Practical example of base source optimization : footwear profiling at Nike, Inc.

Abstract

The long term sourcing for footwear development, or "profiling," at Nike, Inc. has grown with the company and become significantly complex. It is no longer possible for a single person, no matter the level of experience, to optimize the company's profiling plan without computational assistance. Optimization methods, specifically mixed-integer linear programing, present an opportunity to save between 6.7 and 9.7% of combined labor and duty costs to the company. The model proposed by this research is responsible for justifying that potential but is merely a starting point for Nike, Inc. Further application and research into the company's manufacturing processes including transportation costs, technology groupings, and the Manufacturing Index (MI) could wield results that far surpass the levels obtained by this research. Implementation of an algorithmic approach is challenging for an organization that values "storytelling," collaboration, and narrative. However, in time I believe that this model, or something similar, will find a place, and deliver results, for Nike, Inc.