Reuse- A -Shoe

Nike currently has the fund raising project in affect in their retail stores entitled, “Sole In, Peace Out” where they practice their reuse-a-shoe effort. This is a project where old used tennis shoes of any brand are donated to the company and recycled in an effort to build basketball and tennis courts, running tracks, soccer fields, fitness flooring and playground safety surfacing around the world. This task is performed by collecting shoes through recycling programs, other Nike stores and shoes that have been returned due to material defects or even donated shoes from customers. These shoes are collection at various Reuse-A-Shoe drop off centers or even just by visiting retail stores, you can also ship the shoes to any other the processing centers in Oregon. At the processing centers the old shoes are processed into three types of raw material which are rubber from the outsole, foam from the mid sole and fabric fibers from the upper. Through the partnership with companies such as Atlas Track&Tennis, Training Ground which provides rubber flooring, Rebound Ice which provides cushioned hard surfacing for basketball and tennis courts and Playtop which is associated with children’s safety surfaces the scrap materials and materials from the worn shoes are grinded and reused to become part of facilities around the globe or even part of new Nike shoes/apparel. There are not any recommendations that could be suggested for this project because Nike allows participation from the consumer as well as outside industries and other retailers as well in an effort to gain 100% participation in creating a “greener” society.

Gantt charts are used by Nike Co. in instances where they are launching store openings and want to estimate project release dates. The use of these charts help to give estimates of how long it will take to open new sites for stores as well as create a budget for these projects.

Taken from http://www.nikebiz.com/responsibility/community_programs/reuse_a_shoe.html

Supply Chain Mgmt

The supply chain for Nike starts out with the suppliers who sell nike the rubber, die, and materials used to make products. The factories then transform those raw materials into products. Then the factories ship the items to wholesalers who then sell them to the retail stores across the world. The retail stores ultimately sell nike products to the everyday customers.

When it comes to delivery Nike does a good job of keeping positive fill rates with on time delivery. Their quality is storng becuase they are able to meet customers specifications and customers have stayed loyal to the brand for a long time. Flexibily is another positvie Nike has because they are able to meet customer demand changes in production. Lastly, Nike is effective in time because they are able to complete the entire supply chain procees in an orderly and timely fashion to continue to meet demands.

Supply chain management defined as the design and management of seamless, value-added processes across organizational boundaries to meet the real needs of the end customer. Nike currently has the typical supply chain managements in effect which consists of distribution from suppliers to factories which then connects to warehouses, lastly to retailers which help to reach the customers. To enhance their customer service Nike retailers should offer charge sends for customers who would like to purchase items from stores that are not be available online, from the comfort of their home. This would help to boost the customer experience scores because as they are increasing the amount of units in which they are selling , they are able to engage in an experience with the customer that would be satisfactory and ultimately memorable as well.

Quality Control

The Nike Company currently uses flow charts to depict step by step processes when mapping out ideas for events such as new product launch or holiday transitions, run (trend charts) to show what items are selling more/better in a particular area and cause and effect(fishbone diagrams) to show the outcome of the selected reports or ideas. Continuous improvement is used in the company so that it can continue to grow and prosper. Through the use of opinions in which customers lend during customer service surveys as well as their store visits help to keep the company aware of how to become the best in the retail clothing market. Supplier certification as well as inspection at the time the goods are finished is also used for inspection to ensure quality service. Nike also implements the Six Sigma Practices in their routine when assessing the customer service aspect of the company. Through the use of customer surveys and feedback from customers, the company is able to work on the weak areas that can become beneficial.

Managing Quality

Availability

The Nike products are available both within retail stores as well as online. Customers are also able to customize equipment and footwear according to their color or style specifications and the products are able to be shipped to the customer according to their preference of delivery and arrival time.

Quality of Design

Nike provides top- of- the line clothing and footwear which are comfortable and reliable for the everyday commuter as well as energetic athlete. Whether producing a basketball or running shoe, they strive to meet the expectations of customers and continue to give 100% in doing so. Nike provides inexpensive sporty, efficient products that are stylish and easy to maintain and keep up. In the field of service area, Nike practices a 30- day policy for online as well as in store unwashed, unworn items to be returned or exchanged to meet the customers’ requirements. They also train their employees so that quick and courteous customer service can be guaranteed or given in a satisfactory manner. Nike also asks for customer feedback on purchases in store and online as well, but only in-store, offering the customer a chance to voice their opinions and simultaneously earn discounts. This helps them to stay aware of what customers expect when being serviced (quality of conformance).

Nike currently has the quality service of conformance in place, aiming to continue to market and produce products that are reliable to the customer when they desire. This also helps build the NIKE brand name.

Service Process Design

Nike’s 3 elements of the service-product bundle.

Tangible (Explicit Service)- Nike provides the customers with a variety of sporting goods and apparel, which can be worn causally or used athletically. The clothes are produced in a wide variety of factories and sold by retailers all over the world.

Psychological (Implicit Service)- The look and feel of Nike’s products. The style type and design that the name brand gives. The personal mindset Nike gives to the customer knowing that they have a high quality product.

Physical (Facilitating Goods)- The actual clothing or equipment worn or used after purchasing the items. The shirts, shoes, hats, sporting goods, pants, and all other accessories Nike produces.

The cell Nike operates in on the service matrix.

Nike would be located right in between Provider- Routed and a Co-Routed company on the service matrix because they operate in the mass production of apparel, but they lean closer to a Co-Routed company because it has many styles to offer including shoes with a customization feature available. Nike also produces all types of sports apparel, golf clubs, t-shirts, hats, and more. Nike focuses on one industry, but provides a flexible direction for all types of customers.

Some types of customer contact Nike encounters and how they respond to it.

Nike is definitely a Low-Contact company because face-to-face interaction is not required. Nike has efficient processing and fairly standardized products. Some problems Nike may encounter would involve inventory and demand levels. They then must re-evaluate the demand of a particular product, and change processes based on the new demands of their customers as a whole. They must also keep a variety of up to date quality products to keep customers coming back.

Does Nike use self-service?

Nike uses self-service though the process of shopping and ordering online. It also provides a way for customers to design and create their own version of a specific pair of shoes. These examples show self-service being used by Nike, but besides these two services the majority of Nike’s business is not self-service.

In the Nike retail store technology is very much so an innovative tool. A computer generated inventory control system is used to find various sizes of merchandise on stock so that the sales associate is able to assist customers quicker. This is so because the shipment boxes of merchandise are scanned before processing, into the system with a bar code reader after being unloaded from trucks.

Nike also uses focus operations to drive sells within the retail store as well as online. Within retail stores there are sometimes additional percentage discounts on certain active wear or footwear to persuade the customer to buy more. Customer service scores are also boosted along with sales when sales associates hand out mesh bags for the customers to store their potential buys while browsing in the store. This is so because the customer then feels acknowledged and it also gives them the ability to pick up more. Special shipping discounts and promotions are also offered online for the customer’s convenience when the customer spends a particular amount or buys a certain item.

The Nike Company supports their employees through their internal service quality. Due to the fact that they value and appreciate their hardworking and productive employees, their company continues to be one of satisfaction and positivity. Through the refreshing and warm work place environment provided, a furnished lounge with many activities to keep employees' breaks well spent, and also comfortable uniforms which are universal for both men and women, Nike keeps the employee satisfied. Nike provided monetary bonuses and awards for the performance job recognition of employees. This helps employees to stay satisfied with their jobs in addition to the company discount that they receive and are able to share with family as well as the employee exclusive stores.

Nike offers the return service policy of 30 day refund or exchange with receipt of unwashed, unworn merchandise if the event that the customer is not satisfied. Items purchased online are also able to be returned online or within store when accompanied by the online transaction receipt. In the event the customer does not possess a receipt and would like to return/exchange an item purchased at a Nike retail store, they can be issued a store credit for the purchase price of the item. Customers can also receive price adjustments within 14 days of receipt date on items purchased if it happens to go on sale when presenting a receipt of purchase at a retail location.

Process Selection

What type of product flow do they use?

Nike uses an assembly line flow. “An assembly line flow is characterized by a linear sequence of operations. The product moves from one step to the next in a sequential matter from beginning to end.” (pg. 57 Operations Management) They also use a project flow for a small portion of the business. On Nike.com you can customize your own shoe, from the shoes provided to you on the website. A project flow is used for unique or creative products. Each unit is made individually and is different than any other unit. So for Nike when and order comes in from the customer, each shoe is going to be made different from others, whether it be the color or style of the shoe.

What type of customer order do they process?

Nike uses a “Make to Stock” customer order which provides a fast service to customers from available stock. Make to stock has a standardized product from the producer, not specified by the customer. “Everything is keyed to producing inventory in advance of actual demand in order to have proper products in stock, for when the customers call (pg. 60 Operations Management).” In the make to stock customer order process, products are not always readily available. Customers can put orders through but the products can be on back order and they will have to wait until more of the product is produced. They alse use "Make to Order" because there are customers who customize their own shoes online and then Nike has to make the orders as they come in, they will not have them in stock

Which cell do they fall into in the process characteristics matrix?

Nike falls into the continuos and assembly line cell. This cell consists of order type, flow of product, product variety, market type, and volume. Nike has a large batch, a sequenced flow of product, a high product variety, a mass market type, and a high volume.

What are some of the factors influencing their process selection?

The factors that influence their process selection are the fact that they have a high volume and standardized product. They have to produce a lot of shoes and the shoes are made by the producers not the consumers, so they are not made to order they are mostly always in stock.

Can they adopt any of the mass customization methods discussed?

Nike has already adopted the mass customization medthos dicussed. On Nike.com you can customize the shoes they provide you to make alterations to, whether it be color or the design on the shoe.

www.NikeBiz.com

Inventory

Inventory is one of the most important operations management responsibilities of any company because it affects the delivery of goods to customers, which controls the amount of product a developed business makes. Nike Inc., a company that focuses on the distribution and sales of finished goods, operates in the areas of footwear, apparel and sporting equipment. Operating in various countries as well as states, the Nike Company has many retail locations which house their store’s stock supply of merchandise on their grounds, keeping replenishment of materials to meet demands. The various supply of inventory includes merchandise in different sizes and colors to satisfy customer preference during regular shopping occasions as well as times where there are holiday rushes for the “last minute” and/or “perfect gift”. The various points of inventory structure, item cost, ordering cost, holding cost as well as stock out costs are determined by corporate offices after the reviewing of the store’s ability to meet annual profit goals as well as the store’s regional geographic. These headquarters also view records which show statistics of items which are more popular in sales, this helps to determine the amount of a certain products to order to create a shipment schedule for each store.

In this retail market the demand is independent because it is influenced by market conditions outside of the control of operations. In this operation various materials of shoes, clothing, and sporting equipment is replenished before it runs out. This helps the company from a customer service aspect as well because they are able to deliver a product in a timely fashion to each shopper.

Company Profile

NIKE is a leading sports, and apparel production company. It is also the worlds #1 leading shoe maker designing shoes for all sports ranging from football to golf. Nike is a global company, which sells products in over 180 countries with the United States being its top consumer. NIKE is lead by CEO Mark Parker who became company president in 2006. Chairman Phillip Knight and VP/CFO Donald Blair also help operate NIKE on a major level. One of NIKE's most recent company moves was the purchase of Umbro in 2008 which is hoped to increase revenue in the near future.