In 2000, Nike lost an estimated $100 million due to issues with its ERP implementation. Nike had spent $400 million to upgrade its ERP system for fulfillment of its warehouse orders, but there were issues with the newly installed I2 supply and demand software planning system. This resulted in the output and production of “Air Garnett” sneakers, than were needed. Rather than help increase the efficiency of matching the supply of sneakers with its demand, the new software glitch ended up producing more of the lower demand “Air Garnett” sneakers instead of the incredibly popular and in demand Air Jordan sneakers. The issue was as a result of tying to implement the new I2 software with existing legacy software. This also resulted in a 20% dip in their stock price of Nike at the time.
This failure of Nike in 2000 is key in expressing the importance of properly planning and understanding the business processes for which an ERP system is implanted in. In this case, it applies for companies, like Nike that have very unique supply chain processes, and also need to thoroughly plan these strategies, as being able to predict and properly understand supply and demand planning is crucial because the demand for different shoes and products can shift dramatically based on market requirements and demands.
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