Page 304 -

262 Chapter 9 • Organizational Change and Business Process Reengineering

May 31, 2004, manufacturing plants included Nike brand, with 137 factories in the
Americas (including the United States), 104 in EMEA, 252 in North Asia, and 238 in South
Asia, providing more than 650,000 jobs to local communities.
OBJECTIVE
Nike grew from a sneaker manufacturer in the early 1970s to a global company selling a
large number of products throughout the world. Nike’s sneaker supply chain was histori-
cally highly centralized. The product designs, factory contracts, and delivery are managed
through the headquarters in Beaverton, Oregon. By 1998, there were 27 different and
highly customized order management systems that did not talk well to the home office in
Beaverton, Oregon. At that time Nike decided to purchase and implement a single-instance
ERP system along with supply chain and customer relationship management systems to
control the nine-month manufacturing cycle better, with the goal being to cut it down to six
months.

PLAN
The company developed a business plan to implement the systems over a six-year period,
with multiple ERP rollouts over that time. The plan called for the implementation of the
demand planning system first while working through the ERP system and supply chain
implementation.

IMPLEMENTATION
The demand planning system was implemented first for reasons that made a lot of sense.
The total number of users was small in comparison to the ERP system and was thought to
be relatively easy to implement; however, this turned out not to be the case. When the
system went live, there were a number of problems related to the software, response time,
and data. In addition, training was not adequately addressed, causing the relatively small
number of end users to use the system ineffectively. The single-instance ERP system and
supply chain implementation plan differed from the demand planning system and called
instead for a phased rollout over a number of years.
The ERP system implementation went much more smoothly. Nike started in 2000
with the implementation of the Canadian region, a relatively small one, and ended with the
Asia-Pacific and Latin America regions in 2006, with the United States and Europe, Middle
East, and Africa in 2002. This included implementing a single instance of the system, with
the exception of Asia-Pacific, and training more than 6,300 users.
The total cost of the project as of 2006 was at $500 million—about $100 million more
than the original project budget.