Nike recently announced their plans to undergo some major changes to the way it produces its products and gets them through the logistical network to consumers. These changes include more direct-to-consumer sales through online channels and their branded stores, 25% less style selection to streamline inventory, reduction of global workforce by 2% and other changes. The moves appear to be a response to the trend of cutting out the middleman when it comes to consumer sales of footwear and apparel.
On the surface, this move is bound to affect Nike’s manufacturing arm. Specifically:
- Less product selection will reduce overhead costs
- Less raw materials needed at facilities
- Selling directly to the consumer can reduce production time
- Reduction in logistical costs such as distribution to wholesalers
- Less use of machinery, cutting down on energy costs in production facilities
- Increased investment in technology to coordinate between facilities and physical stores
Speaking more specifically to the manufacturing process itself, we imagine Nike will begin implementing lean manufacturing or mass customization techniques as more and more consumers are gravitating towards athletic brands for their athleisure styles, a fashion-over-function approach. This could also shift some of their manufacturing facilities to just-in-time practices, only fulfilling orders after they’ve come in.
Overall, this move is definitely a reactive one as an increasing number of athletic brands try to target customers directly in the growing digital age. There are certainly industries that benefit from a more streamlined approach to their manufacturing and logistics. Will Nike be able to catch up to its competitors in product selection and overhead reduction? Share your thoughts with us in the comments section below! Be sure to visit us online at www.gesrepair.com or call us at 1-877-249-1701 to learn more about our services. We’re proud to offer Surplus, Complete Repair and Maintenance on all types of Industrial Electronics, Servo Motors, AC and DC Motors, Hydraulics and Pneumatics. Please subscribe to our YouTube page and Like Us on Facebook! Thank you!