SCM & ERP Software Implementation At Nike: from Failure To Success

Submitted To:Prof. D.N. Verma

Submitted By:Aakriti AnandAnkit Singh RathoreArnab SenguptaJasneet KaurShivani SalujaShreen Singh.....

CONTENTS

• Introduction: NIKE• NSC, SCM and i2• i2’s debacle• Reasons for i2’s software failure• SAP AFS ERP Implementation• Benefits • Conclusion

Introduction: NIKE

• Founded in Jan 1964 by Philip H.Knight and his coach as Blue Ribbon Sports

• Rechristened as Nike in 1978 • Manufactures:– Sports equipment– Sports wear– Apparels – Accessory products

• Sales in over 140 countries

Q.EXAMINE THE ROLE OF ACCURATE

DEMAND FORECASTING FOR A BUSINESS.

Enhances the Company’s ability to respond to changing conditions

Reduces the Inventory and Capital Investment risk

Improves Process, Information and product quality

Improves service to meet the customer needs.

DEMAND FORECASTING

Examine the limitations of the Demand Planning Software.

Integration with existing systems

Slow due to heavy customization

Vulnerability to crashes

Unable to handle the required variables to generate forecasts

Reasons for failureIgnored i2 recommendations to minimize customization

Tried to accomplish too much too fast

Failed to realise what is achievable

Did not hold review meetings to discuss computerized forecasts

Elaborate on the measures that can be taken to overcome demand forecasting problems

DEMAND FORECASTING OF NIKE

• i2 software implementation to match supply with demand.

• Cost of this project was US $40 million.• i2 was implemented to reduce the amount of

raw materials.• Due to heavy customization, the software

became slow and proper demand could not be generated.

MEASURES TO OVERCOME DEMAND FORECASTING

• Well equipped and competent system.

• Continuous interaction with customers.

• Proper analysis of data.

• Supplier and retailer feedback.

Nike`s i2 debacle softwareImplemented in 1991. But many problems

arose:-

1. i2 was inexperienced2. Nike demanded high degree of customization

3.nike put up too strict deadlines.

ERP from SAP

• Integrated AFS from SAP, i2 planning software and Siebel CRM software.

• This was based on orders and invoices rather than forecast.

• Training and testing was done from the very beginning.

• Resulted in :-Decrease in lead time Better integration of departments.

Implementation is a complex process

Setting realistic goals

Steady Approach

Lessons Learned

Lessons LearnedFlaws in forecasting models

Adequate training

Testing

Suitable Business Models