FACULTY BUSINESS AND MANAGEMENT

BACHELOR OF BUSINESS ADMINISTARTION (HONS.) FINANCE

INTRODUCTION TO OPERATIONS MANAGEMENT

(OPM530)

INDIVIDUAL ASSIGNMENT 2

(ARTICLE REVIEW)

PREPARED BY:

MUHAMAD IZZAT NIEZAR BIN AHMAD TAJUDIN (2020834806)

CLASS : D2BA2422B

PREPARED FOR:

DR. CHE MOHD SYAHARUDDIN BIN CHE COB

SUBMISSION DATE:

27 MAY 2021
Contents
ACKNOWLEDGEMENT ..................................................................................................................... 3
1. INTRODUCTION .......................................................................................................................... 4
3. FINDINGS ..................................................................................................................................... 4
4. RECOMMENDATION.................................................................................................................. 5
5. CONCLUSION .............................................................................................................................. 5
ACKNOWLEDGEMENT

I would like to express our gratitude to everyone involved in helping us complete this task.
First of all, I really appreciate all the support, guidance, consultation and knowledge of our
Lecturer, DR. CHE MOHD SYAHARUDDIN BIN CHE COB has provided. Without his
encouragement, I may not be able to complete this assignment and overcome all the
obstacles.

In addition, I would to thanks those of our friend who helped us and giving some ideas to us
in order this Introduction to operations management (OPM530) coursework. Besides, I also
grateful to our friend who kindly guide I by giving some suggestion and knowledge to do this
coursework.

Last but not least, I wish to express our thanks to members and lecturers who help me to
complete this assignment and I gain a lot of new knowledge after finishing this assignment
ARTICLE CRITIQUE – INVENTORY MANAGEMENT OF NIKE INC.

1. INTRODUCTION

Operations management is an important business function on both academic and corporate

world. Operations is affected with the transformations of inputs into outputs, and shows how
this transformational process is set on the efficiency and profitability of a company. Inventory
management is the ability of maintaining operation management that minimizes inventory
costs while maximizing its effectiveness and efficiency. Inventory management is important to
every business because it helps to sort out items in proper quantity, avoid excess or shortage
of stocks that needed in order to perform in maximum production. Most of the big firms have
developed two major methods for inventory management that is just-in-time (JIT) method and
materials requirement planning (MRP) method.

For this article critique, I have chosen the Nike Inc company to review about their Inventory
management as their company had faced these problems before and how they overcome it
as it involved the global supply chain. Nike is an iconic footwear and apparel manufacturer
that operates in many countries all over the world.

2. MAIN POINT

This review fully focused on inventory management problem faced by Nike and based on the
article that I have read, the article is sharing about the troubles which give Nike Inc big impact
on loss. From the article, the authors says that mismanagement between Nike and software
company in implement new supply chain management and customer relations management
are the reason why the suffer big loss. The supply and demand do not hit accurately as what
the customer wants and also their objective cannot be achieve as they wanted to reduce cost
and quantity of materials used. The system designed is not set up according to the purpose
and both companies that involved was blaming each other for their mistakes.

3. FINDINGS

Big companies these days are mostly focusing on their inventory management as it ease the
process between all the parties that cooperate on the work. The company should have
accurate order fulfillment so that they can sort out in appropriate ways and not having any
stocks problems. Other than that, better inventory planning and ordering. Big companies must
order in accurate quantity so that there is no excess or shortage in stocks. Based on the article,
fall of Nike starts as after the new IT project which resulting in reduction of Nike profits by 24%
in 2001. The main reason was because failure in the software of the supply chain that Nike
had implemented. i2 Technologies Inc, company that produce the software at cost of $400
million, did not manage to fully control the demand. And as a result, Nike company produce
large numbers in less popular shoe models and small numbers of most popular shoe models.
The company also lose its population as their sales decrease. The software initially helps Nike
to match its supply with demanding by mapping out the manufacturing of specific products. By
doing this, Nike can reduce cost and quantity of the material and make it more affordable.

4. RECOMMENDATION

Based on the article, we suggest that Nike can use of different accurate algorithms and
forecasting models as it can give a proper solution for inventory management problems.
Efficient workers can manage the software so that they know what the customers demand and
can supply effectively. Other than that, Nike can ask consumer what are their needs by taking
survey and produce according it. By doing this kind of survey, popular shoe models can be
produced in large quantity and it will produce sales and for the less popular models, they can
reduce the production. Nike also should keep on checking the progress so that they will stay
on market and other competitors does not have any advantages.

5. CONCLUSION

I2 and Nike are one of the examples that we can see what happens when big companies
having a mismanagement. It can reduce sales and also the reputation of the company. They
should realize that the goals that was set up should be realistic and can be achieve. New
technique that appropriates to inventory management are more idealistic and efficient as it
helps the Nike company to manage the production of products that can give maximize benefits
towards the company.
REFERENCES

• (Pooja, n.d.)

• Valero, Paula, Naomi Gollogly, and Mark Curran. n.d. ―Enhancement of ISO 14001
and the Integration of Sustainability into the Footwear Supply Chain at Nike Inc.‖ In
ISO 14001: Case Studies and Practical Experiences, 331–41.

• Stanford University. Applied Mathematics and Statistics Laboratory, and Matthew

Jacob Sobel. 1967. Production Smoothing with Stochastic Demand and Related
Inventory Problems.

• Ross, David Frederick. 1998. ―Supply Chain Inventory Management.‖ In Competing

Through Supply Chain Management, 193–246

• Wild, Tony. n.d. ”Supply Chain Inventory Management.” In Best Practice in Inventory
Management, 217–37.
 FACULTY OF BUSINESS AND MANAGEMENT
ASSIGNMENT/ PROJECT DECLARATION FORM

Student’s Name : MUHAMAD IZZAT NIEZAR BIN AHMAD TAJUDIN

Student’s ID : 2020834806 Student’s I/C No. : 011014080069

Program Code : BA242 Part : 2 Course Code : OPM530

Course : INTRODUCTION TO OPERATION MANAGEMENTS

Name

Assignment/ Due Submission

Project No. : 2 Date : 27/5/2021 Date : 27/5/2021

Assignment/ : ARTICLE REVIEW

Project Title

Lecturer’s Name : DR CHE MOHD SYAHARUDDIN CHE COB

I hereby declare that the work in this assignment/ project was carried out in accordance with the
regulations of Universiti Teknologi MARA. It is original and is the results of my own work, unless
otherwise indicated or acknowledged as referenced work. This assignment/ project has not been
submitted to any other academic institution or non-academic institution for any degree or qualification.

I acknowledge that I have been supplied with the Academic Rules and Regulations for Universiti
Teknologi MARA’s Diploma/ Bachelor Degree/ Master’s Degree students, regulating the conduct of my
study and exams.

I hereby declare that this assignment/ project is written by me and:

i. is a result of my own work;
ii. has not been used for another assessment at another department/ university/ university college in
Malaysia or another country;
iii. does not refer to/quote works of others or own previous writings without stating it both in the text
and in the reference list;
iv. mentions explicitly all sources of information in the reference list; and
v. will go through similarity check (Turnitin).

I am aware that disciplinary action (which may include the deduction of marks in the assignment/
project) will be taken against me if I am found to be an offender.

27/5/2021 IZZAT

Date Student’s Signature