Nike chose to implement i2’s demand forecasting and supply chain management software ($40 million) along with CRM and ERP from SAP ($360 million).The demand planning system and supply chain management software was implemented first. The problems began with the factory orders, and then the glitch moved through the product delivery system. The result, Nike ended up with shortage of high demand models and an overstock of unpopular shoe models. The excess inventory was discounted drastically and distributed through Nike’s outlet stores. The impact, in June 2001, Nike announced that it expected its earnings for the quarter to fall by one-third. The case study highlights that Nike did not properly assess if it is ready to manage and integrate the ERP implementation projects.
Report Section 2– Project Management, Training, Teamwork (approx. 700 words) 15
Nike’s ERP implementation case study highlights one of the significant ERP failures as well as an exemplary case of learning from the mistakes. Nike applied the lessons learned and the further ongoing ERP implementation was successful. Since Nike adopted a phased implementation after its failure, this allowed for project planning, business and operation analysis including gap analysis, Business Process Reengineering (BPR) and business requirement mapping, project teaming, proper data conversion, and end user training to be carried out more smoothly.
ERP implementation of such a large scale like Nike’s requires effective project management across a lot of staff from several departments, both internal and external to the business.
Based on Nike’s case study findings, what are the guidelines that you can recommend for other businesses should they plan to outsource ERP implementation?