Nike launching its new ERP system in a bid to increase inventory visibility and productivity
Nike will launch its new ERP system across its global network this year in a bid to increase inventory visibility and productivity, CFO Matthew Friend said during a June earnings call.
The system, which Friend described as the company’s “biggest investment in its digital transformation,” is set to go live in Greater China this month, while Nike prepares to deploy it in North America in fiscal year 2024.
The ERP system will be “foundational for increasing speed and agility across our supply chain” as Nike leans increasingly into direct-to-consumer sales, Friend said.
Nike’s ERP launch comes as the retailer continues to face elevated in-transit inventories and extended lead times to get products to market, issues that the new technology system could be instrumental in tackling.
Transit times remain at roughly two weeks longer than pre-pandemic levels and aren’t expected to improve significantly through the end of FY 2023, Friend said. As a result, the company is managing inventories to deal with the slower movement of goods, including adjusting product life cycles.
“We’re taking some of our styles to seasonless that we can manage it on more of a rolling basis,” Friend said. “And we’ll continue to leverage the experience that we’ve had over the last 2 years, navigating through this environment from a supply chain complexity and congestion perspective.”
In China, the extended transit times and factory closures have left Nike with bloated inventory reserves, with seasonal products arriving behind schedule. Friend noted that the retailer is “recalibrating” its supply and demand in the region in response to shifting market conditions.
Nike has been planning an ERP overhaul since 2020, part of a strategy to more effectively service online customers and unify financial and inventory views across the company’s ecosystem, Courtney Kissler, then-vice president at Nike Global Technology, said.
As part of the retailer’s acceleration of its direct-to-consumer strategy, Friend noted that the revamped digital system should help fuel profits in China.
“And our ERP is frankly the backbone that’s going to enable us to take advantage of those opportunities at a more significant way,” Friend said.
