“Nike : Stronger Systems, Smoother Work: Evaluating What Matters Most
One Day in 2008, the owner of a small bakery in Germany named Andreas realized that his customers were dwindling. Not because the bread wasn’t good , but because the queues were too long. He decided to observe the process from start to finish. As it turned out, most time was wasted in the oven, which was often idle due to an inefficient production schedule. After reorganizing the work process and schedule, sales increased by 30% in two months.
Sometimes, the solution is not to increase manpower, but to optimize what is already there.
It Is About Optimization, So What is It?
In The World Of Business Optimization Issues is a situation where resources within a company-such as time, labor, capital, or technology-are not being utilized to their full potential, hindering the achievement of business goals.
How Do Companies Identify Optimization Problems?
- Visualize Workflows
Create simple diagrams to spot unnecessary or repeated steps. - Benchmarking
Review how each department works and compare to find better ways. - Data Analysis
Compare company results with industry or competitors’ performance. - Technology Assessment
Check if current tools still work well or need updates. - Customer Feedback
Use customer input to see which processes need improvement.
Efficiency is doing things right; effectiveness is doing the right things.” — Peter Drucker
The Atmosphere In 2000 is little bit smothering, Nike faced a major challenge in its efforts to optimize its supply chain. The company decided to implement a demand planning system from i2 Technologies with the aim of improving efficiency and responsiveness to market demand. However, the implementation was a significant failure, causing financial and operational losses.
How Nike Identified the Optimization Problem
Sharp Decline in Sales and Financial Forecasts
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In 2001, Nike’s leadership noticed a sudden drop in revenue, particularly in key product lines like Air Jordan.
They missed sales targets by tens of millions of dollars, prompting an internal investigation.
CFO and CEO both publicly acknowledged that “a glitch in the supply chain software” was at fault.
“We had a systems issue and over-delivered low-demand shoes while under-delivering high-demand ones.” — Nike Executive, 2001
Inventory Imbalances
Customer and Retailer Complaints
Software and Systems Audit
Operational Feedback Loops
Inaccurate Demand Predictions: The i2 system generated erroneous demand predictions, resulting in overstock on some products and understock on others.
Poor System Integration: System implementation was rushed without adequate integration with existing ERP and CRM systems, causing disruptions in information flow and business processes.
Panorama Consulting Group
Lack of Training and Team Readiness: Nike’s internal team was not adequately trained to operate the new system, which exacerbated problems in day-to-day operations.
“Verily, Allah loves those who fight in His way in orderly rows, as if they were like a firmly constructed building.”
(QS. As-Saff: 4)“Technology doesn’t fail, people do — especially when implementation skips planning.”
— Paraphrased from Panorama Consulting
Efficiency and optimization are not just business strategies, but part of the mandate in managing the resources that Allah entrusts.
