Nike Rebounds Case Study

4387 Words 18 Pages
Register to read the introduction… Nike's June 2000 problems with its i2 system reflect the double whammy typical of high-profile enterprise computing failures. First, there's a software problem closely tied to a core business process - in this case, factory orders. Then the glitch sends a ripple through product delivery that grows into a wave crashing on the balance sheet. The wave is big enough that the company must reveal the losses at a quarterly conference call with analysts or risk the wrath of the
US Securities and Exchange Commission, shareholders or both. And that's when it hits the pages of The Wall Street
Journal, inspiring articles and white papers on the general subject of IT's hubris, limitations, value and cost.
The idea that something so mundane as a computer glitch could affect the performance of a huge company is still so novel that it makes headlines. But what doesn't usually enter the analysis is whether the problem was tactical (and fixable) or strategic (meaning the company should never have bought the software in the first place and most likely won't ever get any value from it). The latter is a goof worthy of a poster; the former is a speed
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In those days, the Far East sneaker supply chain was in its infancy, deliveries were spotty, inflation was high, and runners bought whatever shoes they could find regardless of brand. Nike won that market by guaranteeing delivery and an inflation-proof discount in return for getting its orders six months in advance. Retailers went along happily because runners didn't much care about style or looks - they wanted technically advanced shoes that fitted and were in steady supply. Retailers knew their Nike shoes would sell no matter how far in advance they ordered them.
But as Nike became increasingly global, its supply chain began to fragment. By 1998, Nike had 27 order management systems around the globe, all highly customized and poorly linked to Beaverton. To gain control over its nine-month manufacturing cycle, Nike decided that it needed systems as centralized as its planning processes. ERP software, specifically SAP's R/3 software, would be the bedrock of Nike's strategy, with i2 supply, demand and collaboration planner software applications and Siebel's CRM software also knitted into the overall system using middleware from
STC (now

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