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This document provides a summary of operations management strategies at Nike Inc. It discusses Nike's operations functions, objectives, unique production methods, and strategic approach. The key objectives for Nike include quality, speed, dependability, cost, and flexibility. Nike transforms various inputs like materials, energy, and customer requirements into finished goods. It manages resources and networks at all operational levels to meet business needs and satisfy customers.
This document provides a summary of operations management strategies at Nike Inc. It discusses Nike's operations functions, objectives, unique production methods, and strategic approach. The key objectives for Nike include quality, speed, dependability, cost, and flexibility. Nike transforms various inputs like materials, energy, and customer requirements into finished goods. It manages resources and networks at all operational levels to meet business needs and satisfy customers.
This document provides a summary of operations management strategies at Nike Inc. It discusses Nike's operations functions, objectives, unique production methods, and strategic approach. The key objectives for Nike include quality, speed, dependability, cost, and flexibility. Nike transforms various inputs like materials, energy, and customer requirements into finished goods. It manages resources and networks at all operational levels to meet business needs and satisfy customers.
SUBMITTED BY: - PRATIK BHUSAL STUDENT ID: - 139143197 DATE: - 28/04/2014 SUBMITTED TO: - THORBEN HAENEL WORD OUNT: 3!022 WORDS 0 PGBM03 Operations Management Student ID: - 139143197 Table of Contents I"#$%&'(#)%" 2 N)*+ I"(, %-./"0 O1+$1)+2 2 Operations Management in Nike Inc 3 O.+$/#)%"/3 M+#4%&5 /"& S#$/#+6)+5 4 Various stakeholders at corporate level strategy 5 Operations Objectives 6 Ouaty Ob|ectves 6 Speed Ob|ectves 7 Dependabty Ob|ectves 7 Cost Ob|ectves 8 Fexbty Ob|ectves 8 P$%&'(# &+5)6" /"& M/#+$)/35: A '")7'+ %.+$/#)%"5 5#$/#+60 /# N)*+ 9 R+(%--+"&/#)%"5 10 %"(3'5)%" 11 R+8+$+"(+5 11 1 PGBM03 Operations Management Student ID: - 139143197 I"#$%&'(#)%" Operatons managers across the word are producng mons of products amost every day to meet varyng requrements of the customers and to provde for the webeng of socety. Managng operatons n both manufacturng and servce enterprses have been evovng tremendous changes over the years wth many changes n market requrements, technoogy, gobazaton and customers expectatons of vaue and quaty (Coer and Evans, 2009, p. 13). As markets have become goba, enterprses were compeed to keep up to the requrements. Apart from market and ndustry reated factors and ther mpacts, operatons management has aso been nuenced by conscousness towards soca responsbty, safety, energy cost, protecton aganst terrorsm etc. To keep up to the requrements, operatons management has come up wth dynamc methods and ehectve busness strateges n many busness organzatons many wth a vew to provde hgh-quaty goods and servces so as to provde maxmum satsfacton to the customers. Ths paper presents a bref report about operatons methods and strateges mpemented at the organzatona eve n Nke Inc. Ths report w outne the prncpa operatons functons beng carred out n Nke Inc. and descrptve anayss on process strateges and operatons procedures empoyed at ts organzatona eve. 2 PGBM03 Operations Management Student ID: - 139143197 N)*+ I"(, %-./"0 O1+$1)+2 Nke s one of the most admred brands across the word. Nke s a words No- 1 shoe and Appare Company, headquartered n Beaverton- USA that desgn, deveops and markets sports footwear, appare and equpments. It uses ts own reta outets and other thrd party seers across the word for marketng ts products (Reuters.com, 2014). Nke Inc. has been ranked as #126 by Fortune 500 Companes accordng to the statstcs carred out n May 2013 (Hoovers.com, 2014). When t comes to Nkes market strengths, t has been en|oyng a strong market poston n varous segments wth ncreasng market share from 14 percent n 2006 to around 16 percent n 2009. The company has been hghy successfu n budng stronger brand mage through varous advertsng and sponsorshp campagns. Its brand vaue has been ncreasng amost 6 percent year-on-year to reach to a tota of $14,528 mon. Compared to many other brands and we known names n sports wear currenty avaabe n the market, Nkes products have aways proved hghest quaty by ncredby addng to the brand reputaton and brand oyaty among ts customers across the word (Market ne, 2013). Operations Management in Nike Inc In Nke Inc, the operatons management team s concerned wth those actvtes that enabe the company to transform a range of prmary nputs such as materas, energy, customers requrements, nformaton, human sks etc to outputs for the use of utmate customers (Brown, Bessant and Lammng, 2013, p. 4). As customer satsfacton and meetng the requrements of other stakehoders are at the very heart of operatons management, the operatons s not |ust about a mted or specc functon, but s a company-wde actvty that nks up a number of dherent areas and utzes these to hep customers meet ther needs. As Nkes operatons management and ts functona areas are concerned, t has made sgncant contrbutons to the company and many 3 PGBM03 Operations Management Student ID: - 139143197 to ts customers as we as socety at arge by provdng mproved quaty of goods and servces, mprovng workng condtons, utzng technoogy for nnovatve products deveopment and ncreasng productvty. Nke has been abe to ncrease ts productvty through measures such as use of technoogy, newer producton methods, strateges etc (Greasey, 2009, p. 6). The operatons management n Nke Inc payed cruca roe n managng the transformaton of ts nputs n to nshed goods. As depcted above, the nput actvtes ncude two categores of resources- transformng resources and transformed resources. Transformng resources are factes such as budngs, equpment, technoogy, pant, process etc. Transformed resources are eements that are acted on by the process of transformng resources. There are bascay three types of transformed resources- materas, nformaton and customers. Materas are transformed ether physcay by manufacturng or by ownershp or by storage. Informaton s transformed by property by possesson, by storage and by ocaton. Customers are transformed ether physcay or by ocaton or by psychoogca state (Greasey, 2009, p. 6). At Nke Inc, the operatons management contrbuted to the success of ts busness wordwde by managng the resources and networks at a eves of operatons by provdng what the busness actuay needs to survve and prosper. Nke nnovated newer knds of products, acheved unque competences and ganed hgher margns through ts strategc operatons management. It has been abe to satsfy ts customers by achevng four 4 Soure: Greas!e"# 2009# p$ 7 PGBM03 Operations Management Student ID: - 139143197 basc goas; 1) by reducng the tota costs of producng products by beng emcent n transformng materas to nshed goods, 2) by ncreasng revenues by promotng outstandng customer satsfacton by deverng supreme quaty of goods, reabty etc, 3) by reducng the amounts of capta empoyed and 4) by provdng the bass of future nnovatons (Sack and Nge, 2009, p. 3- 4). O.+$/#)%"/3 M+#4%&5 /"& S#$/#+6)+5 Strategy s one of the most wdey used buzzwords n the area of busness and management. Strategy s a drecton, vson or management deas that are deveoped wth a vew to match organsatons resources to ts changng envronment and n partcuar ts markets, customers and a other stakehoders to meet a ther expectatons (Greasey, 2009, p. 23). For strategy desgnng and strategc decson-makng, the management has to evauate both nterna and externa envronments of the rm. Sack, Chambers and |ohnston (2010, P. 62) stated that operatons strategy s concerned about the patterns of strategc decsons and actons that do generay set the roes, ob|ectves and actvtes of the overa operatons n the organsaton. Greasey (2009, p. 24) descrbed three basc strateges that are generay found at dherent eves of an organsaton. They are corporate eve strategy, busness eve strategy and functona eve strategy. Corporate eve strategy provdes a ong-term vson and msson wth cear gudance on varous aspects and actvtes that can satsfy specc requrements of customers and other stakehoders. Busness eve strategy s concerned wth the products and servces that are ohered n the market and are dened at the corporate eve. The thrd eve of strategy s operatona or functona strategy snce the functons of the busness such as marketng, operaton and nance etc for ong-term pannng to support the compettve edge are pursued by the busness strategy. % PGBM03 Operations Management Student ID: - 139143197 Various stakeholders at corporate level strategy It s crtcay mportant to recognze each specc stakehoder to the rm especay whe preparng msson statement, vson and organzatona goas. Transformng avaabe resources to products or servces that are capabe of meetng the requrements and expectatons of customers s at the very heart of operatons management, and therefore, t s mperatve to understand the needs and varyng requrements of customers. There are dherent stakehoders and a they mpact organsaton and ts actvtes n dherent ways. Bascay, there are three groups of stakehoders. 1- Interna stakehoders: Interna stakehoders are rms managers and empoyees. Empoyees are most mportant part of the organsaton and they w be generay concerned about certan matters reated to them such as |ob securty, rewards, recognton, ncentves and more mportanty |ob satsfacton. 2- Connected stakehoders: They are those partes wth drect connecton to the rm such as customers, nvestors, suppers, moneyenders etc. They a do have varyng needs. For nstance, customers are hghy concerned about quaty, vaue, utty, prce, servce eve, want-satsfyng power of the goods or servces etc. 3- Externa stakehoders those partes who can mpact the organsaton n other ways, many government, potca partes etc (Greasey, 2009, p. 25). Operatons management ams to acheve ong and short-term successes of the organsaton. For these goas to be acheved, the man goa of the rm shoud be to satsfy a the needs of stakehoders, many of customers to get hgh-vaued goods and servces. As far as Nke s concerned, the man customers are externa customers. Nkes customers across the word are hghy concerned about quaty and vaue for shoes, sportswear and other appares. Nke Inc ams to brng nspraton and nnovaton to every athete across the word (Nkenc.com, 2014). Its products are desgned and & PGBM03 Operations Management Student ID: - 139143197 deveoped wth hghest possbe nnovatve technoogy and the company constanty ohers hghest servce standard so as to bud oya customer reatonshp around the word. As ths s one of the man goas of the company, operatons management s partcuary concerned about mprovng operatona emcency so as to ensure customer satsfacton. Operations Objectives Operatons management s concerned about transformng nputs n to outputs by usng physca resources wth a vew to provde the desred utty to the customer by meetng organsatona ob|ectves of ehectveness, adaptabty and emcency. Hezer and Render (2009, p. 13) argued that operatons management s experencng modern trends from varety of forces such as gobazed trade, transferrng of deas and products and money at eectronc speed. These trends are goba focus, |ust-n-tme performance, suppy chan, rapd product deveopment, mass customzaton, empowered empoyees, ethcs and so on. As the busness envronment s argey nuenced by a number of chaenges and trends, operatons management requres tghty dened set of ob|ectves that are quaty, speed, dependabty, exbty and cost. Ensurng customer satsfacton s one of the most sgncant targets of operatons management. The ve basc operatons performance ob|ectves can aow the organsaton to measure ts operatons performance n achevng strategc goas ncudng ensurng of customer satsfacton. These ve basc operatons ob|ectves are ustrated beow: 9'/3)#0 O:;+(#)1+5 Ouaty s undenaby one of the most wdey used buzzwords n busness academcs. Most mutnatona corporatons mantan a speca team of management for ensurng and assessng quaty on a reguar bass. From operatons management perspectves, quaty s descrbed as an mportant 7 PGBM03 Operations Management Student ID: - 139143197 functon that necesstates three types of quaty costs- preventon, apprasa and faure costs. Preventon costs are those costs expended n an ehort to prevent dscrepances n operatons. Costs ncurred for quaty pannng, supper quaty survey etc can be consdered as preventon costs. Apprasa costs are those costs that are ncurred n the evauaton of product quaty and n detectng dscrepances. Faure costs ate those costs that are ncurred as a resut of dscrepances, ether nterna faure costs or externa faure costs (Neey, 2007, p. 70). Ouaty accordng to the operatons management perspectve s reated to how cosey the product or servce meets the speccaton requred by the desgn. Ouaty undoubtedy represents a ma|or part of compettveness. When a rm meets quaty requrements, the products or servces t ohers woud aso meet ncreased dependabty, reduced costs and mproved customer servce (Greasey, 2009, p. 28). Nke, for nstance, has ganed wder reputaton for that t has aways been successfu n mantanng quaty for ts shoes and appares. The company has mantaned a quaty assurance and quaty contro team to consstenty revew the quaty measures and resove ssues n a way to reduce customers compants regardng quaty. S.++& O:;+(#)1+5 Tme s another mportant matter of concern for operatons management. One basc assumpton s that there shoudnt be much tme deay between a customers request and recevng that product. Tme s consdered as a source of compettve advantage and the basc measure of operatons performance (Neey, 2007, p. 71). |ust-n-tme manufacturng has ganed consderabe attenton n recent years. It s purey based on the assumpton that the producton or devery of the goods or servce ether too eary or too ate w be wastefu ehort. The operatons management shoud want to do thng fast by mnmzng the tme deay between a customer askng for goods or servce and the customer recevng them. ' PGBM03 Operations Management Student ID: - 139143197 D+.+"&/:)3)#0 O:;+(#)1+5 As Greasey (2009, p. 28) noted, dependabty refers to persstenty meetng a specc target of devery tme for a product or servce to a customer. It can be dented and measured by the percentage of customers who receve a product wthn the devery tme promsed. Dependabty can be mantaned ony f the operatons management acheves speed and tme targets. When the management can mantan dependabty, t w certany ead to better customer servce and mproved customer satsfacton because of that he can trust that the product w reach to hm when expected. %5# O:;+(#)1+5 Costs n operatons ncudng both vsbe and nvsbe have become hot topcs of debate among academcans n nance management. How dherent costs mpact the operaton ob|ectves s an mportant matter of concern. Cost s that part of nance that s requred to acqure nputs and to manage the transformaton of nputs to outputs to make nshed goods or servces. As far as compettve advantage s consdered, keepng costs ower than that of compettors n the ndustry s one of the most crtca ob|ectves. Greasey (2009, p. 31) argued that a rm woud be abe to generate more prots than ts compettors when t keeps ts costs base at east equa to the costs of compettor or to hod a consderabe porton of market share f prce s ower than ts compettors prce. <3+=):)3)#0 O:;+(#)1+5 Fexbty refers to the abty of an organsaton to qucky change what t aready does or to adapt to changes when t requres. It w be possbe when a rm s abe to oher a wde varety of goods or servces to the customer and to change these oherngs qucky. Customers needs, wants and specc requrements are constanty changng due to a number of factors such as gobazed markets, nformaton technoogy, competton etc and therefore organzatons are aso requred to change ther oherngs accordng 9 PGBM03 Operations Management Student ID: - 139143197 to the changes n customers requrements. A rm needs to be exbe accordng to any one or more of the foowng cafeteras: 1- Products or servces- t s requred that a rm must be abe to respond qucky to changng customers needs and wants by oherng them new desgns, new products, new technoogy etc. 2- Mx- The rm s aso requred to provde a wde range of products or servces. 3- Voume- The rm needs to be abe to ncrease or decrease output n response to changes n demands. 4- Devery- The rm needs to react to changes n the tmng of devery of goods or servces. P$%&'(# &+5)6" /"& M/#+$)/35: A '")7'+ %.+$/#)%"5 5#$/#+60 /# N)*+ To desgn a product or servce s merey to conceve the genera ook, arrangement and workngs of that product or servce before t s created. It s one of the most essenta eements n deveopng a product or servce to dever a souton that the customer n the market expects. The process of concevng a new product or servce nvoves bascay three tasks; product deveopment, process deveopment and process desgn. Product deveopment s creaton of a new product whereas process deveopment s somethng reated to deveopng a producton method. Process desgn s reated to desgnng of new equpments and materas requred for producng a product accordng to a pre-determned process. 10 PGBM03 Operations Management Student ID: - 139143197 Due to changes n customers needs and tastes, companes are requred to deveop new desgns to meet varyng requrements of customers and therefore nnovatve desgn has become an mportant aspect of compettve advantage. Rapd deveopments n computer-aded desgn (CAD), computer-aded manufacture (CAM) the nkng of desgnng and deveopments of products wth atest technoogy and a myrad of other nnovatons to factate product desgn have postvey mpacted compettve advantage (Pfeher, 1995, p. 7). Nke has aways been strvng for mantanng superor quaty n desgn. The decson on materas-choce has been taken by consderng product quaty, customers concerns and broad soca responsbty aspects. Nkes choce of materas has envronmenta mpcatons for water, and, energy, greenhouse gas emsson, chemca use and sod wastes. Materas n Nke footwear and appare products are brought from around 900 dherent materas-vendors, but t doesnt drecty source wth these vendors snce the company s very partcuar about desgn and speccatons. Nke focuses on process desgn and vaue chan to drve sustanabty mprovements n materas. Nkes operatons management desgns ts shoes and other products wth very detaed matera-speccatons and by provdng these teams wth detaed nformaton requred for materas. For ths purpose, Nke has ntroduced Consdered Desgn n 2006 to enabe product creaton to easy compare materas and make nformed and sustanabe choces durng the desgn stage (Nkeresponsbty.com, 2014). 11 PGBM03 Operations Management Student ID: - 139143197 As detaed above, the operatons ob|ectves such as quaty, speed, dependabty, exbty and cost are to be consdered n product desgn, deveopment and process deveopment. For product desgn and process desgn, the operatons ob|ectves are as outned beow: Ouaty- the typca process desgn ob|ectves w be to provde approprate resources, capabe of achevng the speccaton of product or servces, and to make error-free processng. Speed- The desgn ob|ectves w be to compete t wthn mnmum possbe tme and to make output rate approprate for demand. Dependabty- the typca desgn ob|ectves w be to provde dependabe process resources and to provde reabe process tmng. Fexbty- the desgn ob|ectves w be to provde resources wth an approprate range of capabtes and to factate easy changes between processng states. Cost- the desgn ob|ectves w be to provde approprate capacty to meet demands and to emnate process wastes n terms of excess capacty, n- process deays and n-process errors etc (Sack, Stuart and |ohnston, 2010, p. 89). Product and process desgns are crtca components of transformng nputs to outputs. Use of nnovaton and technoogy for desgnng and performance ob|ectves are ma|or consderatons many because of that meetng customers needs and wants n a way that they are fuy satsed s at the very heart of operatons management ob|ectves. R+(%--+"&/#)%"5 In product and process desgns, human capta s an nevtabe power snce deas, knowedge and experence can pay crtca roe n product desgn and process desgns. The roe of decson makng, smuatons etc n product and process desgns has been we documented, but how human capta, many represented n terms of taent, sks, knowedge, nnovatve 12 PGBM03 Operations Management Student ID: - 139143197 deas, wsdom etc of peope n an organsaton can contrbute to the compettve advantage needs to be hghghted. %"(3'5)%" Based on Nkes exampe of operatons management, ths paper has crtcay assessed the operatona methods and strateges adopted at organzatona eve to make Nkes shoes and appare the most reputed wordwde. Ths paper has dened prncpa operaton tasks and anayzed the process strateges mpemented n Nke Inc. operatona ob|ectves are ustrated n deta and a process n terms of operatons ob|ectves s expaned to show how t heps n the achevement of operaton ob|ectves. R+8+$+"(+5 Brown, S., Bessant, |. R and Lammng, R., 2013, Strategic Operations Management Routedge Coer, D.A and Evans, |. R, 2009, Operations Management Cengage Learnng Greasey, A., 2009, Operations Management, Second Edton, |ohn Wey & Sons Ltd Hoovers.com, 2013, NI!" Inc# $ompany In%ormation, Retreved from www.hoovers.com/company-nformaton/cs/company- proe.NIKE_Inc.095b58e0d70133d6.htm Market ne, 2013, $ompany &ro'le( NI!" IN$, Market ne, EBSCO database Neey, A, 2007, Measuring &er%ormance) the operations management perspectives, ed. 13 PGBM03 Operations Management Student ID: - 139143197 Neey, A, Cambrdge Unversty Press, Nkenc.com, 2014, Consumer Ahars, Nkenc.com, Retreved from http://nkenc.com/pages/consumer-ahars Nkeresponsbty.com, 2014, &roduct *esign + Materials, Retreved from http://www.nkeresponsbty.com/report/content/chapter/materas Pfeher, |, 1995, $ompetitive ,dvantage -hrough &eople) .nleashing the &o/er o% the 0ork 1orce Harvard Busness Press Reuters.com, 2014, &ro'le NI!" Inc# 2N!"N3 Retreved from http://n.reuters.com/nance/stocks/companyProe?symbo=NKE.N Sack, N and Nge, S, 2009, Operations Strategy, Pearson Educaton Inda Sack, N, Stuart, S and |ohnston, R, 2010, Operatons Management, Sxth Edton, Prentce Ha, Pearson Educaton, Inc 14