Four ways Nike is shaking up the supply chain game

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For some time, Nike has been touting its efforts to create a “digital-first” supply chain, accelerated by the challenges presented to apparel and footwear brands over the past two years.

In mid-2020, the sportswear giant responded quickly to an increased consumer shift towards digital engagement and began transforming its supply chain to serve consumers more directly.

From accelerating the opening of multiple regional distribution centers in the United States and Europe to securing a dedicated train dubbed Nike’s “Sole Train,” the company is innovating to better serve consumers right now, all by transforming its supply chain to fuel its long-term growth.

“From the onset of the global pandemic, we knew our recovery and return to growth would not be linear or intuitive,” said Andrew Campion, Nike’s chief operating officer. “We believed that the immediate and significant changes we were seeing in consumer engagement would be systemic, so we took decisive action and started building a digital supply chain to power consumer service more directly, faster and more precise from Nike, while prioritizing durability.

Here are four things to know about how Nike is changing the supply chain game. New regional service centers increase capacity, speed and accuracy in a more sustainable way.
Prior to Winter 2020 in North America, Nike operated almost entirely through centralized national distribution centers in Memphis, Tennessee. Today, in addition to transforming its Memphis distribution centers into omnichannel facilities, Nike is also using a multi-node network including new regional service centers outside of Los Angeles to serve the West, in Bethlehem, Pennsylvania, to serve the East and Dallas to serve the South. In Europe, Nike added a regional service center in Madrid to begin scaling its distribution network beyond its European logistics campus in Belgium.

Nike’s multi-node regional distribution network is supported by advanced demand sensing and inventory optimization technology platforms that increasingly help Nike forecast, plan and shape individual consumer demand.

“As we continue to build a digital-first supply chain globally to serve consumers more directly at scale, we have already tripled our capacity to serve digital consumers in North America and Europe, in the Middle East and Africa over the past two holiday seasons,” says Campion. “And we’re just getting started.”

Automation and technology are changing the way Nike works to serve the consumer.
“At Nike, adversity has always been a catalyst for innovation and fueled our competitive separation, and the past two years have been no different,” says Campion. “The challenges and constraints imposed by the pandemic have driven our teams to transform the way we serve consumers through the implementation of new technology platforms, automation and process improvements in our operations.”

Using artificial intelligence and machine learning, Nike leverages technology to position the products consumers value most and deliver them faster, more accurately and without compromising durability. In addition to the use of regional service centers, services such as buy online, pick up in store (BOPIS), ship to store, non-emergency shipping option for consumers who grant the sustainability prioritization and direct order drop-off help ensure consumers have, as Campion says, what he wants, when and where he wants it.

In distribution centers, Nike has also deployed more than 1,000 “cobots” (collaborative robots) to help sort, pack and move products, speed up order fulfillment, alleviate physical challenges and enable people to focus on activities with higher added value.

Efforts to package, ship and refurbish products more sustainably benefit the consumer and the planet.
Nike believes in the power of sport to move the world forward. By reducing the number of split packs and leveraging pop-up boxes made of 65% recycled content and 35% virgin material, Nike has optimized its packaging for the benefit of consumers and the environment in the long term.

“At Nike, our mission is to provide inspiration and innovation to every athlete* in the world,” says Campion. “We also believe we need to protect the planet and the future of sport, by creating, testing and building momentum around consumer and operational solutions that address the issues we face around carbon, waste, water and chemistry.”

Ground-only transportation, available throughout the continental United States, offers a less carbon-intensive option than air travel. Additionally, this no-rush option also gives Nike teams more time to prepare an order and get it through. Finally, eco-friendly initiatives such as Nike Refurbished extend the life of eligible products by taking lightly crafted, slightly imperfect kicks and hand-reconditioning them for sale at select Nike Factory, Nike Unite, and Nike Unite stores. and Nike Community.

Nike is focused on powering the people who power Nike.
“I’ve always thought that at Nike it’s both professional and personal,” says Campion. “Simply put, the global supply chain is about people and at Nike, our supply chain is powered by an extraordinarily talented and diverse team around the world.”

During the pandemic, Nike has prioritized the health, safety and well-being of its teammates above all else. It started with enhanced COVID protocols and COVID sick leave and pay continuity for essential workers in manufacturing, distribution centers and retail stores. Today, this extends to investments in career development, training and community volunteer opportunities. In the United States, Nike provides employees with resources through a partnership with the University of Memphis offering online degree programs focused on personal success and career development.

“Based on an operations and supply chain model pioneered by Phil Knight in business school, we have efficiently and effectively served and delivered innovation to athletes* for the past 50 years,” says Campion. “Today, our teams are fueling a supply chain and technology transformation that will allow Nike to serve consumers more directly over the next 50 years. Their resilience, strength and creativity will continue to fuel Nike. Our teams at Nike have been and continue to be our greatest competitive advantage.

Last month, Nike was named the world’s most valuable clothing brand based on brand value.

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