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Direct Ship Model

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Submitted By neilyeon
Words 2086
Pages 9
The Best Logistics Practices Model Regarding “Direct Ship”
Executive Summary
This report shares the best logistics practices that Nike China Supply Chain implemented to postpone capital investment in logistics infrastructure, and optimize operation efficiency by shortening delivery lead time and reducing cost of logistics operation. The research draws attention to Nike China’s vision of increasing revenue to $4B by 2015, which means 60% growth from 2012. Even though the China Logistics Center (CLC) had been in operation since August 2010 to support the fast growing business, the expected demand would exceed CLC’s capacity shortly in 2014. Further analysis also indicates that China is not only a key market for Nike, but also a main manufacturing base. It happened that products manufactured in south China had been shipped to CLC in east coast then shipped back to customers in south. The former Logistics Operation Director who was in charge of implementing “Direct Ship” introduced how the initiative helped overcome the challenges: Setup consolidation hubs near the main manufacturing bases of South and East China Coast, where also the import ports locate. Cross dock products from consolidate hubs to customers in nearby regions.

Nike China and Richard Xing
NIKE, named for the Greek goddess of victory, is the world's #1 shoe and apparel company. NIKE designs, develops, and sells a variety of products and services to help in playing basketball and soccer (football), as well as in running, men's and women's training, and other action sports. NIKE's operations are divided among six geographic segments: North America, Western Europe, Central & Eastern Europe, Greater China, Japan, and Emerging Markets. Greater China market represented about 10% of Nike’s revenue. Worldwide, NIKE sells its products to wholesale customers and directly to consumers through its Direct to

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