How Nike Does Lean

How Nike does Lean

How Nike Does Lean

How Nike does Lean
How Nike does Lean

NIKE, Inc. is one of the premiere shoe manufacturers in the world. Its famous "swoosh" is worn by the greatest names in sports – from Michael Jordan to Lebron James, Kevin Durant to Tiger Woods and Maria Sharapova. There’s no doubt that NIKE, Inc. is a powerhouse when it comes to promotion; but did you know the company also leads the way in lean manufacturing best practices?

Due to an inheritance of immature management teams in emerging manufacturing markets, NIKE, Inc. has implemented a culture of empowerment that employs continuous improvement (CI) to deliver high-quality products, on time, at a low cost.

 

NIKE, Inc.'s Culture of Empowerment Model

NIKE, Inc.'s culture of empowerment model is three-pronged: attract, develop, and empower. Most importantly, the people of NIKE, Inc. are seen as its ultimate value stream. This model is not unique to NIKE, Inc.; it originated at Toyota and has been adapted at a multitude of companies striving for lean manufacturing and continuous improvement.

"Our work with manufacturers to promote lean manufacturing is part of our fundamental shift away from monitoring and toward building manufacturing capacity for self-management. We believe this will ultimately be a more successful and sustainable approach to stimulating systemic change and improving the lives of workers." – NikeBiz

Human Resource Management (HRM) is an important tool for lean manufacturing at NIKE, Inc. By surveying workers for insight into key issues and seeking out opportunities for positive change, NIKE, Inc. is utilizing continuous improvement best practices to become a leader in lean manufacturing practices.

According to an article in Industry Week, most organizations succeed at establishing some form of standardized CI. "The big differences shows up in how projects and initiatives are linked to strategy, competence development and auditing activities within organizations."

In the same article, Industry Week provided three types of standardized CI:

  • Quality award programs: useful for providing a set of criteria and motivating employees for CI; focused on project-based quality.
  • Institute improvement programs: training focused on lean and Six Sigma to provide employees with the skills they need to integrate continuous improvement.
  • External benchmarking programs: provide an objective comparison for identifying improvement opportunities, pinpointing internal best practices, and establishing a performance-focused culture.

 

NIKE, Inc.'s Scoring Card

"No other capacity-building program in our industry integrates HR and support of lean manufacturing in this way, addressing both the needs of the factories and workers, as well as the business. This is a new standard of factory self-governance." - NikeBiz

NIKE, Inc. has more than 1 million workers manufacturing 500,000 different products around the world.To ensure everyone is performing at NIKE, Inc.'s standards, the company has developed a scoring system for their contract factories. The Manufacturing Index (MI) they utilize scores each factory in terms of lean, labor, health and safety, energy and carbon, and sustainability. This allows NIKE, Inc. to determine where they need to spend more attention and resources and where they can allow factories to operate autonomously. It also incentivizes factories to raise the bar in all areas of their manufacturing. NIKE, Inc. requires partners below the bronze level to pay for 3rd party audits. Partners above the bronze level are rewarded with audits paid by NIKE, Inc.

There’s no doubt; NIKE, Inc. is creative and strategic in developing lean manufacturing techniques. They utilize traditions, such as the culture of empowerment model, but they have also revolutionized how they interact with their global partners. These methods are what make NIKE, Inc. a company worth taking note.

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