Nike’s supply chain sets the tone for the sportswear industry

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Nike’s ability to innovate and evolve has made it the world’s leading athletic footwear and apparel company. This is true not only of the near-universal recognition of the brand name, but also of its supply chain.

Sustainalytics’ Supply Chain Management Indicator ranks Nike in the top 1% of companies for “board-level accountability for supply chain issues, use of supplier audits and mechanisms to monitor non-compliant supplier practices”. Whatever challenges may arise in the future, Nike is ready to lead the way with innovative and sustainable solutions.

For decades, Nike has pioneered global supply chains. The company has contracts in dozens of countries with hundreds of stores, which source their supplies locally according to Nike standards. Not owning these facilities saves the company a lot of money, without tying up its resources.

What really sets Nike apart, however, is its willingness to implement new and dynamic supply chain strategies and tools.

As stated on the company’s website, Nike seeks to create “breakthrough sports innovations, by making [its] products in a more sustainable way, building a creative and diverse global team and making a positive impact in the communities where [employees] live and work. »

To achieve these goals, everything must flow as quickly and efficiently as possible through the supply chain, with optimal transparency along the way.

A culture of continuous innovation

For years, Nike has been an elite innovator in supply chain creation and management, incorporating new analytical strategies, such as Express Lane and lean manufacturing, as well as tools such as identification by radiofrequency (RFID) and 3D printing.

Expressway

In 2016, Nike rolled out its Express Lane strategy to reduce lead times and add value.

This program combines rapid prototyping with 3D and digital printing to minimize inventory while increasing delivery speed and, therefore, helping to increase customer satisfaction.

Lean Manufacturing

Nike has widely embraced lean manufacturing, originally developed by Toyota.

This manufacturing model enables companies to increase production, minimize waste, reduce costs, improve quality and increase profits by following five key principles:

  1. Identify value — What does the customer need, why and when does he need it?
  2. Map the value stream — It helps management better understand process flow and identify areas for improvement.
  3. Improve flow — Analyze every step to create efficiency and minimize waste.
  4. Establish traction — Focus on “pulling” product to the customer by basing production on consumer demand, rather than “pushing” product based on often inaccurate forecasts.
  5. seek perfection — Consistently focus on innovation and efficiency, focusing on what adds value and what doesn’t.

RFID technology

In 2019, Nike began using radio frequency identification, which provides greater visibility at every stage of the supply chain. This technology makes it possible to affix tags or smart tags to goods throughout the supply chain; these tags contain digital data that can be captured by a reader via radio waves.

Although similar to barcodes, data from RFID tags can be read outside of workers’ field of vision, eliminating the need for time-consuming and error-prone manual scanning.

This speeds up decision-making processes, which results in increased accuracy and efficiency. By reducing lead times and knowing exactly where its various products are at any given time, RFID helps Nike deliver the right product to the right customer at the right time.

Environmental footprint

For many years, Nike has been moving towards sustainable sourcing, zero manufacturing waste, reduced water and energy consumption, and renewable energy in its facilities.

75% of Nike shoes and apparel are now made with recycled materials, for example, and leftover materials are used in production to minimize environmental impact and reduce costs. The company also strives to use 100% recycled energy throughout the value chain.

Responding to the COVID-19 crisis

The coronavirus pandemic has affected industrial supply chains across the board. Even as diverse and widespread as Nike’s manufacturing suppliers are, the company was forced to cut manufacturing output when people around the world began to fall ill and factories were closed. Such disruptions have strained the chain’s adaptability.

Nike had to discern the strengths, identify the weaknesses and initiate the necessary improvements going forward.

The company has also stepped up efforts to use its manufacturing resources to help with the COVID-19 relief response. In partnership with health officials at Oregon Health & Science University, Nike used its facilities and materials to rapidly produce face shields for use as personal protective equipment (PPE) and air-supplied respirator lenses. filtered air (PAPR) for frontline workers.

Learn more with these related articles Thomas Insights Articles

  • Here are 5 principles that manufacturers are reducing to gain efficiency
  • Passive technology will push the RFID market to $13 billion by 2022
  • Will your next pair of sneakers be 3D printed?

Image Credit: Image courtesy of Nike.com

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