1. SUMMER 2011
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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CHAIN
INNOVATION

2. Agenda"
I. Overview of the business situation and innovation"
II. Supply Chain Innovation at Nike today"
III. Best practices in innovation"
IV. Go forward strategic options and recommendation"
I. Tactics for achieving vision"
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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INNOVATION

3. Supply Chain currently faces the challenge of
supporting substantial growth by 2020"
Business Situation Opportunity Statement
• Lack of existing framework for • In order to support a ~$40B
innovation within the Supply Chain. revenue target by 2020, our Supply
• Opportunistic and reactive to best Chain organization will become an
practice and trends, rather than industry leader in Supply Chain
being first in market or the “trend- innovation.
setter.”
• Slow to adapt • Make change faster
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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4. But wait…what is innovation?"
Innovation means continuous improvement
Identify Problems Solve Problems Implement Solutions
For a faster, more flexible, better informed, and proactive
supply chain
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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5. Agenda"
I. Overview of the business situation and innovation"
II. Supply Chain Innovation at Nike today"
III. Best practices in innovation"
IV. Go forward strategic options and recommendation"
I. Tactics for achieving vision"
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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INNOVATION
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6. Nikeʼs SC today: ~$20Billion and complex"
Objective: Deliver the right amount of the right product at the right time
to the right place, minimizing inventory risk and cost along the way"
12-18mths"
Plan Design Source Develop Forecast Sell-In Buy Make Allocate Deliver Sell-Thru Clean up
~7K" ~1.1K" ~325M" ~240M "
colleagues" factories" pairs" items"
Nike business to grow to $40B by 2020 –
Can’t double resources to double growth;
Need to change thinking
Notes: Factory number is # of for Nike Inc from Supply Chain FY12-14 Strategy Presentation; Shoe count from Global FW Planning; pparel count based on June 2011 SCU presentation"
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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7. SC innovation has varied in the past, but is
often challenged by daily business needs"
Key Themes" Supporting Quotes"
Supply Chain Innovation has “There have been pockets in the past where the
supply chain has been innovative.”!
varied by decade"
“There have been successes and
failures over the years!
“When the company is growing fast, you donʼt innovate in
Innovation has been a challenge the most efficient/effective way- it is more about trying to
in supply chain as Nike grows keep up with the business.” !
rapidly " “The systems and processes suck up all
our time and energy.”!
“We want to be a leader in all aspects
[including supply chain innovation]!
Appetite for supply chain
innovation exists, but viewed in “Think more about approaching innovation as a
problem solving exercise - & sometimes you innovate.” !
different ways"
“If I had a dollar to put against innovation in the
company, Iʼd put it in Product.”!
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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8. Past experience in SC innovation at Nike
demonstrate a mix of successes and failures"
 Overnight shipping"  Future Vision 2- "
implementation of "
× I2 supply chain management
system Nike tried to
implement in 2001. "
 RoamBi- digitize reports "
and consolidate data within "
categories"  Origin of the futures model-"
Keeping up with fast growing "
categories."
Goal: increase ideas and hit rate of innovation"
in the supply chain organization"
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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9. An innovation framework…"
…to inspire a more innovative culture"
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
SUPPLY
CHAIN
INNOVATION

10. Agenda"
I. Overview of the business situation and innovation"
II. Supply Chain Innovation at Nike today"
III. Best practices in innovation"
IV. Go forward strategic options and recommendation"
I. Tactics for achieving vision"
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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CHAIN
INNOVATION
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11. Innovation at our finger tips"
It is all around us!
Innovation with walking distance… …and at the click of a mouse
Global Brand Innovations" Leading innovative companies in the marketplace:!
Byron Merritt – Creative Director"
JR1 - .35 miles - 7 minutes"
Global Content and Digital Media
Department"
Jesse Stollak – Digital Brand and
Innovation Director"
JR2 - .4 miles - 8 minutes"
The Zoo (Special Other Operations)"
Aaron Cooper – Innovation
Design Lead"
MH1 - .5 miles - 10 minutes"
11
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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12. A few clicks later we discovered the
fundamentals of innovation…"
Innovation is rooted in problem-solving"
Problem solving requires a supportive corporate
culture "
Dedication of resources: Proactive communication
time, money, and for different perspectives"
creativity"
Empowerment of employee ideas"
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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13. …and a few steps later we learned about the
components of innovation
Cross-" Inside-out &"
Pollination Outside-in
Innovation
Creative Space Empowerment
NIKE WESTERN EUROPE: UNLOCKINGTHE POTENTIAL
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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14. Cross-Pollination:
Leverage your neighbors.
Analytics
Brand
HR
Affiliates Synergy
Supply"
Chain"
CRM Commerce/"
product
See Appendix B
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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15. Inside-out & Outside-in
We are stuck in the NIKE universe…"
PROBLEM: Limited perspective and creativity"
SOLUTIONS:"
Outside-in Inside-out
• Inside-out: NIKE analyzes and provides POV on external organizations"
• Outside-in: External organizations analyze and provide POV about NIKE"
See Appendix D
NIKE WESTERN EUROPE: UNLOCKINGTHE POTENTIAL
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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16. Empowerment"
Innovation starts bottom up – empower people closest to the problem to innovate!"
PROBLEM: Employees often view themselves as inferior and/or voiceless."
SOLUTION!
Goal: increase innovation
Winner is presented with
opportunity to implement
Employees have 6 months
to submit a short business
VENTURE business plan
plan summary to an online
sharepoint website
FEST
Teams present to a panel
COMPETITION of executive judges
Finalists are selected and
given a small start up Corporate
fund entrepreneurship
boot camp
See Appendix C, F
NIKE WESTERN EUROPE: UNLOCKINGTHE POTENTIAL
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17. Creative Spaces!
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18. Agenda"
I. Overview of the business situation and innovation"
II. Supply Chain Innovation at Nike today"
III. Best practices in innovation"
IV. Go forward strategic options and recommendation"
I. Tactics for achieving vision"
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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19. So what does it all mean?"
SUPPLY
INNOVATION
INNOVATION
CHAIN
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20. Innovation within supply chain should focus on
evolution and optimization"
3 levels of
innovation What is it? Timing Proposed Owner
• Optimizing the current process • Short Term • Everybody involved
through small improvements (<1 year)
• Kaizen mentality
OPTIMIZATION
• Substantial improvements in the • Medium Term • Global Supply Chain
current process (1-5 year)
• Informed by a Supply Chain
EVOLUTION Innovation framework
• Breakthrough disruptive innovation • Long Term • NIKE Inc.
• Completely different thinking or (>5 years) • Touches the whole business
process from current process • External Innovation Group
REVOLUTION (e.g. Nike Innovation Kitchen)
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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21. Supply Chain Optimization"
Everyone is involved"
N
N I
I K
K Non-­‐judgmental
IncenBvizing
ideas
E
E
Job
Swapping
brainstorming
T
T O
O M
D O
A R
Y
R
O
W
Share
Daily
Links
Central
Required
Reach
CollaboraBon
Space
Assignments
NIKE
EVOLUTION
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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22. Supply Chain Evolution"
Owned by Supply Chain Strategy Group"
OPTIMIZATION
N
N I
I K
K Category
/
Geo
Strat
Supply
Chain
Dedicated
InnovaBon
E
E
Plan
Review
Conferences
Employees
T
T O
O M
D O
A R
Y
R
O
W
RotaBonal
Macroeconomic
InnovaBon
Development
Program
Trend
Analysis
Off-­‐sites
NIKE REVOLUTION
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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23. Supply Chain Revolution"
Owned by NIKE, Inc."
• Revolution = state of change as a result of many lower-involvement initiatives
• Revolution ≠ change from a single idea or initiative
• External innovation group(s) outside of the supply chain help foster disruptive
innovation, allowing evolutionary ideas to become revolutionary changes.
SoluBon
External innovation group
Focus on optimization and evolution for revolutionary innovation
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24. Digital is the future: "
Integrate with every step."
Digital is a catalyst for communication and information
• Access more people more quickly – establish communication channels
OPTIMIZATION • Knowledge is borderless – establish insight/idea-sharing networks
• Crowd-sourcing is easy with social – help consumers help you
• A smart supply chain = smart forecasts – social chatter can inform demand predictions
EVOLUTION • Nike is rapidly working to know its social communities – stay involved to stay ahead
o Appendix E
• Digital can integrate systems to improve evidence-based decisions
Right product
REVOLUTION Social Real-time Informed decisions
DisBll
Share
AcBon
Right place
chatter Demand downstream
Right time
To think digitally, act digitally
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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25. Our Big Idea:"
Small innovations  Lasting innovation
Optimization Evolution Revolution
• Non-­‐judgmental
brainstorming
• Job
Swapping
• RotaGonal
development
program
• Share
Daily
Links
• Category
/
Geo
Strat
Review
• Supply
Chain
Conferences
Goal: the most innovative
• Central
CollaboraGon
• Dedicated
innovaGon
supply chain EVER
employees
Space
• Macroeconomic
Trend
Analysis
• InnovaGon
–off-­‐site
• Required
reach
assignments
Competition = innovation: leverage the NIKE culture
NIKE WESTERN EUROPE: UNLOCKINGTHE POTENTIAL
NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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26. What will it take?"
Key success factors
SUPPORT TIME
ENERGY RESOURCES
Nike IS innovation:"
It is up to YOU to write the future of innovation in supply chain.
"
NIKE WESTERN EUROPE: UNLOCKINGTHE POTENTIAL
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27. Evan Baechler
Rory Blanche
Tanner Gardner
Bree McArdle
Tierney O’Rourke
Cydney Ross
Marika Zumbro
Summer 2011 Intern Cross-Functional Project
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NIKE WESTERN EUROPE: UNLOCKING THE POTENTIAL
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INNOVATION