A process improvement framework for achieving agility for replenishment products

Abstract

With a goal of becoming a $50B company by 2020, Nike is improving current processes and using innovation to break barriers in technology, supply chain and manufacturing. The objective of the internship project with Nike's North America Always Available team is to provide recommendations on how the company can reduce the lead time from a when customer places a replenishment order to when the product is delivered to the customer's stores. The project focused specifically on a direct shipping strategy for the socks category and accelerating the order flow process at the distribution centers (DC). These two areas provide tremendous opportunity for growth for Nike through improved transportation, on time delivery to customers, and alleviating product congestion at the DC. Win Socks Back In the last few years, Nike has been losing market share in the sock category to competitors who are using faster and more aggressive methods, such as air freight, to ship socks and other products to customers. This has influenced Nike to begin to look at a variety of strategies, such as improving supply chain responsiveness and relieving DC congestion, as potential solutions. The primary goal of this project is to provide strategies that will reduce the lead time from factory to customer store. The approach consisted of using analytical and business principles to help the company to review and reassess the capabilities of the factory and DCs, as well as the transportation methods for short lead time (SLT) products. The output of the socks project was a review of current capabilities, an assessment of the company's ability to execute a direct shipping strategy, and preliminary recommendations on how to execute this strategy. Accelerate Order Flow In addition, Nike is also taking a closer look at the performance of the distribution centers. The order flow project will focus on improving the processing cycles and Call-for-Routing process for Nike's biggest accounts at two distribution centers in Memphis. The project focused on all product categories for Nike's Always Available product line. At this time, every account has a different ordering, processing and transportation, and this results in complexity for the DC and customer services teams because they are not able to plan for efficiency. The focus was on two initiatives: a quick win process improvement strategy and long term enhancement plan, for order writing, DC operations, transportation and routing. The final deliverable included a compilation of the current process for six strategic accounts, an analysis on the operational strategy for an ideal future state, and a model to review DC lead time performance monthly.