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Homework answers / question archive / 1)What is the Nike manufacturing process and quality control like? What certifications does Nike have in manufacturing and product quality control? 2

1)What is the Nike manufacturing process and quality control like? What certifications does Nike have in manufacturing and product quality control? 2

Management

1)What is the Nike manufacturing process and quality control like? What certifications does Nike have in manufacturing and product quality control?

2. How is Nike's material management and inventory handling operations and handling going? What software does Nike use for inventory management or stock management that Nike uses?

3. What is Nike's inventory strategy? What kind of storage facilities did Nike use? bonded warehouses, public warehouses or private warehouses?

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Answer:

1.) 

It controls costs and uncertainties during the design process and in the supply chain by continuously evaluating and reducing the total number of materials used in its goods. Each process will continue to be improved by Nike. Since the 1980s, Nike has been expanding its product range and has become a part of many other sports and regions all over the world" (Choice level 2009), Nike's brand products, Nike Pro, Nike, Air Jordan, Nike Golf, Nike Skateboarding and other brands like Cole Haan, Hurley International, Umbro and Converse are currently on the market. The inspection of shoe quality is a vital skill for a master shoemaker as footwear building quality is very important in any shoe which you produce, buy or sell. Nike's quality expectations have risen, but does not allow Nike's partner to dry up - Nike invests time, energy and money to help Nike meet new standards. Duke's Zion Williamson Injury Wasn't Nike's First Quality Control Issue Nike has shown resilience to product mishaps in the past. Nike judges the quality of the design process according to the number of errors in the design and to its effectiveness of achieving its market requirements. 

 

Certifications:

 

NIKE is a signatory of the Social Labor Convergence Program (SLCP) and a member of the Sustainable Apparel Coalition (SAC) which seek to drive industry convergence on factory compliance to mitigate issues. 

 

ZDHC Wastewater Guidelines

Nike co-led the development of the Zero Discharge of Hazardous Chemicals (ZDHC) Wastewater Guidelines, a collective effort of all member brands in the ZDHC Foundation to continuously work to improve wastewater discharges. Through the power of collective action, one wastewater test per the ZDHC Wastewater Guidelines is valid for all member brands of the ZDHC.

 

 

Manufacturing Restricted Substance List (MRSL)

After the launch of the first industry-aligned Manufacturing Restricted Substance List (MRSL) in 2014, we have worked extensively with other global brands to expand it further. The latest ZDHC MRSL, published in January 2020, includes a broader scope of production processes, and includes chemical limits on formulations used to produce textiles, leather, rubber, foam, and adhesives.

 

Sustainable Apparel Coalition

Building on our collaboration with the Sustainable Apparel Coalition in sharing the Materials Sustainability Index industry-wide in 2012, we have recently taken a leadership role in the update of the SAC's Higg Facility Environment Module 3.0. Nike has started scaling the use of Higg Facility Environment Module across our Tier 1 and strategic Tier 2 suppliers in 2020. As Higg FEM evolves over the coming years we intend to scale even further.

 

Factory Compliance Ownership Program

Nike monitors finished goods supplier compliance with our Code of Conduct and Code Leadership Standards through regular announced and unannounced audits conducted by internal and external parties. We call this our Factory Compliance Ownership (FCO) Program. This includes audits by accredited third parties such as the Fair Labor Association (a neutral industry body) and assessments by Better Work - a joint initiative of the United Nations' International Labor Organization (ILO) and the International Finance Corporation (IFC), a member of the World Bank Group. Ratings assigned as a result of FCO assessments form the foundation of a supplier's SMSI score, driving business to high performing suppliers and initiating sanctions with suppliers failing to meet minimum performance expectations (Bronze rating). This encourages Nike's suppliers to fully own their compliance with Nike's Code of Conduct and Code Leadership Standards through effective management systems.

 

 

2.)

Past: 

Nike is the biggest running and sportswear seller on the planet. The multinational American company is perhaps the most prominent actor in the modern textiles industry as one of the world's leading brands. Nike sell a highly dynamic supply chain every year behind the hundreds of million shoes and other items. While this complexity is certainly facing major challenges, the strategic approach of Nike to supply chain management has proved to be a major contributor to his phenomenal success. Outsourcing and diversification are the main concepts behind Nike's supply chain. Nike contracts 100% of its production to independent manufacturers for footwear and clothing. This technique has been adopted by one of the earliest multinationals. Through efficient Management, Nike's Supply Chain Team learned quickly how to handle the increased logistical complexity associated with this outsourcing. Outsourcing is a risky practice inherently, but Nike effectively mitigated this risk from the start by thoroughly diversifying its supplier base.

 

In 2019, 112 separate plants in 12 countries manufactured the footwear components of Nike, with no plant representing over 9% of the brands. Nike is less susceptible to unpredictable events, such as accidents and extreme weather. Not being overly dependent on any site. This distributed method has its drawbacks, however. The provision of components from so many different installations poses a real quality management challenge. Nike ensures continuous contact with its suppliers, supporting suppliers in its lean management system and Total Quality Management (TQM) strategy to ensure that their high expectations for quality can be met at each stage of their development. Challenges from beyond the supply chain also came to this method. Nike opted not to take part in central control of supplier practices in the early phases of its pioneering approach to production outsourcing. However, Nike looked at her sourcing approach, and eventually adapted a new strategy, due to the rising customer demand and industry shifts. 

Current:

Nike's distribution, manufacturing and logistic activities were severely hit by the pandemic. According to his July annual report, net profits before taxes decreased by 40% over the previous year to $2.9 billion. Inventory swelled 31% to $7.4 billion on 31 May at the end of the year, following the pandemic that pushed the Nike shutter shops on its brisk China-market first and then worldwide, compared with $5.6 billion at the end of fiscal 2019. Nike's capacity to calibrate supply and demand, plus increasing production and delivery costs, was reduced by reduced shipments to wholesalers, labor shortages and other 'supplies chain consequences.' CFO Mathew Friend said on the call on profit for the first quarter of the year, in response, Beaverton, Oregon, accelerated plans for direct online sales to grow by 10% more than when wholesale goods are sold. The business said in its annual report that Nike Brand Digital was its 'most rapid-crop channel with a currency-neutral growth rate of 79 percent in each of its geographies of more than 50 percent,' for the quarter ends on 31 May. The athletic wear manufacturer clears the inventory by canceling the orders in the warehouse, providing discounts and displacing products intended for online shopping. 


According to his annual report, Nike's performance in raising average selling prices by 2020 had been "more than compensated" by higher US import tariffs. The pandemic has raised purchase cancelation costs and resulted in an obsolescence of product. Margins fell as its supply chain costs were spread over "a less bulk cargo volume." COVID-19 CEO John Donahoe called the direct links between COVID and the customer "stress exam" of the business to set the objective of online sale 50%. In 2020, the firm sold Nike branded products online, directly ou via partners, for approximately 35 percent or $12.4 billion of its $35.6 billion.

Softwares:

A new version of their inventory management program was introduced by Niké in 2001. The idea was to help predict what products they would most sell, and thus prepare the correct supply to meet the demand. The new stock control software. They will first develop a demand forecast and prepare a production plan based on that forecast. That's how most large companies (and some small companies) decide how they operate. To follow up their inventory, Nike has invested in technology. This involves inserting RFID chips in their shoes to help them understand how they market their shoes. This will allow the company to know, in theory, which of its stores have the inventory and which do not fulfill the digital order. Celect, a technology company created by two professors from MIT, has also been acquired by Nike to increase its capacity for inventory management and selling more products directly to the customer. 

3.) 

Past:

Nike walks throughout the competition. Simply put. The business is the world's most valuable brand in sports and worth an enormous $15 billion, with over 74,000 employees all over the world. Its greatest source of revenue is unexpectedly shoes, which overwhelmingly flush out the clothing and sports equipment. Shoes are very labor intensive, which makes their domestic production more or less unsustainable given the high labor cost in the United States. It is therefore no wonder that 99% of all shoes sold in the USA come from abroad. Nike is taking this further: the company produces not only all its shoes in other parts of the world but also supplies about 85% of its footwear on lean lines. Compared to the conventional delivery models, Nike's Lean Supply Chain saves the firm $0.15 per unit. This saving is a serious competitive advantage for a business that moves over 900 million units annually. Nike's low overhead production costs are vital to productivity. The Nike footwear business requires the services of independent contract manufacturers in 14 countries around the world instead of owning and running its own factories.

In Vietnam, China and Indonesia, the bulk of the independent plants—96 percent—related to no more than 5 percent of the overall footwear production of Nike.

Current:

Switching for an initial digital distribution approach, "everyday optimizing demand and supply worldwide," along with close cost control are the main tenets of what Nike managers called their Tuesday income call "corona virus playbook." In a unique position to meet violent demand swings, Nike's supply chain can move around the world with COVID-19. The supply chain.  For over a year the organization focuses on the use of data to perfect service, emphasizing visibility of inventories and sensing demand. In June, the former CEO Mark Parker said that the company tracked almost all its unlicensed clothes and shoes by using RFID labels to send consumers exactly what they wanted quickly. The value of inventory positioning would increase as constraints on work and the transfer impede full-fledging operations in an environment of deprived customer demand. 

References:

1.) http://panmore.com/nike-inc-operations-management-10-decisions-areas-productivity

2.) https://www.cleanchain.com/blog/how-does-nikes-supply-chain-work/

https://www.fm-magazine.com/news/2021/jan/coronavirus-supply-chain-disruptions-kelloggs-nike-hp.html

https://blog.ordoro.com/2012/01/24/nikes-inventory-management-solution/

https://www.google.com/amp/s/www.fool.com/amp/investing/2019/08/16/nike-makes-moves-to-control-its-retail-inventory.aspx

3.)

https://supplychainx.highjump.com/nike-supply-chain.html

 https://www.supplychaindive.com/news/nike-covid19-coronavirus-optimizing-demand/574847/

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