MANAGEMENT

INFORMATION
SYSTEM

THE CASE
Nike: i2 Just Didnt Do It!!

The Problem
The problem was a software made by i2, a software glitch that
cost Nike more than a $100 million in lost sales, depressed its
stock price by 20%, and triggered a flurry of lawsuits.
The main problem was that i2 demand-planning engine in 2000
spat out thousands of more Air Garnett sneakers than the market
had an appetite for and called for thousands fewer Air Jordans
than needed.
The i2 had a double blow: (1)the software problem was closed
tied to a core business process-in this case factory orders; and
(2)the glitch sends ripples through product delivery that grows
into a wave.
Nike says that the problem was tactical and therefore, fixable. All
this meaning it was too slow, didnt integrate with the system

Why i2 Just Didnt Do It?!?

i2 was installed in 1999, while it was still in its early
stages. i2s demand application and supply chain
stored data in different formats, making it difficult to
integrate the 2 applications. It was a necessity to
heavily customize so that it took as much as a
minute for a single entry to be recorded, and since it
was overwhelmed by 10s of millions of product
number, it would frequently crash.
These glitches were spilled over to factory orders
making it worse. It would ignore some orders while
duplicate others. It would delete orders after 6-8

Nike made a Plan and went for

the Rebound
According to Nike, i2 was never intended to be a game
changer. So, Nike made a bold and early move of creating a
single, giant, integrated database within its SAP ERP
system.
This way Nikes supply chain was supposed to drive the
manufacturing of a sneaker from 9mths to 6mths and 90%
of sneakers were made in advance of delivery. This
converted them from a made-to-sell company to a made-toorder company.

A Robust Business Case was

made

Nike learns Patience

Nike learned from its mistake, they did not rush the
SAP installation. They never considered abandoning
the whole i2 program for a single instance. Nike
wanted a staged, geographically based rollout of
SAP, but also wanted to avoid making each rollout
so specific to a region that it would require
specialized support.

QUESTIONS

Question 1
What characteristics about Nike contributed
to their troubles with i2 becoming nothing
more than a speedbump?

Question 2
Nike claims that their problems with i2 were tactical
but others suggest there was a strategic mistake as
well. Which do you think best describes the source
of problems? Could it have been both? Explain your
answer.

Question 3
Most companies install an ERP system to create a
common environment from which to forecast,
conduct and track business process and activities.
Wolfram however doesnt subscribe to this strategy.
Do you believe his departure from a common
practice was a good decision? Why or why not?

Question 4
Why is converting a supply chain from make-to-sell
to make-to-order such an important business
advantage? Discuss some benefits associated with
such objective. What are some of the challenges?

Answer
It is important because:
1. Specialization
2. No extra inventory
And, its a challenge because:
3. Low supply
4. Waiting time

Question 5
Can you identify one critical mistake made by Nike
that contributed to the initial problems with i2?
Explain.

Answer
1. The main mistake that Nike made was that they were
hasty. They implemented the software programme in
the 1999, when it was in its early stages. The
software was from a company named i2.
2. They had to customize the software in order to use it.
And that requires more money than the original
version.
3. i2s demand forecasting module uses completely
mathematical algorithms.
4. No pilot test was conducted to assess the feasibility

By:
Aanchal
Harneel
Pravesh
Varun