How Nike emerged from supply chain snarls with sustainability at its core

Sneaker giant Nike has been scratching the itch of hundreds of sneakerheads despite the unique challenges presented in front of the company in the last two years. In the past few years, Nike navigated the supply chain snarls, risen, and seized every opportunity to accelerate and transform its operations. 

As reported in March this year, Nike’s sales have shown accelerating numbers as the show giant yields benefits from its digital business. 

The company posted revenue of $10.9 billion for the quarter ended February 28, up 5% from the same period a year earlier. Analysts expected revenue of $10.6 billion. Profit of $1.4 billion, or 87 cents a share, was roughly flat a year earlier.

Nike first began its transformation journey in mid-2020, as consumers across all segments immediately shifted to digital engagement. With its eye set on serving consumers directly and delivering satisfaction, Nike transformed its supply chain to power long-term growth.

To do so, the sneaker giant took decisive action and began building a digital-first supply chain to power Nike’s more direct, faster, and precise service to consumers, all while prioritizing sustainability.

Let’s have a look at how Nike is changing the supply chain game.

Increasing capacity, speed and precision more sustainably

Nike is transforming its distribution centres into omnichannel facilities, employing a multi-node network including new regional service centres across nations to serve the consumer better. Further, the company is equipping all its facilities with advanced demand-sensing and inventory optimization technology platforms that are increasingly helping Nike predict, plan and shape one-to-one consumer demand.

Adapting automation and technology to transform operations

The challenges and constraints imposed by the pandemic have driven Nike’s team to transform how it serves consumers through the implementation of new technology platforms, automation, and process improvement in its operations.

Leveraging AI and machine learning, Nike forward-position the products that consumers love most and deliver faster, more precisely, and without compromising sustainability. 

Checking consumer’s list of getting what they want, where they want, and when they want it, Nike is also giving services such as ‘Buy Online, Pick Up in Store’ (BOPIS), Ship to Store, the No-Rush Shipping option for consumers prioritizing sustainability, and Direct Order Drop. 

It is also leveraging Cobots in several of its distribution centres to aid its team in the sorting, packing, and movement of products. These measure by Nike has helped the brand increase speed in order processing, alleviate physical challenges, and allowed the brand to concentrate on higher-value activities.

A sustainable approach to benefit consumers and the planet

Taking the sustainable approach, Nike has reduced the number of split packages and is leveraging pop-up cartons that are made of 65% recycled content and 35% virgin material. 

Nike Refurbished initiative extends the life of eligible products by taking gently worked and slightly imperfect kicks and refurbishing them by hand to offer at select Nike Factory, Nike Unite, and Nike Community stores. 

Powering the People 

Nike by keeping people that empower the brand as its focal point is transforming its operations.  

During the pandemic, Nike prioritized the health, safety, and well-being of its teammates above all else. Nike focused on its people with enhanced COVID protocols and COVID sick leave and pay continuity for essential workers in manufacturing, distribution centres, and retail stores. Extending it further, the brand now invests in its people’s career development, training, and community volunteer opportunities. 

Nike’s team is fueling its supply chain and technology transformation that will enable Nike to more directly serve consumers over the next 50 years. Their resiliency, strength, and creativity will continue to power the brand and remain its single greatest competitive advantage.

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