The expertise required to undertake a project with the complexity and size of NSC could not all reside within Nike. Although the company has an extensive IT department, it was clear that the company was going to need significant amounts of help from outside consultants. Many of the key consultants on the project came from the companies from which Nike bought the software. The SAP solution that Nike purchased is not similar to buying Microsoft Office.
Where you can simply install the Office software on a machine and have it up and running, SAP has teams of consultants that help its customers with training, deployment, and customization of its products to fit the needs of the organization. Nike had teams from SAP, Siebel, i2, and Rentrak working on the project to assist the internal team. Another key component of the project management strategy of the NSC team is the methodology of deployment. Attempting to build the entire solution in one stage and flipping the switch to the new system would be too big of a business risk.
With every complex solution, there are unforeseen difficulties and bugs to fix for months after the solution is deployed. As a result, the NSC team decided to break the project up into logical geographical components. The project was divided up into five key components: Canada, United States, Europe, Global Operations, and the rest of the world (Japan, Malaysia, Philippines, Singapore, and Thailand). Canada was chosen to as the first country to implement the solution as a test case for the rest of the world.
Each geographical area had its own implementation schedule, including specific implementations of each software product and a Go Live date. NSC Information Technology Infrastructure As one can imagine, Nike Supply Chain consists of the integration of a large variety of software products. The size and complexity of the solution is as vast as the global nature of the company. Rolling out NSC requires utilizing new software solutions from leading Supply Chain Management companies, but also the integration of existing systems.
The NCS solution consists of five main components: Supply Chain Foundation Software from SAP, Customer Relationship Management Software from Siebel, Business Planning Software from i2, Online Order Tracking from Global Logistics Village, and Product Flow Analysis from Rentrak. The foundation software for NSC is SAP’s Apparel and Footwear Solution. The foundation software is the fundamental backbone of the solution that all other software is built upon or integrated into.
SAP is the world leader in providing Enterprise Resource Planning software to large companies, so its ability to integrate disparate systems was key to the success of NSC. Another possible reason that Nike chose SAP is its reliance on SAP for other information technologies is the company. Nike also uses the mySAP. com family of solutions “as the core information technology platform for its worldwide operations. ” (SAP) SAP Apparel and Footwear Solution consolidated all of the legacy and other software into five core systems.
The solution allows for users to get financial information, view order fulfillment information, and also view the logistical data in the supply chain. The solutions is designed specifically for the unique needs of the apparel and footwear industry, which means the structure of the solution will better ensure that NSC Project goals are met. NSC Project includes deployment of solutions designed to assist downstream in the supply chain as well. For the Customer Relationship Management component of the chain, Nike uses Siebel.
The Siebel component of NSC is ultimately designed to assist account managers at Nike in effectively servicing the 38,000 retailers worldwide through which Nike products are distributed. Siebel helps account managers better forecast sales volumes, “improving forecast accuracy and minimizing out-of-stocks. ” (Siebel) It also helps Nike with the implementation of marketing programs, facilitating the ability to track performance with the customer. One of the main reasons for implementing a Supply Chain Management solution is gaining the ability to do effective business planning.
Nike uses i2 to do activities such as long-range and short-range demand planning, and supply planning. The software is designed to provide visibility along the entire supply chain to facilitate better organization of the supply chain. This includes activities in “procurement, manufacturing, distribution, and warehousing. ” (i2) It is also designed to allow for Nike to detect problems along the supply chain quickly so that they can be resolved in an effective manner. Another key advantage of the i2 planning software is the logistical planning that it facilitates.
With an annual Cost of Goods Sold of over $6 billion dollars, minor adjustments and improvements to the logistical side of the business can have a massive impact to the bottom line of the company. i2 claims that its software can reduce lead times 10 to 40%, the logistical costs within a supply chain between 5 and 15%, and reduce inventory levels between 10 to 30%. The NCS Project also includes the online tracking of shipments. Software provided by Global Logistics Village called Intelligent Supply Chain allows for this to happen.
Online tracking of order shipments allows for Nike to quickly realize when orders fall behind schedule, or when a shipment date has been missed. This means that account representatives will be able to track down any potential problems and either resolve them or communicate them to Nike’s customers. Customer service is ultimately improved and dropped orders and customers can be avoided. The final piece of the NSC puzzle is software from Rentrak. One of the most important aspects of implementing an IT solution in its supply chain is the ability to analyze product flow from beginning to end.
The software that Nike chose as a part of its supply chain is called Supply Chain Essentials, developed by Rentrak. After being implemented in 2003, the software has been used for “managing a wide range of data involved in operations such as securing materials, invoicing products and tracking orders. ” The reason that Nike selected the software over some of Rentrak’s much larger competitor’s (IBM, Oracle, and others) is the ability for the software to be customized. Given Nike’s need to rush orders, or make other exceptions along the supply chain, Nike was able to develop a solution that fits the company’s needs.