ERP Implementation Failure In Nike SCM: Lessons Learned!

 




Damages Estimated - $400 Million


A supply chain management system is intended to assist a corporation in streamlining and centrally managing the movement of products and services. It is not intended to result in excess inventory or lengthy order delays.


However, it is precisely what occurred when Nike introduced an SCM system in 2001. The SCM project, carried out in collaboration with i2 Technologies, began promisingly but rapidly deviated. As a result, the mega-supply brand's chain failed at multiple vital points, resulting in a considerable decrease in income.


Here, we're taking a thorough look at the Nike SCM failure. We'll talk about what occurred, what we learned, and how you may prevent a similar fate in your implementation.



Learnings from the Nike SCM Failure!

Here are a few crucial takeaways from the Nike SCM failure:


1 - Comprehend the complexity of your industry

Nike SCM was intended to be a multi-year system update that would eventually lead to worldwide deployment; hence, project leaders should have developed a plan that adjusted for industry-specific obstacles. Arranging everything into an SCM system is a complex and time-consuming task. There are several items, but there are also various color and size alternatives to pick from. Before going live, make sure you have the funds and efforts to input all of this data. This involves assigning the appropriate individuals to the task.


2 - A project's customization can strain its resources

Numerous organizations opt to personalize various aspects of their SCM, CRM, or Enterprise Resource Planning System. While these modifications might assist the software meet the specific demands of a business, they can also add expense and risk to the project. The i2 software included an apparel industry template with the Nike project, but Nike elected not to utilize it. Instead, they took a unique strategy and hastened the conversion process, opting for data that did not adequately reflect their firm. This pushed the program beyond its limits, causing data transmission difficulties.


3 - A key to success is testing and pilot runs

Among the most apparent problems with the Nike SCM ERP implementation was that the system was never tested before going live. Any corporate software project must include testing. It allows the IT staff to discover and correct any flaws or problems. Simultaneously, it is critical to undertake system pilot runs. Going live without proper testing exposes the system to failure and reduces user morale.


4 - Differentiation depends on the right talent

The people in charge of an SCM project can significantly impact its success. Nike and i2 both confessed to having weaknesses in this area. This was a large project that necessitated the use of top-tier experts. All parties should have been equally involved in the outcome by assembling a competent project team. Regrettably, Nike's IT personnel was already overburdened at the installation due to their involvement in two other projects involving ERP Software and CRM software. 



Plan your software project to the best of your ability!

The difficulties involved with Nike's SCM failure should not prevent you from pursuing a similar initiative at your organization. SCM software may help you increase the effectiveness of your supply chain management procedures if you have the correct strategies in place.


You can avoid a similar outcome with your implementation if you plan carefully and hire a professional like Connected IT Consulting. 


We suggest contacting our ERP development experts to learn more about how we may assist you. Web Design Ireland
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