Environmental Health and Safety Performance

Performance Measurement

Environmental Health and Safety Performance

Successful supply chain performance measurement relies on appropriate metrics that capture the entire essence of the supply chain process. Performance measurements that are considered most important for Nike company supply chain needs is environmental health and safety performance. Nike's business model has frame by the environmental sustainability principles which determine to limit the use of natural resources. In fact, sustainability is an “opportunity for innovation” for Nike company. They are being to deploy econ-friendly materials, products and innovation strategies in their business. For instance, Nike uses a single thread to knit a shoe upper which known as Flyknit technology. This technology helps in preparing lighter shoes and more custom fit. Besides, this Flyknit technology generates less waste during the upper production process. On the other hand, textiles uses carbon dioxide instead of water for the "waterless dyeing" technology. The inventory turnover ratio of NIKE is 2.97. Asset management ratios measure how efficiently NIKE is using its investment in current and fixed assets. Furthermore, the inventory turnover ratio of NIKE is 2.97. This means that NIKE turned over its entire inventory 2.97 times. As long as NIKE is not running out of stock and thereby foregoing sales, the higher this ratio is the more efficiently inventory is being managed. Nike’s lower inventory turnover ratio may be result from its higher cost of goods sold, since it spent more money on innovation and high quality construction in footwear products. The cost of Nike products sold are high because they use econ-friendly materials to make the products to protect the environment.

The company aggressively greening its supply chain in order to reduce and ultimately eliminate the use of toxic chemicals from its processes. There have a list of manufacturing-restricted substances which guides suppliers to know that which are the toxic chemicals that are not allowed in Nike footwear, apparel and equipment. Nike's supply chain access to two innovative tools including bluesign® bluefinder and the bluesign® blueguideto through the strategic partnership with Swiss company bluesign technologies. By using these tools, Nike’s material suppliers are able to producing less toxic and more environmentally and socially sustainable materials and fabrics and reduces the use of water and energy. Asset management ratios measure how efficiently NIKE is using its investment in current and fixed assets.

On-time Delivery                        

Nowadays, time is a critical factor in today’s supply chain, so it is another important performance measurement in their supply chain needs. Nike's goal is to deliver value to  the shareholders by building a profitable global portfolio of branded footwear, apparel, equipment, and accessories

businesses. The The gross profit in year 2013 is $11034 and in year 2014 is $12446 . So, the gross profit in year 2014 is higher than 2013. The increase in gross profit is because Nike is building a profitable global portfolio of branded footwear, apparel, equipment, and accessories business to achieve its goal where deliver value to the shareholders. Nike company's strategy is to achieve long-term revenue growth by creating innovative, “must have” products, building deep personal consumer connections with Nike, and delivering compelling consumer experiences at retail and online.  In addition, to achieve long-term, sustainable revenue growth, they continue to struggle to deliver shareholder value by driving operational excellence in expanding gross margin by delivering innovative, premium products that command higher prices while maintaining a strong consumer price-to-value proposition; lowering the product costs through a continued focus on manufacturing efficiency, product design, and innovation; and making the supply chain a competitive advantage. Time compression can be defined as reducing the amount of time taken for a process in a business operation. Cash and receivables for Nike company are influenced by supply chain reliability such as on-time delivery. For example, inputs is being transformed to expected outputs but in a compressed period of time. To achieve the time compression for the holistic supply chain, Nike need to identified then removing waste and refocusing on the process steps if the activities does not add value to the process. The horizontal and vertical structure in the supply chain including suppliers, manufacturers, wholesalers, retailers, and customers which forms the basis of supply chain must be carefully integrated. To depicts how efficiently resources and inventory are being utilized, the structural and infrastructural linkages in a supply chain such as human resource management, technology development, procurement and others shows the close relationships with it. (Beesley 1996)