Nike Case Study

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Nike is a sports apparel and footwear company which first introduced their shoes in 1972. “At an investor meeting at its world headquarters in June 2011, NIKE, Inc. announced an increase to its fiscal 2015 revenue target to a new range of $28-30 billion, up from its previous target of $27 billion announced in May 2010. The company also increased its fiscal 2015 revenue target for the NIKE Brand to $24-25 billion, up from its previous target of $23 billion.” (Nike, 2014) In 2000, in an effort to streamline their demand and production process, Nike implemented the I2 system. The I2 system was a demand forecasting system to be utilized by the production planning department to predict customer demand for each type of product. An error in the model the system generated lead to the production of incorrect quantities of products. This lead to an overage of less desirable products and a shortage of desired products. The miscalculation “cost Nike more than $100 million that quarter. In addition, their share price went down 20% the day after they publicly announced the mistake.” (Magal & Word, 2009) The main personnel involved directly with this costly situation are the production planning department, the manufacturing department, the procurement department, the sales department and corporate management. The implementation of the I2 software was decided by corporate management and was to be used by the production planning department to create demand prediction models. The model data was then to be used by the manufacturing and procurement departments to purchase the necessary materials and create the required products predicted by the model. The sales department additionally had numbers that were entered into the system however these... ... middle of paper ... ...e software should have allowed for visibility between all departments which would allow for detection of any errors of a single department by the others. The error in the demand model itself should be researched to see if there is an issue with the program itself that needs to be resolved. Finally, a quality control system should be implemented to ensure that all data is checked and any further errors are addressed before it is too late in the future. Works Cited Leshinsky, G. (2008, February, 18). Nestle and Nike: How They almost failed. Retrieved from: http://recruitech.wordpress.com/2008/02/18/nestle-and-nike-how-they-almost-failed/ Magal, S. & Word, J. (2009). Essentials of Business Processes and Information Systems. Hoboken, NJ: John Wiley & Sons, Inc. (2014). Nike Inc., History and Heritage. Retrieved from: http://nikeinc.com/pages/history-heritage

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