Integration, Incentives and Innovation Nike’s Strategy to Improve Social and Environmental Conditions in its Global Supply Chain

Nike’s approach to managing supplier responsibility has greatly evolved since the 1990s, when the media uncovered claims of child labor, underpaid workers, and poor working conditions in several Asian countries. This report explores how Nike’s approach to improving social and environmental conditions in its global supply chain has evolved through integrated management of sustainability and innovation, increased supplier incentives, and systems innovations intended to prevent problems before they arise. The article focuses in part on a new system of rating suppliers called the Manufacturing Index, which gives sustainability equal weighting alongside the traditional supply chain measures of quality, cost, and delivery. Also discussed is Nike’s pipeline for innovative manufacturing and sourcing projects that have the potential to extend the company’s sustainability model beyond compliance, to one that builds social, environmental, and economic value.