Tuesday, February 4, 2014

Nike's Vision: Lean and Green

Nike, one of the top ten lean manufacturing firms [5], had a very different way of improvising their process. This super-cool apparel company had an out of the box approach. To attain sustainability they worked with NGOs and fellow manufacturers. To create performance indicators and sustainable sources they worked with the Fair Labor Association and US Environmental Protection Agency and other manufacturers, and in the due course saved money and energy on "waste".

Nike's transformation to lean was the outcome of a vision. A vision to revolutionize the manufacturing and supply chain. This vision was well articulated by their definition of a sustainable supply chain; One which is lean, green, equitable and empowered. [1]

Lean -  In terms of their manufacturing philosophy.
Green -  In their approach to design, product creation and sourcing.
Equitable - In their commitment to balance people and profit.
Empowered - By building a workforce that is well aware of it's rights.

Nike's vision is a strong combination of human resource management, environmental practices, and performance. They have a well structured agenda to achieve this mission. [1]

1. Elevating product excellence and innovation at the factory level.
2. Helping to lead industry efforts to integrate sustainability into product creation and manufacturing.
3. Managing sourcing through a balanced approach, taking into account environmental, social, quality and cost impacts.
4. Developing and testing new models of manufacturing that serve to improve worker compensation, skills and livelihood.
5. Consulting with, coaching and building capacity with contract factories to optimize labor and environmental capabilities. [1]

How is LEAN implemented?

Altering the manufacturing process, effective leadership capabilities and an empowered workforce determines the success of lean. Lean manufacturing is all about leveraging the knowledge of those closest to the work to solve the problems of timing and quality of product delivery.

Nike decided to transition to lean in FY 2009, and it started providing resources to the factories to support lean. Nike also offered proper training and coaching to it's resources to adapt to this transition. Within two years of the transition, Nike had 80 percent of footwear, 57 percent of apparel and 11 percent of equipment made which satisfied the baseline of lean.

How is Green achieved?

All the factories producing products like footwear, apparel and sports equipment impact the environment in one way or the other. This impact ranges from the excessive usage of electricity, water; generation of waste, greenhouse gases and the release of toxins. Nike has put constant efforts over the years working with factories to improve management of energy, water, waste, toxic materials and water discharges. They have set a goal of achieving a zero discharge of toxin.

Outcome of Lean

Nike has reaped the benefits of moving to ‘lean’ manufacturing. It has achieved the same with shorter lead times and fewer product defects in its supply chain  [3].

Nike learnt from its past mistakes. Whenever they encountered inconsistency, they audited and remediated the root cause of the problem. This is what led them to to develop the “lean, green, equitable and empowered” strategic framework in 2010-2011 to achieve consistency, meet goals and achieve quality. All these decisions were made as a part of business process giving due weightage.
Nike is also focusing on building tools for the factories to aim for better performance.They are leveraging the learning of sustainable business model to achieve a successful business model. 

But aren't success and perfection relative terms? And the journey is endless to reach there.


[1] http://www.nikeresponsibility.com/report/content/chapter/manufacturing

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