Nike Inc

Nike is one of the major manufacturers of apparel products and it leads in the foot-wear, athletic apparels and accessories. The brand has had a widespread print and television advertising with the marketing strategy including sponsoring various high-profile athletes. In the past the manufacturing operations of the firm especially for sportswear products have come under scrutiny due to allegations of sweatshops utilizations. The firm has responded to the negative publicity by establishing suppliers’ code of conduct, various partnerships and even the use of lean manufacturing. The intention has been to improve the image of the company and its operations in the market (Nike, Inc, 2015).

Six-sigma Innovation

The six-sigma is at times criticized as being against introduction of innovation but it should be that way. Creativity in thinking and innovation are major required at the Lean Six Sigma’s improvement stage, where the root cause of a problem has been identified and there is a need to find solutions for the problem (Pyzdek & Keller, 2014). The use of Lean principles in Nike’s manufacturing operations has been aimed at waste and time reduction and thereby improves production and lead times. The integration of Six sigma and Lean has been the basis of innovation in the company as way of producing high quality products at low prices that will compete in the market. The use of lean technique also results to reduction of waste in the production process while improving the customer value. A lean firm is one that comprehends customer value and directs its major process towards its continuous improvement (Pyzdek & Keller, 2014).  Such thinking will win over more customers; ensure stability in the performance of the firm through standardization of quality while serving customers. The integration of lean technique and Six-Sigma leads to Lean Six Sigma which gives room for innovation through quality management , improved processes and application of resources in a way that productivity will dramatically be increased and creation of  more business potential.  Innovation should be sustainable enough to enable a firm learn and adapt to a constantly changing environment. Sustainable innovation involves continuous efforts to have the firm remain at par with a dynamic business environment (Jeston & Nelis, 2014).

Sustainable innovation has taken various forms in Nike Inc which has enabled it to improve the manufacturing process. The transformation has involved ensuring that the manufacturing ecosystem and sourcing of materials will continue to provide sustainable growth for the whole value chain. The definition stage has involved presenting the firms as one that is driven by innovation in what is manufactured, how it is manufactured and how it delivered to the market. The firm’s innovations are the driver of efficiency perspective, how the operations can grow the business, reduce environmental impact and connect with the customer (Distelhorst,  Hainmueller,  & Locke, 2014). This is the problem that the firm tries to address across its operations. The measurement in the firm involves the impact of improved working conditions, manufacturing process and the supply chain value with an aim of achieving the set targets and goals. The improvement of working conditions has involved supporting career growth, wellbeing and health, safety and offering competitive compensation and benefits. The aim is to bring the best out of its human resources through workforce engagement on the basis of supporting diversity, value creativity and continuous learning. Obtaining the best of human resources can be obtained through employee engagement, which enables them to strive for best performance in a competitive industry and challenging environment (Bocken et al. 2013). Through partnership with Fair Labor Association the firm has been able to come up with its Sustainable Compliance Initiative. The initiative has aims at providing tools for improving process and meets the industry standards.

The use of lean manufacturing has been aimed at enabling the firm to analyze, design, verify and control the production of its various apparel products. This can evidenced by the adoption of the Sustainable Manufacturing and Sourcing Index , which is a system used in combining the  ratings of factory in terms of lean manufacturing and environmental safety. This has enabled the company to move beyond just waste reduction and include how the production processes are operated. The system has enabled the firm’s human resource to measure performance against business metrics in the sourcing of materials, reduction of non-compliance practices in the manufacturing process (Nike, Inc, 2015).  Presently firms are progressing in terms of meeting compliance with the standards set by their rivals in the industry. Various firms are striving to meet the standards set by Nike Inc in the manufacturing process and supply chains.

Product design

The approach by the firm has been involved bringing various skills sets and teams in the development process who works together in finding innovative product solutions that will help in reducing social and environmental impacts while at the same time adding value to the firm’s business. This provides integration in thinking and moving teams beyond personal expertise so as to achieve great sustainability. For instance, design teams are placed along the production team which enables them to take advantage of any breakthrough in innovation (Nike, Inc, 2015).

Measuring the impact of products

Since the materials used in manufactures of apparel products has great environmental impact , the use sustainability scoring tools provides information to employees on the best materials that should be used and process that should be adopted. This helps in enhancing the score of its products and hence waste reduction through pattern improvement is achieved (Nike, Inc, 2015).

Improving decision making

The decision making process is an important step in the adoption of innovative processes (Polk, 2011). The decision on what to be made is informed by the need for quality products which is achieved through assessing the products’ environmental profile. This leads to better decision making in the entire development process. The decision on materials to be used is improved through the use of MSI in comparing vendors and materials to be used. The decision on how the product will be made is improved through contracting factories whose sustainability has been measured against conventional metrics of costs, delivery time and quality (Nike, Inc, 2015).

Controlling environmental impact

The use of EPMS (environmentally preferred materials) is increased so that polyester, cotton and leather materials are frequently used so as to minimize the product’s environmental impact. This is also achieved through the use of better chemistry, reduction in resource consumption and waste and improving the recyclability of such materials and used products. The use of Nike MSI helps in tracking average scores in assessing whether the materials used in product creation have a minimized footprint on the environment (Nike, Inc, 2015).

Materials innovation

The firm is focusing on leveraging a pipeline for robust material innovation so as to come up with better solutions. This also involves making progress in the development and sourcing more options for sustainable materials (Nike, Inc, 2015).

Flexibility

 The use if lean technique in Nike Inc has also ensured the flexibility is obtained in the manufacturing process and supply chain. Flexibility is a major strategic intent that provides strengths for a firm to achieve sustainability and a constantly changing and competitive environment (de Albuquerque & Christ, 2014). Fierce competition from major rivals such as Adidas has only served to push Nike Inc in working hard so as to maintain an edge in the market. Flexibility for Nike rests largely in its supply chain that can be considered fast, agile and lean and with great focus on customer and sustainability. The flexibility in the firm is achieved through the use of data and technology the drives better responsiveness and demand sensing. The distribution centers and suppliers assist in serving different customers whenever the products are need, whether they are many customers or just one individual(Nike, Inc, 2015).

The firm is able to move around 1.1 billion products – apparel, equipments and foot ware - across various regions enabled by different channels (Nike, Inc, 2015). The use of consumer means involves more digital and wholesale volumes with less weight. The supply chain enables the firm to leverage direct shipping of loads into retail stores and at the same time to partners. The lean technique implementation at the work place involves contracting workers to different agencies which allows for easier supervision, while multiple agencies are given the mandate to ensure efficiency in terms of capital and time is achieved. This increases the capability of the firm to increase production across the manufacturing process while not compromising the required standards. The improved processes also enable the firm to be flexible in hiring sub contractors, selection of vendors and distributors from many options (Nike, Inc, 2015).

Innovativeness

Innovativeness of a firm involves its ability to come up with new ideas, provide better solutions and new products that will effectively serve the changing needs and customer’s preferences (Pesonen & Horn, 2014). In a highly competitive market environment, business innovativeness helps in separating setting it apart from the rest in terms of product offered, strong brand and in building a strong customer network (Spieth & Schneider, 2016). Nike innovativeness can be observed from the new designs especially in 2016 which emphasize the commitment of the firm to improving customer service through furthering their human potential. As per the firm’s mission, innovation is never about the future it involves acceleration towards it (Nike, Inc, 2015). The firm is able to anticipate its customers’ needs through the experience and knowledge they have about athletes. The firm is then able to offer innovative products before its rivals can notice the need. The company’s Hyper Adapt 1.0, a product which is the first for product in innovative adaptive platform, has buttons on the sides which allowing loosening and tightening the laces (Nike, Inc, 2015).  This product is able to challenge the conventional description of fit and its design allows for reduction of athlete distraction. The product was produced under the belief that adaptive lacing potential is big and such innovation is a great step towards customized footwear that is adaptive. The success of launching such innovative products has the potential to increase the market share of the firm. As footwear provides the largest amount of revenue for the firm, Nike’s innovativeness is able to offer a competitive advantage in a market that has many substitute products. Innovativeness provides a firm with an opportunity to remain ahead in a market changing consumer needs (Joe et. al 2014).

Re-engineering

Re-engineering in business process refers to the evaluation and redesigning of workflows and processes in an organization so as to make it more responsive, efficient and flexible so as to achieve the set goals for all stakeholders (de Albuquerque & Christ, 2014). The re-engineering in Nike Inc is based on new commitments and targets, which include a commitment throughout the firm to integrate sustainability into innovation process, portfolios and governance. The re-engineering process involves two aspects: continuously improving targets against major impact areas so as to ensure today is better; a wider commitments for innovation so that the future design establishes Nike’s approach to change in the long-run.

Business re-engineering starts from change in management focus where the customer and not manager is the boss. The management has to ensure that employees who are involved in every process are empowered to make decision and own the whole process (Bask et. al 2016). The management of Nike Inc embraced the change by engaging external viewers who are expert in broad areas including representatives of NGOS, business and academia to evaluate the reporting of the firm and discuss on how sustainability targets can be achieved (Nike, Inc, 2015).The management was able to find a team that can be involved in imagining, inventing and designing the future processes for sustainability purpose. Recently the firm has been able to fin-tune its focus to what is most important. By involving the efforts of its workforce in introducing change, the aim of the firm is to unleash overall human potential through creation of opportunities for employees to foster. The firm involved the assistance of experts such as Richard Locke, a professor at Massachusetts Institute of Technology, who had done broad research on labor improvement and enhancement of environmental conditions across the supply chains around the globe (Nike, Inc, 2015). Such reviewers were instrumental in ensuring the processes in the firm’s operations were rigorous, transparent and well-organized. The firm was able to change its focus from activities management to results focus. In re-engineering process, an organization has to change its orientation to a cross-functional or process orientation from functional view. This enables a greater level of flexibility and organizational knowledge in achieving the new targets.

 The role of employees in the re-engineering process cannot be overstated, give that any change introduced is carried out by them. An organization has to involve the workforce in the process so as the new targets are achieved. Nike Inc embarked on embracing a leadership mindset and employee engagement based on the understanding that when employees are valued, issues concerning workplace conditions, compensation and overtime will basically be shifted. For instance, in Indonesian factories, Nike researching on how worker engagement and leadership mindset faired where various approaches to kind of communication skills factory workers and management need and how team performance can be recognized and motivated (Nike, Inc, 2015). The firm has engaged with various factories so as to ensure workers are better engaged and hence, improving the feeling that they are valued. This has been pegged on improving communication process between management and workers, so that workers can offer suggestion, enhance insights and ensure their skills are developed (Nike, Inc, 2015). This is the only way the firm would ensure that its new commitments and targets in the re-engineering process are embraced and emphasized across the firm.

Brainstorming

Brainstorming refers to a technique where a group of individuals spontaneously and freely share their ideas and then build on each other’s intuitions and visions until they emerge with something unique. The premise for this principle is that problems in an organization can be solved best when individuals generate many ideas, present and subject them to consideration and judgment under some given constrains (Wang Wang & Zhao, 2015). However, this depends on various factors including the people involved and environment in which the presentation is being done. Whereas some ideas may be borne out of brainstorming, it does not always work and hence, some people can be more creative when alone and away from crowd (Low, 2015). However, Nike has been able to reap big from brainstorming, which brings engineers, programmers and designers. These are professional innovators tasked with continuously looking into problems and drawing athletes and customers into a process of finding for solutions. This enables the firm to open improved ways of innovating, even where there is increased cost of doing so. Through brainstorming, the firm has been able to move away from the conventional way of making shoes – cutting apart different materials and sewing them back together – into knitting shoes together, stitch after stitch. The use of different ideas from various professionals has enabled the firm to use technology in fine tuning the performance and engineering of a given shoe. 

Brainstorming has to be subjected to the set mission or focus as its constraint so that any ideas presented are within the set goals of the firm (Bask et. al 2016). Nike has been helped by its mission that has extreme clarity, which involves merging beauty and performance in all its apparel and athletic products. By following the mission, Nike cannot branch out far but instead build partnership with other firms whose strengths it can leverage. Such partnership includes Nike+ and Nike Fuel-band which enables Nike to utilize emerging sensor technology that it could not have afforded create on its own.  The idea of brainstorming involves negative and critical thinking being given a platform where they can be assessed a reviewed in terms of practicability and effectiveness. Great innovation can be borne out of this process which can be used in the production of superior products for an organization. An army of designers , data scientists and engineers for Nike Inc  including Parker and Hatfield have been involved in a 28 years long process of brainstorming and Research and Development to come up with a shoe that can electronically self- lace automatically , a technology the firm is calling adaptive fit. The designers and engineers had a clear intent of reinventing footwear that could be used for actual performance and this took many years (Nike, Inc, 2015). Though many ideas had been proposed to achieve this, the notion of a shoe that could basically come alive once the user puts it one was borne. Through shared ideas with Hatfield, Hacker was able to refine the idea of electronic shoe and the input by data scientists who analysed available information gave birth to this highly innovative product (Nike, Inc, 2015). Brainstorming is, therefore, an important technique which can lead to creativity, innovation and fresh ideas and contribute to success of efforts employed in an organization. While it can be viewed as discouraging personal creativity, a major advantage is that it requires a person to think critically about possible solutions for a given problem.

Focus

 Focus in business involves relentless attention to what drives it, creation of a culture that reflects what it stands for and remaining grounded as things are made to happen. This involves avoiding any situations that may cause distraction to the set vision of the firm and its most important component (Spieth & Schneider, 2016). The vision for Nike is engrained in its ambition of doubling the business bur with half reduction of the impact in the future. There is a need for the firm to remain focused on sustainability which is based on a design process that is creative, a business model that is driven by innovation and which propels them transform and rethink the overall industry. The firm has maintained sustainability as the catalyst for revolutionizing how business is done and at the same time integrating innovation across the entire business in terms of processes, policies and products. The firm has been able to remain focused through setting targets for improvement and reduction as the major foundation element in the mid-term strategy (Nike, Inc, 2015). To avoid various disruptions such as litigations due to employee and environmental issues, the firm has established internal policies focused on achievement of human potential and minimization of environmental footprint through sustainability.

 In addition, the firm has established a pipeline for products and services that are innovative but sustainable and which can help in unlocking competitive advantage. The firm also allows for pre-competitive space that can be utilized by the whole industry and hence, benefit from sharing of innovation, transparency and open-sourcing of insights, tools and data (Nike, Inc, 2015). Unhealthy competition can be a disruption to the firm’s vision of being customer and stakeholder focused and then ruins the chances to be continuously innovating. Therefore, in case of a competitive sustainable innovation, the firm focuses on establishing innovation partnerships and on increased investment in start-ups, new science and new technologies. In case of a pre-competitive sustainable innovation, Nike employs a different strategy that is scaled up. The strategy involves sharing, open-sourcing and assisting in creation of consensus and coalitions, driving the market changes and influencing public policy and even standards (Nike, Inc, 2015). Thesw activities ensure that the firm remains focused to improved products and service delivery and innovations that are sustainable.

Quality

Quality in an organization is determined by management, and it ensures that products and services offered are consistent and maintains the set standards.  Quality in the firm is ensured by the aim of the firm to set standards that are leading in the industry. The various process in the firm are performed ensures that quality is maintained. Operations management involves different areas; designing, capacity and process design, job design, supply chain and maintenance (Antony et al. 2016).  The quality in design is maintained through innovative athletic footwear and apparel products. In this case, objective is to have products that are design that is in line with organization’s focus on customers and achievement of the set goals. Sustainability is an important aspect in ensuring that products manufactured meet the set standards (Guimaraes, T., & Paranjape, 2017). The improved manufacturing process for the firm has been design in such a way that the enforcing of the set standards is possible. The manufacturing process ensures quality for not only the product but the impacts on the environment is greatly reduced. Hence, progress is only realized when quality is achieved through a lean, equitable and empowered working environment. Through this, high productivity and profitability are achieved though a sustainable business model. The designing and manufacturing of products is done after strategic decision on how customer expectations and satisfaction is made. The operation management of the company is able to address such a concern through maintenance of quality standards and even employment of Total Quality Management in manufacturing of apparel, shoes and equipment.

The use of technology by the firm is an important aspect in improving quality of products and services. The firm enters into partnership with other firms that have the latest technology and which it cannot create on its own so as to improve on its operations (Nike, Inc, 2015). Technology ensures that there is efficiency in production and capacity in the various processes is improved. To further improve on quality, Nikes operations have to streamline and ensure efficiency of the production process. The management of supply chain is one area that the firm has maintained high quality. The management of supply chain ensures that quality is maintained where all the contract factories are subject to a meticulous set of requirements that they should comply with. The contract factories are regularly audited while monitoring is done on a specific schedule whose base is performance. This is a clear indication of how quality management should be enhanced throughout the process. Quality is an important factor that ensures that the requirements customers are maintained and the set industry and regulatory standards are adhered to. It translates to the performance of a firm in terms of market share and income (Antony et al. 2016).

Mass customization

Mass customization refers to the process whereby products targeted to satisfy a certain market need are delivered in the entire market. If a customer want built-to-order products or custom made goods the firm need to get enough sales at competitive prices, mass customization provides a middle ground (Zhang wt al.2015). The mass customization involves the combination of unique nature of custom-made products with large quantities of production and sales related to mass production. Nike Inc provides a wide selection of apparels, shoes and equipments that are customizable targeting men and women. The products offered are for various sports or functions including training, football, track and tennis shoes. The customization is enabling by Nike’s strategy that involves giving customers an opportunity to design their desired products in relation to materials and color combination to be used and even the possibility to engrave personal details on products such as shoes (Nike, Inc, 2015).  Given the dynamic and complex nature of shoes, Nike Inc embarked on creation of a 3-tiered supply chain for these products. The assembling of such products involves a complex process and in some instances, they are hand-made in countries like China. While sifting to the e-commerce platform, the firm chose to provide three customization levels including Core Customized Shoe with 15-to-20 selections, customized product prices and the production of more standard products. The third one involved improvement on customers’ products with poor designing. The value chain with directly-to customer strategy has seen increased revenue for the firm and by cutting out the retailers enable the firm to avoid selling at wholesale prices (Nike, Inc, 2015). This has enabled the firm to remain ahead of major competitors.

References

 

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