Design of a dynamic Demand & Supply match system at Nike
Nike is a worldwide operating manufacturer and distributer of sports ware working on an overall strategy to transform the marketplace in order to increase the customer experience and become the brand of choise when the customer decides to buy. This strategy requires a differentiated strategy regarding the matching of supply and demand from different customers and different areas. This process is called the Demand & Supply Match (DSM), which main objective is to assure the optimal use of Nike inventory taking into account performance parameters such as time delivery, order coverage and service level.
In the Industrial Engineering design project, a tool was developed to incorporate early market information and differentiated contract terms in the process of allocating over time the available pipe line inventory to demand, meanwhile enhancing inventory flexibility. In the project, three variants of the tool were developed and tested.
The test revealed that substantial improvements could be obtained with using the tool, with different variants of the tool used in different phases of the season, and improvements being dependent on the quality of the market information.