Analytical Report –

Nike
Tutor: Aabir Quazi AMM
Infs1602 Assignment B
Consulting
SCM Capabilities

As a global business, Nike’s supply chain must be managed extensively in order to ensure its efficiency
and the company has been continually making changes to warrant a streamlined supply chain. However,
there are several areas which need to be addressed in order to create a supply chain that is more closely
aligned with Nike’s global strategy goals, which involve catering to emerging markets and appealing to
new demographics in order to create growth of their global company. Such expansion requires
introducing additional products that cater to specific demographics and regional markets; requiring
extensive management of the supply chain as additional products and growth of a business can create
complexities if not managed properly. As well as this, volatile customer demand corresponds with
increased expectations for responsiveness by the supply chain and Nike needs to address these matters.

The use of Electronic Data Interchange (EDI) would effectively enhance the supply chain by enabling
information about consumer demand and operations to be shared between suppliers and Nike through
electronically integrated information systems. EDI facilitates greater communication and thus reduces
uncertainty regarding materials/products being delivered on time and in sufficient quantities, enabling
Nike with the ability to avoid stock-outs and accommodate the fluctuations in customer demand.

Transport and logistics management is also an imperative aspect of maintaining an efficient global
supply chain for Nike, which has 655 factories spanning across 42 countries, and a goal of catering to a
greater variety of geographical markets, which will place increased pressure on its supply chain. Nike
must implement an effective transport and logistics solutions that give the company a competitive
advantage through its ability to reduce costs and increase the speed at which the supply chain moves.
This process can be implemented through an automated system connecting suppliers, transportation
companies and Nike to assist in refining the co-ordination of transportation and deliveries in order to
optimize the supply chain.

Nike’s shift to a more environmentally sustainable focus of its brand can be implemented into the
supply chain through reducing the number of suppliers in the supply chain and forcing them to compete
with each other to gain Nike’s clientele and Nike only selecting suppliers who both offer the best value
and have met an acceptable level of “eco friendliness.” Transport and logistics management can also be
implemented to assist in achieving Nike’s goal of being more environmentally conscious as this
particular solution optimizes the supply chain to minimize the number of deliveries required to
transport goods/materials which will reduce the company’s environmental impact.

CRM Capabilities

Customer Relationship Management (CRM) solutions can greatly assist in supporting customer
interactions and data throughout the customer lifecycle, with the goal of improving business
relationships with customers, assisting in customer retention and driving sales growth. (Textbook In text
reference) This will be especially useful in addressing the second concern.

Implementing Operational CRM within NIKE can have immense benefits. The Operational CRM system
provides much needed front and backend support for sales and marketing, administrative personnel and
customer service processes. This allows the business processes within the NIKE stores to be more
streamlined which will likely translate to higher revenues for the business stores. One feature of
Operational CRM is sales force automation.
This module works with all stages in the sales cycle from entering initial client information to converting
a prospective client into an actual client. Operational CRM services such as OracleSalesOnline.com is
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able to create contacts, schedules and performance tracking available online so that a customer's
information is readily accessible for all personnel working remotely or in store. These features would be
very useful to NIKE as they able to provide more tailored and efficient customer service both in store,
over the phone and online. Effective customer service cements a good impression among prospective
consumers, which is very important for revenue growth, particularly within the newly launched stores.
Sales force automation is also able to implement sales promotion analysis which automates the tracking
of a client's account history for repeated sales or future sales and coordinates sales, marketing, call
centres, and retail outlets. It is able to prevent duplicate efforts between a vendor and a consumer and
also automatically tracks all contacts and follow-ups between both parties. This feature is also pertinent
to a large corporation such as NIKE, which uses multiple distribution channels. The real time data
retrieved from sales force automation also helps NIKE keep track of profitable outlets allowing for better
planning, scheduling and coordination. As such the corporation is able to better keep track of the direct
to consumer businesses.

Currently, NIKE advertises its direct outlets through multiple channels including television, online
adverts, social media and magazines. The second module of Operational CRM, Marketing Automation,
focuses on organising the overall marketing process so that it is more effective and efficient. CRM tools
with marketing automation capabilities can systematize repetitive tasks such as sending out automated
marketing emails to consumers on NIKE email list at certain times to customers, or posting marketing
information on NIKE’s various social media accounts. Operational CRM also helps integrate campaigns
on different channels while also providing extensive analytical capabilities to analyse effectiveness of
campaign. CRM systems such as Saleforce’s marketing cloud, is able to assist businesses such as NIKE to
tailor marketing campaigns according to how engaged customers are with the business by scoring
customer behaviour. CRM systems also have the capability to assist in customer engagement on social
media. NIKE currently has over 24,000,000 likes on its Facebook page and a large percentage of their
target market (teenagers) are active on social media channels. Marketing CRM’s with social media
support is able to both consumer sentiment on NIKE’s marketing campaigns & products, as well as
identify most effective marketing strategies to further capitalise on. Thus investing in an Operational
CRM solution which would be especially pertinent to NIKE.

NIKE can also take advantage of the Customer service & support (CSS) module which is a part of
Operational CRM. These are systems that automate service requests, complaints, product returns and
info requests. When consumers have any queries regarding the NIKE stores or any aspect of the
merchandise, CSS is able to automate process of organising a query efficiently, so that the customer can
be automatically redirected to the relevant personnel. The CSS is able to support the many customer
interaction centres (CIC) that are behind the direct to consumer business. These centres maintain
multiple communication channels that support the communication preferences of customers, such as
the Web, FB page, blogs. The goal of CSS is to provide great customer service anytime, anywhere and
through any channel while keeping service and support costs low which would be ideal for a large
corporation such as NIKE. Establishing excellent customer service both in store and out would greatly
assist in generating profits across all NIKE outlets.

Another aspect of CRM which NIKE can exploit is Analytical CRM. These systems are able to analyse the
customer behaviour/ perceptions that provide the business intelligence necessary to identify new
opportunities and superior customer service. In establishing the direct to consumer business, NIKE
expects to see a growth in revenue among the mid-teens market. In order to further realise these
expectations, Analytical CRM can be utilised. Using data mining, analytical CRM systems are able create
predictive models of various customer attributes. They also build models for customer demand,
accounting for factors such as price, quality and satisfaction of competitors’ products/services. This data
can be especially useful for NIKE as they are would be able to differentiate which popular products
should be marketed more heavily with within the NIKE stores in order to further attract the mid teen
consumer segment. While, NIKE has customisable footwear lines such as NIKEiD, by analysing consumer
data, the company can differentiate between favourable styles and create sportswear that customers
are likely to purchase. Analytical CRM can also accommodate to the large following on NIKE’s social

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media accounts. Social Networking Accelerator add-on for Microsoft Dynamics CRM helps in monitoring
conversations on social media sites, helping to discover trends in customer sentiment.

In order to create greater customer focus, NIKE would also find investing in Collaborative CRM to be a
worthwhile venture. These systems are able to provide effective and efficient communication with the
customer across all sections of the organisation. Thus, it increases the amount of interaction points
between the organisation and the customer. This means that more departments within NIKE that
interact directly with customers, will be able to access the customer information. As such customer
concerns can be quickly and effectively addressed.

Possible IT/IS security, ethics and privacy issues

Companies and manufacturers, especially those in their supply chain, tend to over rely on their vendors.
Supply chain can result in demanding constant online communication and this can eventually provide
enormous amount of opportunities for online hackers to find out the weakest point of vendors’ security
system and attack on them.

 The most notorious and harmful cyber-attack that causes the most damage to the ones using
the supply chain management is the attack aimed at stealing employee or customer data. The
attackers intrude the sales automation systems and customer database, and both of them
usually contain some customer information. This identity theft correlates with the commitment
of fraud or other crimes.
 According to the recent trend, the incidence of attacks aiming to deny service is increasing. This
can result in Denial of Service (DOS), which causes the system unavailable to the users.
Possible suspects can be a group of customers not satisfied with that system, hackers, formal
employees and Nike’s competitors
 Attacks by malicious software such as viruses and worms can cause the DOS, hardware damage
and data loss.

These issues will reduce the company’s reputation and break the relationship between the customers
and company, as well as jeopardizing production and delivery schedules and cause delays. And as a
result, frustration will arise from the customers and this will be a severe damage to Nike leveraging SCM
and CRM solutions as an integrated enterprise system strategy. And thus, to avoid these issues as
successfully as possible, Nike should make constant vigilance on their server and their roster of
approved vendors to check whether they meet basic network security standards. Also, it is extremely
important to apply the latest and efficient network security technologies. It is less likely for them to fully
protect the server from being attacked, but at least they can alarm Nike once they detect any attacks
and allowing Nike to make expedite action.

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SCM & CRM SOLUTIONS

SAP Hybris SAP Hybris Microsoft Microsoft Oracle SCM Oracle SCM cloud
Criteria Weight
% Score Dynamics AX% Dynamics AX Score cloud% score

1.0 Demand
planning
4 80 320 73 292 83 332
and
forecasting

Safety stock
4 79 316 72 288 81 324
planning
Distribution
4 81 324 77 308 80 320
planning
Supply
network
4 81 324 81 324 85 340
collaboratio
n
Materials
managemen 3 78 234 74 222 79 237
t
Manufacturi
ng 4 85 340 75 300 79 316
execution
Order
4 77 308 81 324 87 348
promising
Transportati
on 4 75 300 73 292 83 332
Execution
Warehouse
Manageme 4 80 320 78 312 85 340
nt
Supply
chain 4 80 320 75 300 73 292
analytics
total 3106 2962 3181

Figure 1. SCM Scoring Model

The Oracle supply chain management cloud solution is determined as the most suitable SCM solution for
Nike as it effectively automates key supply chain activities through an integrated system. The Oracle
solution not only proved to be the highest scored solution overall but also in the key areas of Demand
planning and forecasting and Transportation execution which have been identified as being the core
capabilities of supply chain management that Nike is able to leverage in order to address the most
pressing areas of the company.

Additional components such as Order Management Cloud Service and Oracle Global Order Promising
Cloud Service will allow Nike to optimize its order fulfilment process through the reduction of
bottlenecks and increase the company’s ability to fulfil orders at a greater speed and align with
customer demand, increasing revenue and customer satisfaction levels. The Order Management Cloud
Service component will be of use to Nike particularly as one of the company’s main goals is growth; a
suitable solution must be implemented to accommodate the increased pressure on the supply chain.
Oracle Global Order Promising Cloud Service’s key features addresses the issues that may arise with
Nike’s proposed plans for expansion in the market by matching customer demand for products with
available inventory, which results in more accurate delivery dates, crucial in satisfying Nike’s millions of
customers and thus maximizing revenue.

Oracle Transportation Management Cloud also proved to be the most efficient out the 3 solutions with
one of its main benefits being allowing businesses to “expand into new markets or regions,” aligning

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seamlessly with Nike’s goal to cater to new demographics and emerging regions. This module increases
the transparency of the supply chain, which will effectively allow Nike to manage future issues which
may arise when they begin implementing their expansion strategies.

Oracle Transportation Operational Planning is a module designed to handle complex, multi-tier networks
that span geographies and modes enabling you to plan and execute your global supply chain in a single
platform solution (Oracle, 2016, pp. 1). It aims to increase supply chain efficiency through techniques,
which are designed to optimize selection of transportation modes that reduce costs and reduce the
environmental impact of transporting materials/goods while simultaneously adhering to infrastructure
constraints that may exist in the region such as shipping ports or airports being far away, reflecting
Nike’s goal to become a more environmentally sustainable company.

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 SAP Hybris Cloud
Criteria Weight Microsoft Dynamics CRM (%) Microsoft Dynamics CRM Score Salesforce Sales Cloud CRM (%) Salesforce Sales Cloud Score SAP Hybris Cloud Score
(%)

1.0 Sales
1.1 Sales
4 75 300 85 340 75 300
Automation
(Customer
Information
Processing,
Sales Order
Processing
etc.)
1.2
Collaboratio
n within
Team and 3 80 240 70 210 85 255
across
Organisatio
n
1.3
Workflow
and Task 3 80 240 70 210 75 225
prioritisatio
n
1.4 Sales
Activities
3 65 195 80 240 80 240
Tracking &
Monitoring
1.5 Sales
Retail 4 78 312 80 320 80 320
Execution
1.6 Sales
3 60 180 80 240 85 255
Analytics
Total Sales 1467 1560 480 1595

2.0
Marketing
2.1
Marketing 4 70 280 75 300 80 320
Automation
2.2 Multi-
channel 3 65 195 75 225 75 225
Campaigns
2.3
Marketing 3 70 120 70 120 80 240
Analytics
2.4
Information
on
Marketing
2 80 160 0 0 75 150
Database
across
geographica
l locations
2.5
Marketing
Resource 3 85 255 70 210 75 225
Manageme
nt
Total
1010 855 1160
Marketing

3.0
Customer
Service
3.0
Integrate
Customer
Information
3 80 240 65 195 70 210
across
organisation
and
suppliers
4.2 Service
2 70 140 65 130 75 150
Analytics
4.3 Social
Media
Customer 4 65 260 70 280 75 300
Service
Capabilities
Total
Customer 640 605 660
Service

4.0 Social
Engagemen
t
Social
4 65 260 80 320 75 300
Listening
Customer
Sentiment
towards 4 60 240 80 320 70 280
Brand and
products
Social
Media
4 60 240 80 320 70 280
Customer
Analytics
Real time
Social
Media 4 60 240 68 272 80 320
Message
Response
Real Time
Social
4 70 280 68 272 75 300
Media
Updates
Brand Level
4 60 240 80 320 70 280
Trends
Brand Level
1500 1824 1760
Trends

General
5 .1 Easy to
3 65 195 70 210 75 225
Use
5.2 Mobile
4 80 320 80 320 80 320
Support
Total
515 530 545
General

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Grand Total 5132 5374 5720
Figure 2. CRM Scoring Model

From figure 2, the recommended best of breed CRM solution for NIKE is SAP Hybris Cloud Solution.
While there are many aspects of CRM that NIKE can utilise, the categories which NIKE required the most
to optimise its Direct to Consumer process was Sales and Social Engagement. In both these categories,
SAP came out as the leader due to its ability to integrate customer information more easily. As NIKE
aims to use the direct to consumer process to increase revenue in the mid teen consumer segment, it is
important that they advertise more heavily through streams that this target market uses most
frequently. With over 6 million followers on NIKE twitter and equal interest in their Facebook page,
there is a large online customer base that NIKE can capitalise upon to not only advertise their new store
openings, but also reach their target market. As shown in the scoring model, SAP is able to effectively
determine successful online campaigns launched by NIKE through analysing customer sentiment and
social listening.

SAP was also able to differentiate itself from its competitors by providing a CRM system which gave
reliable customer service support. While other CRM systems also provided similar capabilities, users
experienced customer information update error which detracted from the benefits of some systems
such as Salesforce. SAP was also highly commended among users for its marketing capabilities which
were reflected on the scoring card. It is also relatively user friendly which is an added bonus, as while
NIKE is a large corporation with an IT department, the users of this system will mostly be the sales,
marketing and retail sections of the organisation. If the system is simple to use, then users will be able
to utilise the CRM to its full potential.

SAP also offers on premise CRM, however due to the large size and multinational nature of the
company, it is recommended to use a cloud based solution.

Appendix A

The course material was used throughout the report and was crucial in developing a foundation of
understanding in the areas of supply chain management and customer relationship management. In the
initial stage of the report it was evident that the research into Nike’s company goals and strategies had
to relate back to the SCM and CRM components and could not simply be general issues that could not
be addressed by SCM and CRM capabilities. This required application of course material areas such as
SCM architecture and CRM architecture and the fundamentals in developing a SCM and CRM strategy,
which then led to the identification of the most “pressing areas” of Nike which could be addressed with
potential SCM and CRM solutions. The functions that optimize the Supply Network and benefits of CRM
were applied to several situations throughout the report, in particular, the scoring models and how the
“best-of-breed” solutions in SCM and CRM aligned with these functions and benefits in order to
determine the effectiveness and efficiency of the selected solutions. Independent research by each
group member revealed further insights into SCM and CRM capabilities and the true extent of the
importance they each have in a global company’s on-going operations and success. Additional research
built on the fundamental functions of SCM, introducing additional key concepts such as environmental
concerns and an industry shift on implementing SCM solutions which also focus on reducing
environmental consequences of such things as transportation of materials/goods.

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