationand alsoprovidea competitive edge by enabling holistic view of its business.BENEFITSNike spent six years and $ d million on the project. In 2004 the 80% of the project was completed, and the company gained several benefits from the project. The benefits were dividingbetter financial managementimproved theirrevenue of forecasting diminish the inventory levelquick manufacturer and design process come out BenefitsB etter integration between departmentsImproved level of decision makingBetter visibility into costumer order transactionsNon-quantifilable benefitsCONCLUSIONAsa conclusion we can say that every company leers by their mistakes even though this mistakes cost a lot.As we discussed below one of the biggest mistake of the Nike was choosing a poor quality company that had never intentional such big software and tried first time on Nike and when the problem occurred they werent able to accept their faults. By the way also we well-educated the importance of pilot test because of the pressure they couldnt test the software and they go about a problem such thatthe lose was felt 9 months in the company. There was a vision gap in the company, where the role of forecasting wasnt clearly defined and it had a hard influence on supply chain management. And finally if there existed anyexperienced external consultant, some(prenominal) previous problems wouldhave been managed.