Nike Supply Agreement

Nike said the way independent retailers store goods “is no longer consistent with their distribution strategy,” adding that the termination of supply contracts could begin as early as next year – but will be fully completed by 2021. Today, Nike is taking an ambitious approach to managing the effects of its supply chain, which is as pioneering as the initial shift to 100% of outsourced production more than 30 years ago. In 2019, Nike purchased 93% of its products and materials from sustainably managed plants, reaching its 100% target by the end of 2020. It has also reduced the number of plants in its supply chain to less than 2.5%, which generates excessive overtime for their workers. ADEC ESG Solutions is a leading provider of ESG solutions, including industry expertise, software solutions and data management. Contact us to learn more about how we can work with you to design tailored solutions for your sustainable supply chain. As one of the most well-known brands in the world, the American multinational is probably the most influential player in the modern textile industry. The hundreds of millions of shoes and other products Nike sells each year hide a very complex supply chain. Their success has been attributed by many to the proactive approach to their supply chain management.

Nike stated that independent retailers` approach to storing goods no longer fits its distribution strategy. As a result, as reported, the company has warned many independent retailers that it will stop supplying them by 2021. Nike, one of the largest suppliers of sports shoes and apparel, is reportedly planning to terminate delivery contracts with independent retailers over the next two years. Nike`s supply chain operates on three organizational principles: outsourcing to reduce costs; Diversification to minimize risk and corporate social responsibility to manage their impact on the world in which they work. Under targeted and experienced management, its supply chain has moved from these principles to one of the most effective and accountable major international supply chains by 2020. Nike is reportedly planning to terminate its supply contracts with independent retailers over the next two years as it will focus on its direct consumer sector. But this distributed approach has its drawbacks. Acquiring components from so many different establishments is a real challenge for quality control. To ensure that high quality standards are met at every stage of production, Nike is in constant communication with its suppliers and supported by tools and training to launch suppliers in its Quality Management and Total Quality Management (MTQ) framework.