Inventory Problems at Nike

Nike built its original demand management system in the mid-1980s, as it moved towards becoming the number one sports shoes retailer in the world. During that period, Nike had also tremendously increased the number of its manufacturing units around the world. The demand management system was designed and implemented by over one hundred information specialists within the company. This system was designed to run the Futures program introduced by Nike in the 1970s, which was supposed to help Nike manage inventory more effectively. Under this system, Nike's retail partners placed orders with the company six months before the required delivery date. These orders were then forwarded to the manufacturing units around the world...

Both, Nike and i2 came out the worse for the supply chain failure. Analysts felt that, the negative publicity and the washing of dirty linen in public affected both companies even more adversely than the monetary losses and the production complications. However, Nike continued to work with i2 on the five-year long project and by the end of 2003 (the project was to end in mid-2004), had made considerable progress. In September 2003, the company announced that its ability to closely monitor the movement of goods from raw materials through factories to retailers was finally paying off...