Inventory Management



Nike being such a major, successful company, they have even had their fair shares in facing problems.  They had some major inventory management problems and had lost about a total of $100 million in sales.  As Nike, and many other companies have learned, inventory control can be a difficult thing to handle.

Due to this occurring, Nike was able to develop a much improved inventory management solution to solve all of their problems promptly:

In 2001, Nike updated their inventory management software which purpose was to help predict which products would sell the most which can therefore help the company prepare the correct amount of supply to meet their demand.  The company, like most other major companies, would first figure out a demand quota that they must meet and start manufacturing products.

To come to a number figure for a product’s demand, the company must look at data from historical sales of different products.  Based on market growth estimates, Nike, as well as other companies, would be able to forecast a demand number for different products.  This figure is next used to determine reorder points, optimal inventory levels, material lead times, etc.  The numbers produced by the inventory management software determines the entire manufacturing plan for months at a time.

However, in Nike’s condition, the software program had some major issues, such as: bugs and data error, which ended up in incorrect demand forecast.  The figures that were produced by this software were way under-determined, so that made the Nike Company make a shortage of certain products that consumers were very interested in buying.  On the other hand, they overproduced other products that consumers were not as interested in.  This resulted in a huge loss of sales that added up to the millions.

Nike’s situation shows other companies and the public how critical it is for a company to manage their inventory system, no matter how big or small their business is.  When choosing software or an inventory management solution, it is very important to check the quality of the software that their vendor is providing. It is also important for every business owner to double check their data, especially if they cannot endure an enormous loss in sales.

This article talks about the activity we did in class the other day.  The activity was called Past Demand for Big Game (cases per week.). In class, we had to estimate demands for that week and then make sure we did not under order or over order because then it was going to cost us a lot of money. That is what Nike had to do in this article; they under ordered their demand dramatically. This shows us that even big companies like Nike have trouble guessing their dammed for particular items.

Google Glass: For Men Only

As a guest OpEd for USA Today, writer Sarah Buhr raised an interesting point about Google Glass.  She noticed that even though the marketing videos show a diverse target group, the first wave of recipients were mainly males.  Google, however, had stated to ABC News that the glass was designed for all types of people around the world and that they hope that everyone will have the chance to enjoy this product.  Google also stated that they wanted to make the Glass next available to their #ifihadglass initiative which aims to bring a more diverse group of people into the Explorer program.  Although this next wave opens up the Glass to the public, the current wave of perspective participants consists of mainly men who have signed up at the Google I/O developer conference last year.  Facts are shown that the entrepreneurial world continues to have less women programmers and products developers when compared to men.  This is where Sarah Buhr asks her question on whether or not Google Glass is aimed just for men.

Some women, such as Elizabeth Ziegler Murphy from the OpEd marketing professional shyly stated that she would never wear the Google Glass because they are unattractive.  I believe that if Google is successful at launching this product, then they should make them in better frames so that more women will wear them.  The only thing that is helpful is that Google has given consumers the option of customizing their glasses.

Google is surprisingly making their own glasses which have many functions. This is a really big step for Google if they are able to successfully accomplish this product.  Google would be the first company to create smart glasses.  However, the more I read about their product, the less interested I become in them.  First of all, I would have to agree with Elizabeth that they do not look good.  Also, they would need a lot of time to get use to since there is a giant frame on a person’s face.  I personally think that Google is going to have a difficult time in getting this product out by the end of this year as they plan.  The process of getting the customer’s glasses fitted for them is like paper puppet activity that we had done in class.  When the consumer sends the glasses in to be customized to fit their face, it will take a very long time for them to get their glasses back.  They buy the product, but then must get them customized, which they will have to send in and wait for the company to fix them and ship the glasses back to the customer’s house.  This has the potential for the product to get backed up due to the process taking so long.  This product is a magnificent idea, but I do not believe that they are going to last in the market for long.  It may take Google a couple more years to get his product perfected and out on the market permanently. Do you all believe that Google target the Glass towards men and what do you all think will happen for this product?