Facility Layout of Nike Shoes [PDF]

Citation preview

Introduction • Nike, Inc. is an American multinational corporation that is engaged in the design, development and worldwide marketing and selling of footwear, apparel, equipment, accessories and services • The company takes its name from Nike, the Greek goddess of victory • It is the world's leading supplier of athletic shoes and apparel and a major manufacturer of sports equipment • The brand alone is valued at $10.7 Billion making it the most valuable brand among sports businesses



Products • Their first products were track running shoes • They currently also make shoes, jerseys, shorts, baselayers, etc. for a wide range of sports, including track and field, baseball, ice hockey, tennis, association football (soccer), lacrosse, basketball, and cricket • Nike recently teamed up with Apple Inc. to produce the Nike+ product that monitors a runner's performance via a radio device in the shoe that links to the iPod nano



PORTFOLIO OF BRANDS • Converse Inc.



• Hurley International • Jordan Brand



• Nike Golf • Sold Starter in 2007 and Bauer Hockey in 2008



• The company sold Umbro in 2012 and Cole Haan in 2013



The Making of the Shoes 1) The Design Process -establish target price, target audience and product features -produce "tech package" to send to subcontractors in factories in Europe and Asia



2) Supplies A. Raw Materials -fabric -plastic -rubber -foams -metallics B. Textiles and Leathers



3) Cutting In this department, the top part of the shoe or the "upper" is made



4) Sewing (of upper section above the sole) In this process, the upper portion is sewed into a design form



5) Stock fitting (prepares the sole) The sole of the shoes are prepared in this process.



• • •



SUPPLIES : RAW MATERIAL TEXTILES & LEATHERS



CUTTING



STOCK FITTING



SEWING



6) Lasting (prepares attachment of upper to the sole) The upper portion of the shoe prepared is attached to the sole of the shoe



7) Heeling (attaches and shapes heel bottom to final form) After the upper portion is attached to the sole of the shoe, the heel is attached to the sole and is given its final form. This process is termed as heeling



• • •



SUPPLIES : RAW MATERIAL TEXTILES & LEATHERS



LASTING



HEELING



CUTTING



STOCK FITTING



SEWING



8)Finishing Machines smooth out the excess material hanging over the insole by tucking it back in underneath the shoe



9) Treeing (attaches accessories) The shoe laces and accessories are put in place for the final construction of the shoe



10) Distribution & Trading Companies After the manufacturing process, the shoe is then shipped to distribution and trading companies where it is then distributed to retailers and sold to consumers



• • •



SUPPLIES : RAW MATERIAL TEXTILES & LEATHERS



LASTING



CUTTING



SEWING



STOCK FITTING



FINISHING



TREEING



HEELING



DISTRIBUTION & TRADING COMPANIES



Price Breakdown Using a typical Nike Shoe from production to retail: • • • • • •



-Production Labor $2.75 -Materials $9.00 -Rent, equipment $3.00 -Supplier's operating profit $1.75 -Duties $3.00 -Shipping $0.50 -Cost to Nike $20.00



• • • •



-Research and Development $0.25 -Promotion and Advertising $4.00 -Sales, Distribution Administration $5.00 -Nike's operating profit $6.25 -Cost to Retailer $35.50



• • • •



-Retailer's Rent $9.00 -Personnel $9.50 -Other $7.00 -Retailer's Operating Profit $9.00 -Cost to Consumer $70.00



Advantages of product layout • Mechanization of material handling system is possible in order to reduce the cost of same by considerable amount. • This layout requires less floor area per unit of production • Manufacturing time is smaller which reduces the investment in work-inprocess inventories. • Delivery commitments to customers are more reliable and easy to conform. • The work is simplified by breaking into elemental tasks that may be mechanized wherever possible. It leads to the reduction of labor cost. • Same types of jobs lead to the training and specialization among the workers. • Quality control is easy to exercise and more effective. • Materials requirement planning may be done more easily and accurately.



Conclusion • Nike does not directly own any factories; they hire factory owners to produce the shoes using the materials and designs provided by Nike. • The largest producers of Nike shoes are the factories located in China, Vietnam and Indonesia. • Malaysia, Pakistan, India and Thailand are other major producers • The Nike Company focuses almost exclusively on designing the shoes and, after the manufacturing, advertising and marketing them in the most appealing way possible. • Though their facilities comply with local labour standards, generally, they have not met U.S. standards.