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Scm & Erp Software Implementation at Nike – from Failure to Success

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Submitted By saadmohsin82
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1 - What are the failure factors for the first NIKE-i2 ERP-SCM implementation?

The following factors contributed to the failure if the ERP-SCM implementation for Nike which then resulted in a loss of $48 million for the year:

• i2 Inexperience: Nike although were aware that i2 was unable to provide all the required functionalities initially, requested i2, who were already inexperienced with the footwear industry, to adjust and provide high level of complex customization.

• Integration: Nike failed to hire a Third Party Integrator which could have assisted them in overlooking the entire implementation. The integrator could have advised on any issues as well as act as a means of communication between Nike and i2. Instead, i2 was not even integrated with the current SAP ERP, and was rather set up to perform in complete isolation

• Customization: Nike underestimated the complexity of the implementation by demanding i2 high level of customization by having an extremely high level of detailed forecasting in addition to trying to forecast too far ahead. i2 was unable to keep up with the quick changes in the market and seasonal trends and thus creating several delays and inaccurate forecasts.

• Pilot Test: Nike underestimated the potential risk of failure in implementing i2 and did not conduct any pilot testing. Having done so, could have prevented or at least minimized their losses. A pilot test would have enabled them to be better equipped and deal with any such circumstances.

• Inadequate Information: Nike failed to provide adequate information required to generate such complex and detailed forecasting. The insufficient data resulted in the system providing false and inaccurate forecasting numbers.

• Review Meetings: There was a lack in sense of ownership on the project as well as the level of co-operation between Nike and i2....

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