How Nike Harnesses Supply Chain Analytics for Global Operational Excellence

Overview

Let's start with a bit of background  about Nike, it is a highly renowned and globally acknowledged brand in the sports and athletic clothing sector, known for its pioneering mindset since 1964. Throughout the years, Nike has expanded into a powerful international force, catering to customers in more than 200 countries and having almost 76,000 employees globally.

That's an incredible journey, right? And a key factor of their success story is their unwavering commitment to operational excellence through advanced supply chain analytics. By collecting and analyzing vast amounts of data across their global supply chain operations, Nike has been able to uncover valuable insights into demand forecasting, inventory management, and logistics optimization.

So, how did they achieve this? By embracing the power of supply chain analytics and using it to shape a highly responsive, efficient, and sustainable supply chain – one that is well-equipped to anticipate market trends, minimize wastage, and deliver their innovative products to consumers worldwide with speed and precision.

Now, let's dive into some insights (just for learning purposes!) on how Nike might analyze their data to improve their services.

About Dataset

The supply chain analytics datasets provide a comprehensive view, including an order & shipment table with details on orders, shipments, products, customers, warehouses, sales, discounts, and profits; an inventory dataset capturing product inventory levels and costs across warehouses; and a fulfillment dataset tracking order fulfillment times for products and warehouses. These datasets collectively offer insights into demand patterns, inventory optimization opportunities, logistics performance, customer satisfaction metrics, and profitability analysis, enabling data-driven supply chain decision-making and process improvements. Order and shipment table consist of 30782 rows and 24 columns.

Order & Shipment table (Important Column)

Inventory Table

Fulfilment Table

How Nike Harnesses Supply Chain Analytics for Global Operational Excellence

It is essential for data analysts to work with large datasets, such as those found in the supply chain. Analyzing supply chain data is crucial for streamlining operations, increasing efficiency, and saving costs. Our five-step plan focuses on understanding key supply chain data analysis components. By utilizing supply chain analytics, patterns in inventory levels, demand forecasting, and logistics optimization can be identified for various products and regions. This allows supply chain professionals to tailor procurement strategies, enhance distribution methods, and improve overall supply chain resilience by pinpointing potential bottlenecks and risks. Analyzing supply chain performance data helps enhance operational efficiency, cut costs, and establish a more adaptable and responsive supply chain that aligns with organizational objectives.

Step 1: Identify the user or stakeholder for dashboard

In this initial stage, it is essential to identify who will be receiving the data presented on the dashboard. In this case, the recipient is a Supply Chain Manager. The responsibilities of a Supply Chain Manager include overseeing the movement of goods, services, and information from the start of the supply chain to the final delivery of products to customers. They manage various tasks such as handling supplier relationships, optimizing inventory, coordinating logistics, monitoring lead times, and ensuring prompt deliveries.

Supply Chain Managers and similar stakeholders require detailed data to make informed decisions. This data includes information on procurement expenses, inventory levels, transportation performance, and market trends that affect supply and demand. These individuals encounter challenges such as managing supplier risks, dealing with disruptions, minimizing lead times, optimizing transportation routes, and reducing costs while upholding service standards. To address these challenges, Supply Chain Managers need thorough analytics to pinpoint issues, improve processes, and enhance the efficiency of the entire supply chain network.

Step 2: Design Empathy Map

To truly connect with the experiences and expectations of a Supply Chain Manager, the creation of an empathy map is invaluable. This visual tool allows for a deeper understanding of the emotions, aspirations, and pain points of users. 

By empathizing with their perspectives, we can design a data story that not only meets functional requirements but also resonates with the human elements of their roles.

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Step 3: Identify the Key Performance Indicators (KPI’s)

Once an empathy map is ready. As a data analyst, you need to decide on the most important things to keep an eye on, called KPIs (Key Performance Indicators).The heartbeat of any analysis lies in KPI’s and their Metrics. It's crucial to identify the KPIs that matter most to achieving the defined objectives and by focusing on the most relevant metrics, organizations can gain actionable insights into Supply Chain Analytics.

Step 4: Understand the Goals & Objectives of User

Based on the Empathy Map and KPIs, it is essential to establish the goals and objectives of the Users. This will help align with the data story functionalities for effective decision making. Here are the Key Objectives & Goals:

Objective :

Enhance the efficiency of the company's supply chain operations from start to finish to lower costs, improve customer satisfaction, and gain a competitive edge. Use data-driven analysis to examine important metrics like delivery times, inventory levels, supplier performance, transportation costs, gross sales, and profitability. The objective is to pinpoint areas needing enhancement, reduce risks, and introduce methods that simplify procedures, minimize waste, and boost profitability in all products and regions.

Goal :

Maintain high levels of customer service by improving delivery times and order fulfillment in all markets. Increase sales and profits by focusing on popular products and expanding into new markets. Analyze sales data to find areas for improvement and identify new opportunities. Improve inventory management to lower costs and keep products available.

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Step 5 : Ask Business Questions

Beyond KPI’s, organizations must engage in business-driven inquiry. This involves asking strategic questions that directly align with overarching business objectives.

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1. How have gross sales and profits trended over the past few years?

• The gross sales and profits have shown some variation over the past few years. In 2015, the sales were 2.1M with a profit of 1.4M. In 2016, the sales increased to 2.2M, generating a profit of 1.4M. However, in 2017, the sales dropped to 1.9M, with a profit of 1.2. It is essential to analyze the factors contributing to these changes to make informed decisions for the future.

SQL CODE:

SELECT 
    OrderYear,
    SUM(GrossSales) AS TotalGrossSales,
    SUM(Profit) AS TotalProfit
FROM 
    OrderShipment
GROUP BY 
    OrderYear
ORDER BY 
    OrderYear;

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2. Which products have consistently high fulfillment times ?

-  Data indicates several products experience consistently high fulfillment times, exceeding 9 days. Examples include Nike Kids Grade School shoes, Titleist Pro v equipment, and Elevation Training Masks. 

SQL CODE:

SELECT
    ProductName, 
    WarehouseOrderFulfillmentDays
FROM
    WarehouseFulfillment
WHERE
    WarehouseOrderFulfillmentDays <= 9.9;

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3. What are the most popular shipment methods chosen by our customers?

• Standard class is the clear favorite for our customers, accounting for $3.599 million in sales. This is followed by second class at $1.208 million and then first class at $0.983 million. Same-day delivery, while convenient, sees lower sales at $0.391 million.

SQL CODE:

SELECT
    ShipmentMode,
    SUM(GrossSales) AS TotalSales
FROM
    OrderShipment
GROUP BY
    ShipmentMode
ORDER BY
    TotalSales DESC;

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4. Which are top performing products in terms of  the highest sales in the last fiscal year?

• The Field and Stream Sportsman Gun 16 Fire Safe took the lead in sales, bringing in a substantial $1.15 million. Coming in closely behind is the Perfect Fitness Perfect Rip Deck, a fitness product that achieved sales of $0.78 million. Rounding out the top three is the DiamondBack Women's serene classic comfort, a women's item from DiamondBack, with sales of $0.73 million. Nike Men's Running Shoe 5.0+ also made a notable appearance, generating $0.65 million in sales. Lastly, the Nike Men's Dri-Fit Victory Golf Polo secured the fifth spot with sales of $0.54 million.

SQL CODE :

SELECT
    ProductName,
    SUM(GrossSales) AS TotalSales
FROM
    OrderShipment
WHERE
    OrderYear IN (2015, 2016, 2017)
GROUP BY
    ProductName
ORDER BY
    TotalSales DESC
LIMIT 5;

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5. How do sales and profit distribution vary across different regions?

• Different regions show significant differences in sales and profit distributions. Central America stands out with the highest sales of $1,019,057 and profits of $666,514. Following closely is Western Europe, which earns $613,574 in profits despite having lower sales of $967,705. South America, Northern Europe, and Southern Europe also play notable roles in the financial landscape, each contributing uniquely due to diverse market dynamics and operational efficiencies.

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SQL CODE:

SELECT
    CustomerRegion,
    SUM(GrossSales) AS TotalSales,
    SUM(Profit) AS TotalProfit
FROM
    OrderShipment
GROUP BY
    CustomerRegion
ORDER BY
    TotalSales DESC;

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6. Where are our core customer segments concentrated geographically?  And what are sales contributions by the customer market ?

• Our core customer segments are concentrated geographically as follows:

1. Latin America (LATAM) - 279,148 sales, which represents the largest share of our sales.

2. Pacific Asia - 172,237 sales, the second-largest share.

3. North America - 33,456 sales, a smaller but still significant share.

4. Europe - 31,906 sales, a moderate share.

5. Africa - 27,856 sales, the smallest share among the major regions.

In summary, LATAM and Pacific Asia are our primary customer markets, with North America, Europe, and Africa contributing smaller portions to our overall sales.

SQL CODE:

SELECT
    CustomerMarket,
    SUM(GrossSales) AS TotalSales
FROM
    OrderShipment
GROUP BY
    CustomerMarket
ORDER BY
    TotalSales DESC;

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Outcome

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1. Sales and Profit Trends

The company's sales and profits have fluctuated over the past few years. In 2015, sales were $2.1M with a profit of $1.4M. Sales increased to $2.2M in 2016, but dropped to $1.9M in 2017, resulting in a lower profit of $1.2M.

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2. Fulfillment Times and Product Performance

Certain products experience consistently high fulfillment times, exceeding 9 days. Top-selling products include the Field and Stream Sportsman Gun 16 Fire Safe, Perfect Fitness Perfect Rip Deck, and DiamondBack Women's serene classic comfort. Standard class shipping is the most popular, accounting for $3.599 million in sales.

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3. Regional Sales and Profit Distribution

Central America leads in sales and profits, with $1,019,057 in sales and $666,514 in profits. Western Europe follows closely, with $613,574 in profits despite lower sales. Other notable regions include South America, Northern Europe, and Southern Europe, each contributing uniquely due to diverse market dynamics and operational efficiencies.

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4. Customer Segments by Region

The company's core customer segments are concentrated geographically, with:

LATAM (279,148 sales) and Pacific Asia (172,237 sales) being the largest shares.

North America (33,456 sales), Europe (31,906 sales), and Africa (27,856 sales) contributing smaller portions.

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5. Shipping Class Preferences

Customers prefer Standard class shipping, which accounts for $3.599 million in sales. Second class and First class shipping follow, with $1.208 million and $0.983 million in sales, respectively. Same-day delivery, while convenient, sees lower sales at $0.391 million.

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6. Key Products and Sales

The top 5 products by sales are:

1. Field and Stream Sportsman Gun 16 Fire Safe ($1.15 million)

2. Perfect Fitness Perfect Rip Deck ($0.78 million)

3. DiamondBack Women's serene classic comfort ($0.73 million)

4. Nike Men's Running Shoe 5.0+ ($0.65 million)

5. Nike Men's Dri-Fit Victory Golf Polo ($0.54 million)

Conclusion

Based on the Supply chain  data analysis, key areas requiring attention include the fluctuations in yearly sales and profits for different products and regions, dealing with ongoing delays in fulfilling orders for popular items, and managing the differences in sales and profits from various regions. By using this information to create specific strategies, improve processes, and increase visibility in the supply chain, Nike can reduce costs, enhance customer satisfaction, and gain a competitive edge.

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