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NIKE ERP IMPLEMENTATION

JUST DID IT FROM FAILURE TO SUCCESS

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NIKE: INTRODUCTION
Started in 1957 as an athletic footwear distribution company called Blue Ribbon Sports By Bill Bowerman Phil Knight : Track and field coach : Runner

In 1978 renamed as Nike

Product Range: Sports equipment Sports wear Apparels Accessory products

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NIKE: INVENTORY MANAGEMENT
Mid-1980, demand management system managed inventory Gloabal operations from US, Europe, middle east and Africa, asia pacific and LAC

After mid 1970, products manufactured by contractors around the globe

Orders required to be placed 6 months before required delivery date for 90% efficiency System was not equipped to deal with complications

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NIKE: I2 SCM
Supply chain software implemented by I2 Technologies in 1999

Expected Benefits To increase the scope of operations To help take orders from the customers and inventory management

To reduce order-to delivery time by about 50 percent

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NIKE: I2 SCM
To always ensure that supply always meets the demand as per the

prevailing marketing conditions

To reduce amount of rubber, canvas required to produce footwear

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WHILE IMPLEMENTING
Nike refused to use templates & methodologies System was too customized Increased employee turnover affected the system No third party integrators

Implementing both SCM & CRM

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NIKE & i2: ERRORS COMMITTED
Customization Improper Implementation No Sampling Process

Inexperience of i2

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NIKE: I2 DEBACLE
Over estimate demands to some shoes and Under estimate demand to some shoes System sent flawed data to Manufacturers

Slowed down the application & complicated to use

Resulted in users waiting long
Nike couldnt meet the retail demands
Finally prices of Nike shares fell sharply

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NIKE: I2 DEBACLE CONSEQUENCES
Not able to cater demands Reputation Lost Market Share Forced to sell in discounted prices

Higher shipping costs

Relations between nike and retailers was affected

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NIKE: SAP ERP TAKES OVER
Implemented sap along with its variant R/3 specifically designed for apparel and footwear industry Designed to streamline communications & lower operation costs

Supply chain project combined with CRM

Expected to reduce order to delivery date Main system implemented by i2

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NIKE: SAP ERP TAKES OVER
SAP AG and Siebel Systems for CRM Pilot testing of sap netweaver platform Implemented for business information warehouse

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NIKE: SAP ERP Benefits
Nike spent six years and $500 million on the project By 2004, the project was 80% complete Inventory levels declining Quicker design and manufacturing

Gross margeings to 42.9% in 2004 from 39.9% in 1999

Increased cash inflows

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FINALLY DID IT !