Nike - Lean

NIKE
Globalization economic opportunity and social disruption
Lack of social system
MNCs reputation at risk
Private regulation - compliance programs
Problems
Decoupled compliance from business processes
Misalignment between strategy and buyers actions

Focus
Institutionalize social responsibility in supply chain
Change day-to-day operations practice and not to enforce outcomes
Lean - Timeline
2002 - Commitments from long-term manufacturing partners
2004 - Training center was established
2007 - First wave of apparel suppliers committed to the Nike lean program and began meeting to
discuss lean concepts and receive limited training
2008 Lean adoption begins
2009 - Full training curriculum was started at the newly-opened Nike Apparel Innovation and Training
Center (AITC) in Sri Lanka
May 2011 - 80% of Nike's footwear manufacturers had committed to adopting the system and begun to
transform their production processes
2009 to 2014 - Adoption of lean manufacturing produced a 15% point reduction in serious labor
violations on average
How Lean is implemented in Nike
Work is contracted to multiple agencies
Agencies are responsible for efficiency in time and capital spent
Rigorous screening process in selecting vendors
Continuous assessment of performance by integrating improved practices
with the vendors
Building trust in vendors
Inclusion of sub-contractors in company value chain
Lean Capability Building in Nike SC
Proliferation strategy
Training and inspection
Certification of Lean elements in production lines
Consequences
Increased productivity, reduced defect rates, and shortened lead times and
the introduction of new models
Realization of maintaining work-in-progress inventories
Adopted balancing of process cycles and pull-based systems
Supervisors took responsibility for all connected processes
Usage of new easy-to-read visual metrics
Problems faced in this process
Certain issues continue to arise like working hours, overtime and
associated wages
Building relationships with contract factories and developing a new
manufacturing vision is critical.
It has been observed that monitoring does not bring about
sustainable change. Often, it only reinforces a pattern of hiding
shortcomings or failures
Code of Conduct and Code Leadership Standards (CLSs)
NIKE, Inc.'s Culture of Empowerment Mode
Building manufacturing capacity for self-
management
Successful and sustainable approach to
stimulating systemic change and
improving the lives of workers
NIKE, Inc. is utilizing continuous
improvement best practices to become a
leader in lean manufacturing practices.
NIKE, Inc.'s Scoring Card
NIKE, Inc. has more than 1 million workers manufacturing 500,000
different products around the world
To ensure everyone is performing at NIKE. They developed a scoring
system for their contract factories
The Manufacturing Index (MI) they utilize scores each factory in terms
of lean, labor, health and safety, energy and carbon, and
sustainability.
It allows NIKE, Inc. to determine where they need to spend more
attention and resources and where they can allow factories to
operate autonomously
THANK YOU