Product details

This case deals with the problems experienced by Nike, the leading manufacturer of shoes and other sports equipment in the world, in implementing a new software application to streamline its supply chain and manufacturing processes. Nike sourced its products from manufacturing facilities located in the developing Asian countries like Taiwan and Korea. Consequently, the company had a complicated supply chain system where orders were placed by retailers six months ahead of delivery dates. These orders had to be forwarded to the factories in Asia and the final product had to be shipped back to the retailers. In 1999, the company embarked on a massive IT project costing USD400 million, to implement a new supply chain system along with some other customer relationship management (CRM) applications. i2 Technologies Inc was contracted to implement the supply chain software. The project was still in its initial stages in early 2000, when Nike started using the new software to input data. By late 2000, Nike had a major inventory problem on its hands. Analysts said that, among several other reasons, the most important reason for the problem was that Nike and i2 did not communicate well with each other. Both companies were also hasty in taking steps and did not bother to test the software rigorously. Eventually, the problems were sorted out and, by mid-2003, Nike was obtaining considerable advantages from the new system.