During a company earnings call in June CFO of Nike, Matthew Friend remarked on the company’s plan to launch its new global ERP system so as to increase product visibility and productivity.
Nike is attempting to combat its increased levels of “in transit” inventory by becoming more agile with such a quickly changing market.
This unstable and constantly changing market, as with most things these days, is due to the pandemic.
Previous levels of efficiency that were experienced before the pandemic are still trying to be re-realized. For Nike, getting this ERP system in place is the key.
The volatile market that supply chains are living and breathing these days isn’t really expected to improve through the end of 2023.
Nike themselves has spoken to having overloaded inventory reserves due to Chinese factory closers.
Due to this Nike has reportedly been experiencing issues with meeting customer demands and deliveries for seasonal items.
Obviously, for seasonal products in particular this is a massive issue compared to more typical products as things become very time sensitive.
Due to shifting market conditions in the Chinese region, Nike is recalibrating its supply and demand metrics for this area.
Nike has been planning to overhaul their ERP system since 2020, as many other competitors did as well in response to the pandemic.
That being said, such an overhaul is never easy. Especially when it comes to supply chain problems. One little change might change 5 other things down the supply chain line, as just a basic example.
Nike’s overhaul seems to have the intent to better consolidate their inventory in a way to improve overall visibility for their customers.
This new direct-to-consumer-focused strategy Nike hopes will help jumpstart their upward climb in profits within China.
This all being said, we can expect that Nike’s ERP system won’t be seen in North America until 2024.
We will be closely monitoring this story as it might set a precedent for other supply chain retailers.