On Jan. 19 Nike published a run-down of the changes it has made to its supply chain since mid-2020, when “consumers across all segments immediately shifted to digital engagement.” The company refers to this digital direct-to-consumer (DTC) operation as the “Sole Train” – no doubt a punning reference to Soul Train, a TV show for musical and dance performances that ran for about 35 years in the U.S.
Nike’s chief operating officer, Andrew Campion, says in the press release that Nike knew its “recovery and return to growth would neither be linear nor intuitive” and that “the immediate and significant shifts we were seeing in consumer engagement would be systemic.”
Until the winter of 2020, Nike was channeling its North American business through distribution centers in Memphis, Tennessee. The company is now transforming these into omni-channel hubs while adding network nodes outside of the cities of Los Angeles (for the west), Bethlehem, Pennsylvania (east), and Dallas (south). In Europe it is expanding beyond its long-standing hub in Belgium by establishing a regional node in Madrid. Each location, moreover, is connected with a computer platform intended to sense demand and project the necessary inventory. In all, according to Campion, Nike has tripled its capacity to serve digital customers in North America, Europe, the Middle East and Africa over the past two holiday seasons.
Nike is relying more and more on data collection and machine learning to generate sales and fulfill orders. It is implementing such services as Buy Online, Pick Up in Store (BOPIS), Ship to Store and Direct Order Drop. For energy savings, Nike is offering No Rush Shipping and, in the continental U.S., Ground-Only Shipping. The former affords more time for order preparation, while the latter burns less carbon than air freight.
Nike has deployed more than 1,000 “collaborative robots” (“cobots”) within the new distribution hubs to help Nike employees sort, pack and move products.
In addition, Nike is reducing the number of split packages and using pop-up cartons made of 65 percent recycled and 35 percent virgin materials. The “Nike Refurbished” program takes a second pass, by hand, at imperfectly manufactured sneakers for sale through certain Nike Factory, Nike Unite and Nike Community stores.
Finally, Nike is reviewing its Covid policy, which has included “sick leave and pay continuity for essential workers in manufacturing, distribution centers and retail stores” and now “extends to investments in career development, training and community volunteer opportunities.”
As we have just reported another aspect to Nike’s Covid policy. The company has reportedly begun to fire employees who do not meet the most recent vaccination criteria without receiving a medical or religious exemption.
