The folks at NIKE have the lean spin down pat. I am sure some consultant somewhere has done well thoroughly indoctrinating them in the whole lean spiel. the problem is that, when you have a fundamentally flawed model to begin with, streamlining those processes with lean is inherently a waste of time.
You can read Nike waxing eloquently about empowering their workforce and engaging everyone in continuous improvement. It is right out of the lean handbook. And it is easy to be impressed with their lean rhetoric.
All they have done is drenched perhaps the second ugliest manufacturing pig in the world (even they cannot reach the bottom of the manufacturing sewer Apple owns) with a lot of very exotic perfume. No company is more obsessed with the pursuit of cheap labor than Nike, and it is hard to imagine anyone wastes more money doing it. They are very profitable to be sure, but they leave an incredible amount of money on the table.
"Virtually all of our footwear is produced by factories we contract with outside of the United States. In fiscal 2010, contract factories in Vietnam, China, Indonesia, Thailand, and India manufactured approximately 37%, 34%, 23%, 2%, and 1% of total NIKE Brand footwear respectively." They especially love Vietnam where the minimum wage is about 50 cents an hour. A primary focus of their lean strategy is the "elimination of lost time" – at four bucks a day they can't afford any slacking. According to NIKE, paying more than minimum wage is problematic, as well:
"Among the factors affecting the wage debate are the competing concerns of various constituents. Shareholders want to see strong returns on their investments. Consumers want products at competitive prices. Manufacturers need to earn a profit to sustain their business and grow. Governments want to attract and retain investment in order to fuel growth, jobs and revenue. Most important, workers want to earn wages that meet their basic needs and enable their families to take advantage of growing educational and economic opportunities." All of these stakeholders think paying folks a dime more than their mandated 50 cents would make or break the deal, huh?
I don't care what NIKE pays people. What I scratch my head at is the insanity of carrying $2 billion plus in inventory – turning 5 times a year – and that is the NIKE inventory, not counting all of the inventory sitting in retailers warehouses and on their shelves. I can't reconcile a lean strategy to improve quality that is targeted at factories in wretched corners of the globe (and NIKE knows full well how wretched they are which is why they boast of having no more than 5-7% of their production with any one contractor in order to mitigate the enormous company and country risk inherent in their business model). It is fundamentally impossible to achieve excellent quality with a process that entails a three month cycle time between creating defects in factories and having end customers find them. That process can only be minimally controlled through the waste of inspection.
I can't wrap my mind around a business model that pours enormous sums of money into information systems to manage 10,000 mile long supply chains encompassing 600 contract factories spead out among every backwater place on the globe, deploying armies of inspectors to try to minimize the sweatshop-type abuses that have plagued NIKE - and sees people wasting 50 cent an hour time as the biggest opportunity to eliminate waste.
Who cares about NIKE? Certainly not me. The moral of the story is that applying lean to a basically dumb business model defeats the purpose of lean. The business has to built on a foundation of common economic sense first, then the processes should be optimized. Walking past buildings full of massive computers and bursting with billions of dollars in inventory to apply lean to the pocket change labor cost in Ho Chi Minh City represents a waste of perfectly good lean knowledge and expertise.