The Origins Of Nike Commerce Essay

Nike was founded by Mr. Phil Knight and his accomplished drillmaster Bill Bowerman in 1964 and they started Blue Ribbon Sports. Knights aboriginal shoe was alleged Tiger and again began administration of shoes. Blue Ribbon got abundant success in 1971 and Knight changes the aggregation name “Nike”. In 1971 it alien Nike’s aboriginal cast line. Nike launched its artefact band in 1979. The new adaptation of its Air shoe which was absolute acknowledged and it was accustomed as Air Jordan; alien in 1985. Nike opened its aboriginal retail aperture in Portland, Oregon in 1990. In 1991 the aggregation was absolute acknowledged and its acquirement accomplished USD $3 billion. In 1999 aggregation started affairs its articles anon to barter from its website. Nike is the world’s arch sports and able-bodied shoes. Nike is the above architect of sports accessories with $18.6 billion USD in the year of 2008. Nike has 30000 advisers in worldwide. (Nikebiz:company overview, 2010)

Nike had generated profits of $97.4 actor and its accumulation abandoned bottomward by 50% in February 2001. Nike said that it was because of the abortion of accumulation alternation software produced by i2 technologies. Both companies abhorrent anniversary other. This abortion additionally accomplished Nike’s reputation. The accumulation alternation software was the aboriginal articulation of NSC (Nike Accumulation Chain) activity from SAP and additionally chump accord administration software from Siebel System. Analysts acicular out the accountability of customization of the software and over appeal forecasting. (Koah, 2004)

Company auspiciously implemented (NSC) Nike Accumulation Alternation activity by 2004. The (NSC) Nike Accumulation Alternation activity is centralized planning affective and manufacturing. At aftermost Nike got success in Implementing ERP and it became the adapted access for those who appetite to apparatus the ERP systems in their company. Christopher Koch (Editor of CIO Magazine) declared that “If it was easy, anybody would aloof do it.” In the backward 1990, best companies abhorred to acquire ERP because of the huge bulk of ERP systems. (Koch, 2004)

“The assignment of Nike’s abortion and consecutive backlash lies in the actuality that it had a complete business plan that was broadly accustomed and accustomed at every akin of the company. Given that resiliency it afforded the company, in the end the i2 abortion angry out to be aloof a acceleration bump.” (Koah, 2004)

Products Range

Nike has avant-garde ambit of sports equipment, active shoes, and jerseys and may alternative articles as apparent in bulk 1.

Figure Nike Articles (nike, 2010)

ERP (Enterprise Ability Planning)

ERP entitles a company’s advice arrangement which can accompany added carefully the company’s departments and functions like animal resources, accounts and inventories. It additionally creates the articulation amid barter and producers.

1.1 Introduction of ERP (Enterprise Ability Planning)

Enterprise Ability Planning is the action arrangement apparatus which manages appeal and supply. It has the adeptness to accomplish articulation amid barter and suppliers. ERP additionally provides the aerial bulk of affiliation amid purchasing, manufacturing, marketing, sales, acumen and marketing. ERP is the apparatus which can accommodate aerial akin of chump casework and abundance and additionally lower the cost. (Wallace & Kremzar, 2001)

Enterprise Ability Planning is a aggregation which access it sales by 20% because of ERP. The carnality admiral states that “ERP has provided the key to acceptable a absolutely all-around company. Design can be fabricated with the authentic abstracts and with the action that concretes appeal and accumulation beyond bound and oceans. This change is account billion to us in sales worldwide”. (Wallace & Kremzar, 2001)

The Director of ERP “For the aboriginal time ever, we acquire a acceptable handle on our approaching requirements for apparatus raw and materials. Back our chump appeal changes, we-ourselves and our suppliers-can administer changes to our schedules on a absolute accommodating and controlled basis. I don’t see how any aggregation can do able accumulation alternation administration afterwards ERP.” (Wallace & Kremzar, 2001)

1.2 Origin of the Appellation ERP

The Action Ability Planning ERP developed from Manufacture Ability Planning (MRP). The ERP was alien by an analytic close Garner. Action Ability Planning has all the functions of an action except organisation business or charter. Abounding organisations like IBM, Dell and HP Microsoft, Intel and abounding alternative organisations are now appliance ERP systems. The ERP systems are about for ample and added broadly based applications although it is additionally acclimated in baby and average sized businesses. The ERP systems accommodate standardization, lower aliment and it can abundance all abstracts in one database. So, we can say that it has greater advertisement capabilities. ERP includes alternative applications like Accomplishment Ability Planning (MRP), Financials Ability Administration (FRM), Chump Accord Administration (CRM), Accumulation Alternation Administration (SCM) and Animal Assets Administration (HRM). (Leon , 2008)

Figure : Advice affiliation through ERP (ERP, 2010)

1.3 Overview of ERP

Many organisations acquire to apparatus one allotment for ERP systems and stand-alone systems for the alternative ERP applications charge to advance an alien interface to the alternative ERP system. Because in an organisation one bell-ringer acquire to use animal ability administration arrangement and the banking arrangement acquire addition and affiliation amid those systems. It is absolute accepted in midsized banker and the retail breadth will acquire a point of auction (POS) and banking appliance again they acquire a specialized appliance to handle alternative business requirements like acumen and merchandising. (Leon , 2008)

The affection of ERP arrangement is that it provides a distinct database which contains all the abstracts for the software bore additionally apparent in bulk 3:


Supply Alternation Management 



Human Resources

Customer Accord Administration  (Leon , 2008)

Figure ERP Database (google, 2010)

1.4 Affidavit for Affairs ERP Software

In these canicule back the business ambiance is added circuitous and awful aggressive again the organisations charge the IT arrangement which is awful aggressive with time management. The organisations charge the outstanding achievement in their business by utilizing the time in the absolute way. Action arrangement advance the aggregation time correctly. Action Ability Planning is the planning in which the business assets like material, advisers and barter confused from one accompaniment to addition state. An ERP arrangement maintains the abstracts which connects with the business functions like manufacturing, accumulation chain, Management, finance, animal resource, chump accord management. (Leon , 2008)

1.5 Affidavit of ERP projects Failure

Sometimes ERP projects abort if you do not apparatus them well. There are some of the affidavit for the abortion of ERP failure.

The aggregation alleged the amiss software of ERP for the company. The training of agent is additionally absolute important and some organisations don’t alternation able-bodied their employees. Some software is heavily customized and if these are not bout with the company’s IT basement again there can be problem. If we do not apparatus the able change administration strategies again it can be the aftereffect of abortion of the project. If the business alliance leaves out the assignment in the action again it can be additionally a big loss.(Glenn, 2008)

There are additionally some factors from breadth we can accomplish the acknowledged ERP projects by selecting the appropriate software for the company. Give the appropriate training to employees. For implementing the ERP we acquire to administer anniversary access and advance the best practices for implementing ERP software. (Starinsky, 2001)

I begin some important realities about ERP are that there is no absolute ERP arrangement exists. We cannot say that any ERP accomplishing is anytime perfect. If two companies acquire the aforementioned ERP software but the accomplishing cannot be the aforementioned because every aggregation has its own appearance of implementation. (Leon , 2008)


Supply Alternation Administration is a arrangement that is circuitous buying, making, moving, affairs and distribution. (Hugos, 2006)

“A accumulation alternation is a arrangement of accessories and administration options that performs the functions of accretion of materials, transformation of abstracts into average and accomplished articles and the administration of these accomplished articles to customers”. (Hugos, 2006)













Figure Accumulation Alternation (Supplychain, 2010)

2 Nike’s Accumulation Chain

Nike’s accumulation alternation affair is centralization. All articles designs, authoritative and commitment is centralized from Beaverton, Oregon in the US. Nike operations were disconnected into bristles regions USA, Middle East, Africa, Asia and America which included Canada, Mexico and Latin and American countries. In 1975, Nike launched one affairs which is accustomed as approaching affairs for managing its cossack products. In this affairs Nike’s retailers placed their orders afore six months. Again these orders confused accomplishment units about the globe. The accumulation alternation formed accurately at that time. Nike Aggregation became overextension added and added globally. Nike acquainted that its accumulation alternation bare accelerated changes. The accomplishment action additionally became absolute circuitous because some models like Air Jordan Sneakers appropriate 130 accomplish to manufacturing. In 1998 Nike’s accumulation abandoned bottomward by 50% additionally apparent in bulk 5. Nike mentioned that they had problems with the absolute accumulation alternation systems. To affected this botheration Nike launched one activity accustomed as NSC (Nike Accumulation Chain) project. (Koch, 2004)

Figure : Accumulation abandoned bottomward by 50% (investment, 2010)

This was a massive activity in which the all-around operations were operated absorption to apparatus ERP, accumulation alternation and chump accord administration on a distinct SAP arrangement as apparent in Table 1. Abounding changes were fabricated assorted times to fix the accumulation alternation and these changes created austere problems and in the aftereffect Nike had to move a accomplished new system. (Royal, 2001)











Human Capital Administration (HR Systems)


Product Abstracts Management, Artefact Life Aeon management

See Beyond

Application Integration

Marc Globe

Warehouse Administration Systems


Unix Serves Supporting all accumulation alternation systems


Systems integrators & alternative able services

2.1 i2’s Software Implementation

2.1.1 Background

Nike’s accumulation alternation affair is centralization. All articles designs, authoritative and commitment is centralized from Beaverton, Ore. The botheration was that the accumulation alternation was congenital for six month’s aeon which is additionally alleged approaching program. This approaching affairs was developed in 1975. At that time Nike fabricated its bazaar amplitude because bodies at that time did not abundant affliction about the appearance or looks. Their absorption was that they charge technically avant-garde shoes which were abiding and fit. (Koah, 2004)

2.1.2 Charge the i2 software for bigger accumulation chain

Nike got the all-around appeal and its accumulation alternation burst bottomward because of the aerial appeal from all over the globe. By 1998, Nike had 27 adjustment administration systems all over the apple which were ailing affiliated with Beaverton. Addition botheration with these systems was that these were awful customized. At that point Nike bare the ERP arrangement which can handle the accomplishment aeon for up to six months. Nike additionally absitively that the bare the systems which were centralized. For that acumen the ERP software like SAP’s R/3 software were bigger for the Nike’s accumulation alternation strategy. The software was included with i2 supply, appeal and accord artist software applications. In the alpha of 1999 Nike absitively to apparatus i2 software. I2 software accomplishing was the aboriginal allotment of NSC project. The bulk of this activity was US $40 million. (Koch, 2004)

Table i2 SCM Proposed Benefits (Industrial Accumulation Alternation administration Band-aid -i2-Planning, 2010)








Maximize advantage by optimally allocating resources

Unclear parameters


Long appellation profitability

Demand management

Anticipate and access demand

Accurate appeal admiration is difficult

Demand planning, access collaboration

Improved chump service

Supply planning

Determine what to accomplish and back and how to profitably administer supply

Size and complication of problem

Collaboration, optimization,


Global afterimage and allocation , fast acknowledgment to changes


Determine what to aftermath and when

Managing absolute & accommodation tradeoffs is complex

Fast bound absolute & accommodation planning & scheduling

Reduced inventory,

Improved due date performance

2.1.3 Affidavit of i2 software failure

There were abounding affidavit for i2 failure. Nike did not appearance backbone during the accomplishing of the aboriginal allotment of its NSC (Nike Accumulation Chain) project. Nike absitively to install its i2 software while Nike was appliance its bequest systems. The bequest systems were awful customized. The i2 software additionally bare to be awful customized because they acquire to be operated by Nike’s Bequest systems. Even one access took too abundant time to be recorded by the i2 software. This botheration was the abrupt setback. The capital accountability was that the arrangement abandoned some orders and fabricated alike the alternative orders. The ordered abstracts was additionally deleted afterwards six to eight weeks back it was entered. It was absurd for the aggregation to anamnesis the adjustment had asked to produce. The complications of NSC activity are additionally one of the affidavit of the failure. The i2 software bootless in appeal anticipation as apparent in the bulk 6. In some places Nike has balance account and in curtailment of account in alternative places. Because of i2 software abortion Nike’s accumulation abandoned bottomward by 50% from USD $798 actor to US $399 million. (Koah, 2004)

Figure i2 software abortion (Koah, 2004)


Nike had absitively to apparatus the SAP Accoutrement and cossack solution. AFS is a allotment of SAP ERP project. This software is based on SAP r/3 and abnormally for cossack industry. Nike chose to apparatus alternative SAP applications like SCM and (B/W) Business advice warehouse. Nike is additionally because the SAP Net weaver belvedere in abreast future. Bulk 7 shows the sample anatomy of SAP Net Weaver Implementation. (Koah, 2004)

Figure SAP Net Weaver Accomplishing (Koah, 2004)

Nike did not apparatus the aboriginal adaptation of AFS although Nike had purchased SAP AFS in 1998. This new adaptation of SAP AFS was the abject of NSC Project. The SAP bore implementations at Nikes were Banking & Ascendancy (FICO), Sales & Administration (SD), Absolute Administration (MM) and Production Planning (PP). These interfaced absolutely with Nike’s i2 demand-planning and Siebel CRM software. (Koah, 2004)

2.2.1 Action for implementing ERP system

Nike adopted the “Big Bang” access for implementing ERP software by installing all SAP apparatus like planning adjustment access financials etc. all at once. This assignment had a aerial bulk of affiliation amid its cossack and accoutrement sectors. Because of SAP (AFS) the aggregation took abounding ascendancy on both breadth cossack and accoutrement of accumulation alternation from raw absolute until delivery. (Sussman, May 2004)

In 2000, Nike Canada became a aggregation which implemented SAP (AFS) forth i2 applications and Siebel CRM. The software was acclimated assorted HP action servers because on HP-UC (1) 11 operating environment. HP was called because it had acquaintance in SAP and i2 applications. (Sussman, May 2004)

2.2.2 Benefits

NSC Activity accustomed the aggregation to accomplish build-to-order accumulation chain. Afore implementing NSC activity Nike purchased articles from manufacturers about 9 to 10 months afore and on the alternative duke Nike’s retailer’s ordered for abandoned 6 months. The activity enabled Nike to abbreviate the time for cossack articles from nine to six months because of implementing this NSC project. Now Nike can buy from accomplice factories on the abject of absolute requirements rather than anticipation alone. Addition account of this activity was that it had anon benefited on the banking management. This activity gave bigger affiliation amid departments. (Barrett, 2003)

According to Shelley Dewey, Carnality president, Nike Accumulation Checain, “The alteration of business aggregation associates into IT adeptness individuals and IT aggregation associates into business action experts was an abrupt benefit of the activity effort. We are a abundant stronger aggregation for accepting done this work.” (Clark, July 2004)


During backward 1990 best companies abhorred to apparatus ERP systems because of the huge bulk and the activity was time consume. But Nike has invested on ERP arrangement and they accepted that although they paid a huge bulk for implementing ERP arrangement but it account a lot. We can additionally beam the circuitous of implementing ERP arrangement from that if it was accessible to apparatus ERP arrangement again everybody did it at that time. Nike has implemented the NSC (Nike Accumulation Alternation Project). But for this success Nike has paid a huge bulk and time.

Although the aggregation has implemented SAP arrangement but there was still botheration that it did not acquire absolute point of auction (POS) abstracts in affiliation with retailer’s data. The forecasting action is additionally beneath authentic because aggregation knew abandoned about the retailers affairs and not acquire any advice that what the chump buying. Nike has invested a lot on this activity and now Nike has to accomplish this arrangement absolute because baby bugs became a huge botheration to fix.

In the alpha of ERP accomplishing Nike had faced difficulties but now Nike has those approaches that abounding companies to chase that approach. But Nike has to acquainted consistently about the botheration in ERP sectors and additionally makes changes its action in the approaching with bazaar environment.

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