Lean In Nike – NOS (Nike Operation System) #2

In 1998, Manufacturing R & D team was looking for a change in manufacturing approach. At that time, lots of companies were adopting ‘Lean’ and ‘6 sigma’ as business transformation methodology. After researching which way to go, Nike finally decided to go with Lean for footwear operation transformation.

In the mean time, one of Nike footwear company started their lean journey with their own. Whanil Jeong, CEO of Changshin Group, sent his leadership and middle managers (about 300) to Nagoya for a week course of TPS training in 1998. Lot of improvement ideas were proposed and implemented after the training. He shared his lean journey with Nike leadership from time to time.

One of the biggest improvement was on reducing lead-time from material warehouse to finished goods warehouse. Lead time was about 20 days with lots of raw materials sitting in the warehouse. With lot of improvement efforts, their Vietnam factory (VJ) reduced 8 days and the lead-time became 12 days. As a result, they saved more than $100 million dollars in 2001.

In 2001, a group of people from Nike, lean pioneers, attended a lean seminar at Kentucky university hosted by TSD consulting company. (TSD is a lean consulting company consisted with ex-Toyota employees and other lean consultants) After attending the seminar, they secretly started to assess lead-time of Nike factories in Vietnam to decide where they build NITC (Nike Innovation & Training Center). Then VJ (Changshin Vietnam) was selected as a location for NITC.

Group of people from Nike Mfg R&D, TSD consultants and wave #0 candidates gathered together to open a totally new era of footwear manufacturing. They designed a whole new layout with putting cutting, stitching, stockfitting and assembly in the same building. Nobody from footwear industry ever imagined this was possible. Even material warehouse and prefit processes like high frequency, screening, embroidery were in the same building in order to eliminate unnecessary transportation. Based on this blue print, Plant A was constructed on 2001 inside VJ. On top of it was historic NITC (It was called NLC in the beginning).

Organization was also changed with the name which they never heard before – Value stream manager who is responsible for whole value stream to manufacture footwear from cutting, stitching, stockfitting and assembly. People felt great difficulties because they have been working as functional organization and they didn’t know other processes. But managers were trained and coached by consultant on their new roles and responsibilities. And they became accustomed to the new way of working as a value stream.

— Shared by DJ Kim (Source: LinkedIn)