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12 May 2012 | Adam Leach
Nike has reaped the benefits of moving to ‘lean’ manufacturing with shorter lead times and fewer product defects in its supply chain.
The sportswear brand’s FY10/11 Sustainable Business Performance Summary, explained by adopting a lean approach - which it described as ‘better manufacturing’ that reduced wasted materials and time - the company’s supply chain has operated more efficiently. The report explained the company had worked to eliminate waste, lost time and lost material from its processes as part of its sustainability agenda.
The report said contracted factories which adopted the lean approach showed defect rates 50 per cent lower than those that didn’t. It also revealed delivery lead times from lean factories were, on average, 40 per cent quicker. Productivity increases of 10 to 20 per cent and a reduction in the time taken to introduce a new model by 30 per cent were also reported from lean factories.
Mark Parker, CEO and President at Nike, said in a statement: “Sustainability at Nike means being laser-focused on evolving our business model to deliver profitable growth while leveraging the efficiencies of lean manufacturing, minimizing our environmental impact and using the tools available to us to bring about positive change across out entire supply chain.”
During the year, the company collaborated with a number of NGOs and fellow manufacturers on initiatives and projects relating to sustainability. This included working with the Fair Labor Association to create key performance indicators on labour and sustainable sourcing and launching the Sustainable Apparel Coalition with the US Environmental Protection Agency and other footwear brands, retailers and manufacturers.