Nike Supply Chain

Nike has said that it has been facing a lot of problems with manufacturing in China, with suppliers giving falsified documents, under-age workers and unpaid wages topping the list. The sneakers and sportswear manufacturer, in what is believed to be its first country-specific supply chain report, has said that the company has been trying to get the Chinese suppliers to follow its code of conduct and Chinese law. It is reported that the company's difficulties are a reflection of the depth of some of the problems faced by manufacturing businesses in China, which reportedly is Nike's largest single sourcing country, with around 180 manufacturers and about 210,000 employees, at a time when prices are rising, and the legal environment is stiffening. The report, which was posted on Nike's website, said: 'As China continues to develop, we see progress and best practices emerging. But like our partners in any other country, the factories we contract with in China continue to face challenges as well.' According to the report, the company faced several labour-related problems, which included falsification of payroll records (details of age in particular), hiring practices and the absence of a proper grievance system for workers.

Source : Hopkin, P. (2018). Fundamentals of Risk Management: Understanding, Evaluating and Implementing Effective Risk Management. Kogan Page Publishers.

a. Evaluate risks for Nike by identifying THREE (3) operational risks based on the above article. (9 marks)

b. Justify THREE (3) appropriate risk response for each identified risk in Question 3 (a). (9 marks)