B O R D E R L E S S A M B I T I O N , I N S P I R A T I O N A N D I D E A SSC M SUPPLY CHAIN MOVEMENT Steve Hochman, Head Supply Chain Planning EMEA Nike The Rise of Social Supply Networks Social media in the supply chain Supply Chain Map Europe Napoleon in Russia Supply Chain Agenda of Comifar Mindmap European operations footprint “Profitably available is how you win” S O C I A L S U P P L Y N E T W O R K S www.supplychainmovement.com No. 4 | Q4 2012 group SC M SUPPLY CHAIN MOVEMENT Nike: A relentless, sustainable stream of performance innovation “We’re an almost invisible force that makes it happen.” Profile P h o t o g r a p h y : T o n Z o n n e v e l d Nike, the world’s leading designer, marketer and seller of athletic footwear, apparel, equipment, accessories and services, sets the bar as high as the sporting superstars who endorse its products. With the likes of Ronaldo, Iniesta, Rooney and Torres, adorning the European head office walls in Hilversum, the Netherlands, you can’t help but be inspired and energised. The campus radiates sport, fitness and well being, enhanced by the full size athletic track and other sporting facilities for the more than 1500 people who work here. By Helen Armstrong and Edwin Tuyn Steve Hochman currently lives in Amsterdam with his family. Education: MBA, General Management from Stanford University Graduate School of Business (1993 – 1995) A.B. Earth Sciences, Dartmouth College. (1985 – 1988) Career to date: Oct 2011 to present Head of Planning, EMEA, Nike 2008 –2011 Global Director, Supply Chain Strategy,Nike 2006 –2008 Director, Supply Chain Strategies, AMR Research, Inc. 2003 –2006 Manager (senior director), U.S. Sales Operations New Balance Athletic Shoe, Inc. 2001 –2003 EVP Marketing and Business Development SupplyChainge, Inc. 1999 – 2001 Founder, lucy activewear 1998 –2001 EVP, co-founder Lucy.com 1995 –1998 Senior Product Marketing Engineer Intel Corporation S U P P L Y C H A I N M O V E M E N T , N o . 4 , Q 4 2 0 1 2 8 S U P P L Y C H A I N M O V E M E N T , N o . 4 , Q 4 2 0 1 2 9 IKE, Inc. was founded in 1964 on the handshake of ath- letics coach Bill Bowerman and student Philip Knight who together distributed Tiger running shoes. The company was first called Blue Ribbon Sports. In 1972, it was renamed Nike after the Greek goddess for victory. Today Nike is a more than $24 billion dollar global company, employing approximately 44,000 people worldwide, with the pledge to bring inspiration and innovation to athletes (read everyone) everywhere. Its commitment to innovation is what makes it distinct. Steve Hochman is responsible for the NIKE Brand’s supply chain planning in Europe. His team is respon- sible for making sure the right product is in the right place at the right time. What’s your function in the organisation? I lead the NIKE Brand supply chain planning for all of Europe The NIKE Brand has six geographies, Western Europe, Cen- tral & Eastern Europe, Japan, Greater China, North America and Emerging Markets. My role covers demand planning (forecasting) and buying inventory up to the point of an order being placed and flowing into distribution centre - where fulfilment takes over. A cen- tral organisation in HQ in Beaverton, USA, is constantly liais- ing with our factory partners all over the world. Our teams have a working global rhythm that allows us to adapt dynami- cally to demand changes and align capacities in the factories with consumer needs across many thousands of SKUs per season. I have about 100 people within my extended team - comprising 38 nationalities. We have one large European dis- tribution centre, in Laakdal Belgium, supported by two satel- lite DCs in Russia and Turkey to serve Eastern and Central Europe. How do you manage those thousands of SKUs? Across the company, we bring our assortments together into the NIKE Brand’s key categories, which include football, women’s training, athletic training, sportswear, basketball and running. From sales to merchandising, product develop- ment to finance -everyone is category focused because that is how our consumer shops. The general managers are the hub of these category organizations, and the supply chain serves all these categories. If you are head of football for example, you have a virtual team, and a representative from the sup- ply chain is in the team. Someone from my demand planning team will sit in the staff meeting of GM football Europe to enable aligned accurate forecasts and smart buys. N Steve Hochman, Head of Planning EMEA, Nike: “From a supply chain perspective, it’s about finding the best balance between responsiveness and efficiency.” 10 S U P P L Y C H A I N M O V E M E N T , N o . 4 , Q 4 2 0 1 2 “We know we’re at our best when all parties are moving in synch with the pattern of consumption.” pens just as much in the channel of distribution as with the product. We treat e-commerce as one of our top priorities. Will Nike’s strategic partnership with software design company LLamasoft, Inc., alter the way you do business? We use a range of support tools to help us analyse our supply chain to optimise our supply and demand across distribution centres and manufacturing facilities. Our minority investment in Llamasoft is just one way we are improving our agility and precision and broadening the team’s capabilities. The benefits of the relationship are primarily strategic: It provides us with access to technology, the ability to co-develop innovative solu- tions, and potentially significantly reduce our supply chain’s car- bon footprint. How do you align the supply chain with Nike’s corporate respon- sibility? Hannah Jones, Nike’s Vice-President of Sustainable Business & Innovation, and Hans van Alebeek vice-president global opera- tions & technology, are constantly working on this alignment. We have taken on the tough issues and have invested in new ways to make products and share our learnings. We are work- ing with others in our industry to bring about change. In fact, the team that manages this work is now called Sustainable Busi- ness & Innovation instead of Corporate Responsibility. The teams have dual reporting lines directly into all core business functions, because we believe innovation with sustainability as a core criteria, will really help drive the company’s growth for- ward. A good example of this alignment and business integration of sustainability practices is our European distribution centre in Laakdal, Belgium. Windmills on site reduce our energy impact and it’s an approach we’re exploring for other distribution cen- tres too. How do you ensure that your corporate responsibility mission is watertight? We voluntarily set and report against public targets in exter- nal impact areas – energy, water, waste, chemistry and labour. These targets are owned by the whole business, rather than the Sustainable Business & Innovation function, so it is everyone’s responsibility to drive continuous improvement against those targets. We also recently rolled out our Sustainable Manufactur- ing & Sourcing Index as a new way to measure the performance of our 900+ contract factories. It adds sustainability perfor- mance to the traditional measures of cost, quality and delivery. What challenges does Nike face at the moment? Nike faces similar changes to other brands in terms of navigat- ing the global economic challenges and input costs for example. But Nike is a growth company and we feel confident about our potential. How does Nike differentiate itself from the competitors? We talk at Nike about bringing a “relentless, sustainable stream of performance innovation” to market. Being able to introduce this much innovation and inspiration to the consumer – and do it responsively and efficiently – this is what sets us apart. We master complexity. How does the supply chain support this stream of innovation? Think of the supply chain function as the ‘glue’ that connects every node in the value chain – assuring synchronicity and agil- ity. To bring such exceptional quantity of innovation to consum- ers, we carefully choreograph an integrated cross functional response, tailored to the evolving needs of the consumer and our own innovation drumbeat. Our ability at Nike to manage complexity and connect with the consumer this way is difficult to replicate. Launching the right product at the right time and right place – when and where the consumer shops - is a major differentiator. We know we’re at our best when all parties are moving in synch with the pat- tern of consumption. Our supply chain teams are a present but almost invisible force that makes it happen. For those thinking of supply chain careers, sometimes from the outside it looks like a paradox because of course people need to receive rec- ognition for what they do. But day-to-day, not being noticed is sometimes the best achievement. It’s a key indicator that we’re frictionless – smooth, responsive and efficient, flowing. If we flow, our consumer wins, and we celebrate. Fortunately, supply chain is ever more a known pillar of company strategy, and sup- ply chain career opportunity at Nike reflects this. With your portfolio changing every season would you not be bet- ter off manufacturing closer to the market? The NIKE Brand works with more than 900 contract factories suppliers most of which are in Asia. However, we are constantly evaluating this mix as we assess how we can serve consumers faster and more effectively. We optimise our portfolio of manu- facturing centres so that the entire supply chain is lined up to deliver on that promise. The behaviour of the customer is changing so is it not becom- ing more difficult to use historical data for forecasting, especially when launching new products? We are a product innovation company. The consumer votes on that innovation with his or her wallet. Our product line spans multiple categories and price points. We meet customer needs and grow the marketplace by optimizing our product portfolio and building compelling retail locations and experiences in our Nike-owned retail stores and with our wholesale retail partners. How big a role does e-commerce play? E-commerce is a key part of our Direct to Consumer business model and we are seeing strong growth here. Innovation hap- 11 S U P P L Y C H A I N M O V E M E N T , N o . 4 , Q 4 2 0 1 2 What do you find the most challenging part of your job? From a supply chain perspective, it’s about finding the best bal- ance between responsiveness and efficiency. We are developing planning and fulfilment capabilities toward that end, all the way up and down the chain. But the most important focus is our people. To keep winning the way we do, we need to continue to recruit the best talent, develop and inspire our teams, and sus- tain our strong culture of innovation and continuous improve- ment. People development is one of the things we do extremely well as a company, and a differentiator in its own right. It is also a race with no finish line. How important is it for a supply chain professional to have entre- preneurial spirit? Very! Entrepreneurship is about problem solving and opportu- nity creation. You need the entrepreneur’s creative mindset in the supply chain given its complexity, multidisciplinary require- ment and need for cross functional thinking. I don’t see the supply chain as an operational discipline; I see it as a way to grow companies. If you approach supply chain not just from “I don’t see the supply chain as an operational discipline; I see it as a way to grow companies.” operational metrics but also from financial and sustainability metrics you’ll be more successful within an organisation. You’ve been assigned this position for three years. What’s next? The Netherlands is a great place to be and I’m very passionate about Nike because the company spends a lot of energy making sure we have one culture and one set of beliefs – all based on shared experiences. This includes cross-functional rotation up and down the chain. I’ve got two more years here and I don’t yet know what my next step will be. My focus is very much on today’s opportunities and today’s team. My ambition is to con- tribute steadily more and more broadly to the growth of Nike and the athlete experience. In the meantime, I’m delighted to be a part of the team I’m in. I love working in Nike’s supply chain organisation. The company, the team, the mission. These all fit me perfectly. I’m privileged to be a part of it. Beyond the match in supply chain Professionals require passion Executive Search | Interim Management | Recruitment | Executive Coaching LOGISTICS AND SUPPLY CHAIN PROFESSIONALS www.Inspired-Search.com adv_tango_295x225mm.indd 1 26-04-12 14:23 12 S U P P L Y C H A I N M O V E M E N T , N o . 4 , Q 4 2 0 1 2 Beyond the match in supply chain Professionals require passion Executive Search | Interim Management | Recruitment | Executive Coaching LOGISTICS AND SUPPLY CHAIN PROFESSIONALS www.Inspired-Search.com adv_tango_295x225mm.indd 1 26-04-12 14:23 Enjoy Supply Chain Movement on your iPad Download the Supply Chain app to enjoy your first digital issue of the magazine on the iPad. 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