VALUE CHAIN OF NIKE

Just do it!
Prepared by:

Hemali anadkat (2) Banty haldhruwala (35) Monica mota (57) Hiral Parikh (61) Nishra Shah (94) Amita Ganava

What is value chain?

The network of firms that bring products to
market, from companies that produce raw materials to retailers and others that deliever finished products to consumer. Economic value is added through the coordinated management of the flow of phisycal goods and associated information at each stage of the chain. We can say that a value chain is a string of companies working together to satishfy market demand

THE VALUE CHAIN:

FIRMS INFRASTRUCTURE SUPPORT ACTIVITIES HRM PRODUCT DEVELOPMENT AND TECHNOLOGY PROCUREMENT

INBOUND LOGISTICS

OPERATIONS

OUTBOUND LOGISTICS

MARKETING AND SALES

SERVICES

PRIMARY ACTIVITIES

NIKE s Introduction:

Nike means the greek goddess of victory Major publically traded sports wear and

equipement supplier base in the U.S Head quartered in the portland metro politen area of oregon, near beaverton. Worlds leading suppliers of athletic shoes and apparel and a major manufacturer of sports equipments with revenue in access of $16 billion USD in 2007. Employed over 30,000 people world wide.

Contd
Nike markets its products under its own
brand as well as nike gold, nike pro, nike plus, air jordan , nike skate body,jeam starter, and subsidaries including cole haan, hurley international, umbro and converse.

Support activities:
1. Infrastructure:
Diversify business portfolio with new acquisitions Empowerment of top management. Structure of matrix. Focus on key countries, key factors, critical compliances. Drive a lean effective compliance process through strategic knowledge, remediations and varification. Drive a shared accountability and work place ownership of CR compliance. Encourage work ethics. Financially decipilne. Calculate risk taking. Strong financial position with minimal long term debts.

Contd..
2. Human Resource:
core values of the companies are honesty, competitiveness and team work. Operates with minimum of hierarchy. Lot of collabration and consensus decision making. Use matrix organisation. Balances creativity with structure and decipline. Strong management team and good corporate strategy in both north american and overseas market. Socializing Mix of new hires and promotions Promotions= consistency / company knowledge New hire employees= business minded

Contd
Network structure. Athelete management. Monetoring labour audit, compliance visit, brand
audits.

Contd
3. Technology:
First mover advantage in E-Commerce. Diversity and variety in products offered on the web (footwear, apparel, sporting equipments etc). Innovative designs in footwear enabling customers to design their own shoes online. AIR SOLE technology- specially used.

Contd.
4. Procurement: Just in time strategy. components arrive as they are needed. finished goods shipped after leaving assembly line. Safety stock buffer for lack of flexibility in supply chain. Bullwhip effect information about product demand gets distorted as it passes from one entity to next across supply chain.

Role of Inventory in the Supply Chain:

Improve Matching of Supply and Demand Improved Forecasting Reduce Material Flow Time Reduce Waiting Time Reduce Buffer Inventory

Economies of Scale Cycle Inventory

Supply / Demand Variability Safety Inventory

Figure Error! No text of

Seasonal Variability Seasonal Inventory

Inventory Classification:
INVENTORY

PRODUCTION APPLICATION

ABC ANALYSIS

DEMAND TYPE

OTHER

Raw Materials Components WIP Sub-assemblies Finished Goods

A Items B Items C Items

Independent Dependent

MRO

Primary Activities:
1.

Inbound logistics: Low production cost. Outsource non-core activities. Focus on their core-competencies of
Product design Maketing AIR SOLE Tech.

Due to virtual relationship with the companies

who assemble nike products allows them to switch to companies that provide low labour cost & a quality product. Worldwide supply chain project used by nike help it to reduce inventories and investment risk.

Contd
Shared process through a wholly owned
subsidiary called nike. In house manufacturing ( Nike IHM) produces many of specialized rubber, foam and plastic components used in its products. Nike IHMs primary facilities are located in portland oregon and st. louis, missain.

Contd..
2. Operations:
Centralisation of R&D in oregon. Application of NSRL. Nike requires manufacturing partners to devote environmental resources. Nike provides technological resources to its resources centre such as R&D centres, laboratories. Nike personnel in each factory to assist factory management. working on low and no packaging options. reduce box styles from 18 to 2. Corrugated card board. 100% post consumer content.

Contd
No heavy metal inks. no glues or solvents Boxes manufacture in zero net discharge
facilities.

Contd
3. Outbound logistic:
Strong control over its own distribution channel. Powerful suppliers one company is producing 40% of worldwide shoes. Ability for forward integration. Due to virtual relation with suppliers.

Reduce administrative cost. Reduce pay roll cost. Can increase the speed their product flows through
supply chain This allows them cut down on the amount of time required from the initial design to, production and then distribution.

Contd..
Nike is using HP servers , software and
consulting service to run their new supply chain project.

Contd..
4. Marketing and sales:
Brand recognisation and reputation. Higher allocation of marketing budgets. Use endorser in every sport. Emerging brand name. Strong customer base. Diversity and variety of products offer on the web. Ecommerce reduce the cost of good sold thus improving the bottom line.

Contd..
5. Services:
Improved service to meet customer/consumer needs through the use of the technology. Improved process , information & product quality. Provide customize shoes for customers. A company called planner has installed touch screen system in nike stores to allow customers to build their own shoes. Nike also allows customers to order customize shoes online through their

Thank You
Real leadership is not about prestige, power or status.It is about responsibility.