Largest shoe manufacturer

Largest shoe manufacturing businessQ1.a) The reasons that prompted Nike to change its approach to strike forecastingNikes growth from being the twelfth largest shoe manufacturer in 1984 to the world leader in the footgear industry by mid 1990s increased the intricacy of its manufacturing schedules. The affect forecasting adopted by Nike prior to considering the new approach axiom the retailers placing an order hexad months ahead of the delivery. Due to the six months lag in delivery Nike could not forecast whether the ordered shoes would be in demand after six months once they reach the store shelves1.The breathing forecasting technique failed in identifying the quantity of order to be fit(p) with such a long lead time. And had to depend solely on their brand name and hoped that the product would sell.The expanding market demanded a faster delivery, indeed pressurizing Nike to shorten the lead time from the standard shipping time of six months.The 27 order management systems t hat formed Nikes supply chain crumbled downstairs pressure to develop accurate demand forecasts, these factors lead Nike to implement a new demand forecasting.b) Outcomes of the new demand forecasting system.The vigorous demands indirectly affected the new demand forecasting system, resulting in excess manufacturing of most products while developing inventory shortages for others as they struggled to cope up with the guest demands.Nike ended up ordering US $90 million cost of shoes which were in low demand like Air Garnett II, to a fault a shortfall of US$80 million to US$ deoxycytidine monophosphate million on popular models, like Air Force One.Nike fill the back orders that were to be supplied and disposed of excessive inventory by tax deduction sales and bargain basement prices through its outlet stores. This continued for nearly 6-9 months to neutralize the incorrect proportions in inventory and two years to shoot down the financial losses.Nikes share prices dropped cons iderably due to the losses and faulty forecasts. cost Nike more than US$100 million in lost sales, in that location by lowering its stock prices by 20% and also direct it to a series of legal battles.Q2.a) The reasons that resulted in such a long gap between demand and supply at NikeThe implementation of i2 had indecorous effects for Nike, since I2 were inexperienced in providing supply-chain systems for the footwear and apparel industry.Nikes higher demand data meant heavy customisation was done on i2 this clogged up the parcel thus by slowing it considerably to such an extent that a single screen would take 3 minutes to load2.Further analysts utter that Nike was installing SAP software to help take orders from customers and get those orders through manufacturing. This led to queuing which led to the complexity in matching up of development from SAP and i22.Thus Nike had erroneous orders being sent to the manufacturers and was unable to date from from the errors until it wa s too late.b) According to my opinion this situation could have been avoidedIf Nike would have considered the facts of acquiring actual data from retailers like direct point-of-sale integration or else than software algorithms.By developing a better collaboration with the uttermost east manufacturers to reduce the overall lead time there by converting the supply chain from make-to-sell to make-to-order.Nestl and Nike How they almost failed by Gene LeshinskyFebruary 18th, 2008Long unlike Trip Nike Finally Regains Footing By Larry Barrett