Facility Layout of Nike Shoes

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    Introduction

    Nike, Inc. is an American multinational corporation thatis engaged in the design, development and worldwide

    marketing and selling of footwear, apparel, equipment,

    accessories and services

    The company takes its name from Nike, the Greek

    goddess of victory

    It is the world's leading supplier of athletic shoes and

    apparel and a major manufacturer of sports equipment The brand alone is valued at $10.7 Billion making it the

    most valuable brand among sports businesses

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    Products Their first products were track running shoes

    They currently also make shoes, jerseys, shorts,

    baselayers, etc. for a wide range of sports, including

    track and field, baseball, ice hockey, tennis,association football (soccer), lacrosse, basketball, and

    cricket

    Nike recently teamed up with Apple Inc. to produce the

    Nike+ product that monitors a runner's performance viaa radio device in the shoe that links to the iPod nano

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    PORTFOLIO OF BRANDS

    Converse Inc.

    Hurley International

    Jordan Brand

    Nike Golf

    Sold Starterin 2007 and Bauer Hockey in 2008

    The company sold Umbroin 2012 and Cole Haan in

    2013

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    The Making of the Shoes1) The Design Process

    -establish target price, target audience and product

    features

    -produce "tech package" to send to subcontractors in

    factories in Europe and Asia

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    2) Supplies

    A. Raw Materials

    -fabric

    -plastic-rubber

    -foams

    -metallics

    B. Textiles and Leathers

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    3) Cutting

    In this department, the top part of the shoe or the "upper" is made

    4) Sewing (of upper section above the sole)

    In this process, the upper portion is sewed into a design form

    5) Stock fitting (prepares the sole)

    The sole of the shoes are prepared in this process.

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    SUPPLIES :

    RAW MATERIAL

    TEXTILES & LEATHERS

    CUTTING SEWING

    STOCK FITTING

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    6) Lasting (prepares attachment of upper to the

    sole)

    The upper portion of the shoe prepared is attached to the sole ofthe shoe

    7) Heeling (attaches and shapes heel bottom to

    final form)

    After the upper portion is attached to the sole of the shoe, the heel

    is attached to the sole and is given its final form. This process is

    termed as heeling

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    SUPPLIES :

    RAW MATERIAL

    TEXTILES & LEATHERS

    CUTTING SEWING

    STOCK FITTINGLASTING

    HEELING

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    8)FinishingMachines smooth out the excess material hanging over the insole

    by tucking it back in underneath the shoe

    9) Treeing (attaches accessories)

    The shoe laces and accessories are put in place for the finalconstruction of the shoe

    10) Distribution & Trading CompaniesAfter the manufacturing process, the shoe is then shipped todistribution and trading companies where it is then distributed to

    retailers and sold to consumers

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    SUPPLIES :

    RAW MATERIAL

    TEXTILES & LEATHERS

    CUTTING SEWING

    STOCK FITTINGLASTING

    HEELING

    FINISHING TREEING

    DISTRIBUTION &

    TRADING COMPANIES

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    Price BreakdownUsing a typical Nike Shoe from production to retail:

    -Production Labor $2.75

    -Materials $9.00

    -Rent, equipment $3.00

    -Supplier's operating profit $1.75

    -Duties $3.00

    -Shipping $0.50

    -Cost to Nike $20.00

    -Research and Development $0.25

    -Promotion and Advertising $4.00

    -Sales, Distribution Administration $5.00

    -Nike's operating profit $6.25

    -Cost to Retailer $35.50

    -Retailer's Rent $9.00

    -Personnel $9.50

    -Other $7.00

    -Retailer's Operating Profit $9.00

    -Cost to Consumer $70.00

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    Advantages of product layout Mechanization of material handling system is possible in order to

    reduce the cost of same by considerable amount.

    This layout requires less floor area per unit of production

    Manufacturing time is smaller which reduces the investment in work-in-

    process inventories.

    Delivery commitments to customers are more reliable and easy to

    conform.

    The work is simplified by breaking into elemental tasks that may be

    mechanized wherever possible. It leads to the reduction of labor cost.

    Same types of jobs lead to the training and specialization among the

    workers. Quality control is easy to exercise and more effective.

    Materials requirement planning may be done more easily and

    accurately.

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    Conclusion Nike does not directly own any factories; they hire factory

    owners to produce the shoes using the materials and designsprovided by Nike.

    The largest producers of Nike shoes are the factories located

    in China, Vietnam and Indonesia.

    Malaysia, Pakistan, India and Thailand are other majorproducers

    The Nike Company focuses almost exclusively on designing

    the shoes and, after the manufacturing, advertising and

    marketing them in the most appealing way possible.

    Though their facilities comply with local labour standards,

    generally, they have not met U.S. standards.

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