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SCM & ERP Software Implementation At Nike: from
Failure To Success
GROUP- EARVIND ACHANTA
HARINI CHODAGAMMANISH KHURANA
MUDITA MEHROTRA NITHEEN PATRIC
PRATEEK BAJORIA SAKET KHANDELWAL
S P PARHISWATI
• Introduction: NIKE
• Supply chain management
• NIKE’S supply chain
• i2’s debacle
• Reasons for i2’s software failure
• Implementing SAP AFS
• Benefits
• Conclusion
OVERVIEW OF THE CASE
Introduction: NIKE
• Founded in 1957 by Philip Knight.
• Manufacture:– Sports equipment– Sports wear– Apparels– Accessory products
• Products sold in over 140 countries.
SUPPLY CHAIN MANAGEMENT• SCM is a business network covering from buying,
making, moving, warehousing to selling
SellingSelling
BuyingBuying
MakingMakingMovingMoving
WarehousingWarehousing
NEED FOR SCM
NIKE’S SUPPLY CHAIN
• In 1975, Nike introduced Future Program. Supply Chain Management was inadequate. 1998, Nike’s global operations were broadly divided
into 5 geographic regions. Nike’s profit dropped by 50% from US$ 798 million to
US$ 399 million.• Launched NSC Project. Initiative of “Shelley Dewey”, Vice President of Supply
Chain and Steele. Implement its ERP, Supply Chain, & CRM Software
onto a single SAP Platform.
NSC PROJECT
NSC IMPLEMENTATION STRATEGY
i2’s Software Implementation
• First part of supply chain strategy.
• Cost of this project was US $40 million.
• To match supply with demand.
• To reduce the amount of raw material.
• Used it as a legacy system rather than as apart of SAP ERP project.
i2 Trade Matrix Plan SolutionSolution Objective Challenge Capability Benefit
Strategic Planning
Maximize profitability by optimally allocating resources
Unclear parameters Optimization Long term profitability
Demand management
Anticipate and influence demand
Accurate demand estimation is difficult
Demand planning, channel collaboration
Improved customer service
Supply planning Determine what to make and when and how to profitably distribute supply
Size and complexity of problem
Collaboration, optimization,Speed
Global visibility and coordination , fast reaction to changes
Production Determine what to produce and when
Managing material & capacity trade offs is complex
Fast finite material & capacity planning & scheduling
Reduced inventory,Improved due date performance
REASONS FOR i2’S SOFTWARE FAILURE
• Third party integrator.
• Inexperience of i2.
• Customization.
• Trying to forecast too far out ahead.
• Pilot test.
Continued. . .
•Problems in smooth integration. •Inadequate information.
•Changing market conditions.
•Complication of NSC project.
•Review meetings.
Implementing SAP Apparel and Footwear Solutions (AFS)
SAP ERP Project
R/3
VariantSingle
Instance Strategy
Purchased in1998
Big Bang Approach
Continued. . .
Transition
Plan, Training
& Testing
Close
Partners-
hip
Built a
Global
TemplateIm
plementation
i2 Software
After Learning
the Lesson
Just Do It
The SAP AFS
BENEFITS
Measures to overcome demand forecasting problem
Importance of demand forecasting
• Determining the quantities.
• "make to stock" rather than "make to order“
• Reduces supply time.
• Efficient forecasting
Ways to avoid supply chain problems
Lessons Learned
Be Patient
Define a business Goal
Re-engineering Process
Just Do It Over
Keep your eye on the price
CONCLUSION
• Implementation is a complex process.
• Evaluating pros and cons.
• Continuous assessment.
• Adaptability
• Importance of pilot test.
Thank you
Just do it