Unit 8 discussion response_MT433

13387Respond or elaborate on the response below:

In 2001, Nike experienced a major supply chain disaster (Ashcroft, 2021). The sports-gear giant implemented a new supply chain planning system, but unfortunately, bugs and integration blocked the company from planning and falsely counted the inventory. As a result, Nike was left with significant inventory shortages and excesses.

This disruption costs Nike $100 million in lost sales due to a misplanned decision, which triggered a flurry of class-action lawsuits. In addition, Wall Street knocked 20% off its stock price.

To deal with this disaster, Nike had to slash the prices to get rid of the additional inventory, hoping to reduce the lost margin. Nike had no choice but to be patient and wait for the new ERP system to be fully developed and synced with the company, and Nike decided to order 90% of their products six months in advance to meet their forecasts.

It is critical every time a company tries to implement a new system, and patience should be the major factor. I would recommend that Nike, and everyone else, should wait and do unlimited test runs until the new system is running smooth before fully implementing it.