Nike Process and Selection

What type of product flow do they use?

Nike uses an assembly line flow. “An assembly line flow is characterized by a linear sequence of operations. The product moves from one step to the next in a sequential matter from beginning to end.” (pg. 57 Operations Management) They also use a project flow for a small portion of the business. On Nike.com you can customize your own shoe, from the shoes provided to you on the website. A project flow is used for unique or creative products. Each unit is made individually and is different than any other unit. So for Nike when and order comes in from the customer, each shoe is going to be made different from others, whether it be the color or style of the shoe.

What type of customer order do they process?

Nike uses a “Make to Stock” customer order which provides a fast service to customers from available stock. Make to stock has a standardized product from the producer, not specified by the customer. “Everything is keyed to producing inventory in advance of actual demand in order to have proper products in stock, for when the customers call (pg. 60 Operations Management).” In the make to stock customer order process, products are not always readily available. Customers can put orders through but the products can be on back order and they will have to wait until more of the product is produced. They alse use "Make to Order" because there are customers who customize their own shoes online and then Nike has to make the orders as they come in, they will not have them in stock

Which cell do they fall into in the process characteristics matrix?

Nike falls into the continuos and assembly line cell. This cell consists of order type, flow of product, product variety, market type, and volume. Nike has a large batch, a sequenced flow of product, a high product variety, a mass market type, and a high volume.

What are some of the factors influencing their process selection?

The factors that influence their process selection are the fact that they have a high volume and standardized product. They have to produce a lot of shoes and the shoes are made by the producers not the consumers, so they are not made to order they are mostly always in stock.

Can they adopt any of the mass customization methods discussed?

Nike has already adopted the mass customization medthos dicussed. On Nike.com you can customize the shoes they provide you to make alterations to, whether it be color or the design on the shoe.

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Nike Inventory

Inventory is one of the most important operations management responsibilities of any company because it affects the delivery of goods to customers, which controls the amount of product a developed business makes.

Nike Inc., a company that focuses on the distribution and sales of finished goods, operates in the areas of footwear, apparel and sporting equipment.

Operating in various countries as well as states, the Nike Company has many retail locations which house their store’s stock supply of merchandise on their grounds, keeping replenishment of materials to meet demands.

The various supply of inventory includes merchandise in different sizes and colors to satisfy customer preference during regular shopping occasions as well as times where there are holiday rushes for the “last minute” and/or “perfect gift”.

The various points of inventory structure, item cost, ordering cost, holding cost as well as stock out costs are determined by corporate offices after the reviewing of the store’s ability to meet annual profit goals as well as the store’s regional geographic.

These headquarters also view records which show statistics of items which are more popular in sales, this helps to determine the amount of a certain products to order to create a shipment schedule for each store.

In this retail market the demand is independent because it is influenced by market conditions outside of the control of operations. In this operation various materials of shoes, clothing, and sporting equipment is replenished before it runs out. This helps the company from a customer service aspect as well because they are able to deliver a product in a timely fashion to each shopper.

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Nike Company Profile

NIKE is a leading sports, and apparel production company. It is also the worlds #1 leading shoe maker designing shoes for all sports ranging from football to golf.

Nike is a global company, which sells products in over 180 countries with the United States being its top consumer.

NIKE is lead by CEO Mark Parker who became company president in 2006. Chairman Phillip Knight and VP/CFO Donald Blair also help operate NIKE on a major level.

One of NIKE's most recent company moves was the purchase of Umbro in 2008 which is hoped to increase revenue in the near future.

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Re-Use a Shoe

Nike currently has the fund raising project in affect in their retail stores entitled, “Sole In, Peace Out” where they practice their reuse-a-shoe effort. This is a project where old used tennis shoes of any brand are donated to the company and recycled in an effort to build basketball and tennis courts, running tracks, soccer fields, fitness flooring and playground safety surfacing around the world.

This task is performed by collecting shoes through recycling programs, other Nike stores and shoes that have been returned due to material defects or even donated shoes from customers. These shoes are collection at various Reuse-A-Shoe drop off centers or even just by visiting retail stores, you can also ship the shoes to any other the processing centers in Oregon.

At the processing centers the old shoes are processed into three types of raw material which are rubber from the outsole, foam from the mid sole and fabric fibers from the upper. Through the partnership with companies such as Atlas Track&Tennis, Training Ground which provides rubber flooring, Rebound Ice which provides cushioned hard surfacing for basketball and tennis courts and Playtop which is associated with children’s safety surfaces the scrap materials and materials from the worn shoes are grinded and reused to become part of facilities around the globe or even part of new Nike shoes/apparel.

There are not any recommendations that could be suggested for this project because Nike allows participation from the consumer as well as outside industries and other retailers as well in an effort to gain 100% participation in creating a “greener” society.

Gantt charts are used by Nike Co. in instances where they are launching store openings and want to estimate project release dates. The use of these charts help to give estimates of how long it will take to open new sites for stores as well as create a budget for these projects.

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