Nike is a reputable organization that began its operations in the year 1964. The company headquarters is in Oregon in the United States, while its main operations revolve around manufacturing and selling footwear, sportswear, sports equipment, and clothing. Its geographical segments include North America, Africa, China, Central, and Eastern Europe, and Japan. Nike has undergone growth over the past two decades. Its success can be attributed to the flexible nature of its supply chain activities. Generally, Nike’s supply chain strategy generally incorporates three core principles: outsourcing, diversification, and corporate social responsibility. The company outsources its production activities to focus on other core activities that give it a competitive advantage, such as marketing, innovation, and designing. Diversification has enabled the company to constantly invent new and unique products, a factor that has enabled it to remain competitive in the market over the years. Thus, it is critical to describe the supply chain of Nike.

Nike’s supply chain

Nike has a supply chain department that coordinates all its supply chain functions and ensures timely delivery of products to the consumers. Nike's supply chain is centralized since important decisions involving designing, outsourcing, and logistics are made in Beaverton, Oregon, the company’s headquarters. Generally, Nike's products have a high demand and short product life cycle. The supply chain is characterized by a short lead time and reliable suppliers. Thus, Nike's supply chain strategy involves subcontracting that facilitates a flexible production system. The company uses the SAP R3, a planning tool that ensures centralized demand management, consequently facilitating collaboration with the outsourcing companies.

Nike manages demand for its products by using a futures program that requires retailers who stock Nike's products to order 80%of their inventory six months in advance for guaranteed delivery.

Manufacturing

Nike's supply chain strategy involves subcontracting that facilitates a flexible production system that meets the demand and suits the needs of the highly fluid market. Independent contractors source the raw materials used in the manufacture of its products. Nike manufacturing activities are outsourced from its partners in China, Thailand, Cambodia, Vietnam, and Indonesia. Its suppliers include Pou Chen, Fulgent Sun International, Delta Galil, Eagle Nice, and PT Pan Brothers. Nike has diversified suppliers to avoid overreliance on a single supplier. In 2019, Nike received its footwear components from 112 factories located in 12 countries. However, China supplies 40% of Nike's...