Nike Inventory Management Case Study

My company is always searching for methods that will help companies become more efficient. Recently, I had the privilege of attending a Microsoft conference that introduced Nike’s Chairman, President and CEO, Mark Parker as the guest speaker. Apparently, due to, demand fluctuations and stiff competition, Nike now has an abundance of excess inventory. Upon hearing this startling revelation, I immediately thought about the Adapting Supply Chains to Tough Times, case study I read the other day. However, the problem that I discovered with Nike is that it has multiple locations, that all have different inventory needs. For instance, the Air Jordan X Retro “OVO” might sell well on the west coast, but not as well in the east. Therefore, my dilemma was to incorporate components of inventory management that would fit every location. Obviously, I had already begun

However, first I explained that by establishing an effective inventory management system, Nike would see an improvement within its supply chain and customer demand. First, I explained the replenishment method, and, I voiced my concerns about implementing this. While cost effective, the challenge with the replenishment model is that the product inventory can go from 15 to 0 within the span of a few minutes. Therefore, I could find no good reason to implement this element of an inventory management system. Thus, certain Nike products sell out within minutes of launching, therefore, the replenishment model would not be effective. However, Mark suggested that the joint replenishment component might work. Regrettably, I had to point out that one of the main requirements of this system is that external demand must be met. Consequently, it would not work because Nike would have a difficult time meeting the demands. Thus, Mark agreed and we continued to the next management systems (De Kok, & Inderfurth,