In early 2020, the world stopped moving because of the COVID-19 pandemic. Ships sat still, warehouses emptied, and factories locked up their gates. For Nike’s supply chain, an operation built on global movement, everything froze. What followed was not just another supply chain story; it was a wake-up call. The supply chain, once praised for its precision and speed, collapsed under pressure.
So what happened, and how can African supply chains avoid the same fate? This article breaks down the story and explains why efficiency without preparedness leads to loss.
Nike’s Supply Chain: A System Built for Speed, Not Shocks
Nike operated one of the most efficient logistics systems in global retail. Products were manufactured mostly in Vietnam, China, and Indonesia. It’s just-in-time model cut costs and kept stock lean. However, for this strategy to work, it relied on precise timing across thousands of suppliers, freight carriers, and warehouse operations.
The pandemic changed all that. When COVID-19 hit, this speed-focused machine broke. First, Vietnam, the source of over half of Nike’s footwear shut down factories for months. Production vanished. Then, shipping delays doubled transit times. Products that used to arrive in 40 days now take 80. Retailers waited. Consumers switched brands, and Nike lost sales.
Nike’s inventory ballooned to $7.4 billion by May 2020 because of a temporary dip in demand. Stores closed, and warehouses overflowed. Goods were in the wrong places at the wrong times. Nike had to stop ordering to manage the high stock. Although this initially proved successful, when demand surged again in 2021, Nike had nothing to sell.
This was not just a pandemic logistics issue it was a full-scale supply-demand mismatch. Nike’s supply chain tried to fix it. They rerouted orders to China and Indonesia, paid a premium for air freight, and used their RFID tracking system to redirect stock. The company also tried cutting its product mix to focus solely on bestsellers.
But it wasn’t enough. Shoes were missing from the shelves. The most loyal customers couldn’t find their size.
Read more: How Pep Stores’ supply chain built a cost-optimized operation
What Went Wrong With Nike’s Supply Chain?
Nike was forced to downgrade earnings projections. By late 2022, new stock finally arrived, but it was too late. Demand cooled. Inventories piled up again. They went from shortage to surplus in just one year. So what went wrong with Nike?
1. Supplier Dependency Issues
Nike’s supply chain tied its fate to Vietnam. And It worked, until factories in Ho Chi Minh and Hanoi went dark. No backups. No buffer. That’s not resilience. That’s risk. Nike’s supply chain operation lacked alternative factories with equal scale, training, and capacity.
2. Just-in-Time Failure in a Pandemic
Nike’s supply chain was lean. Too lean. It held little excess stock and moved inventory just in time. Although it is a great strategy, it only works when nothing goes wrong. COVID-19 broke that rhythm. A delay at one link had ripple effects powerful enough to shut down the whole chain.
3. Inventory Mismanagement During Crisis
Although you cannot really blame the move, in 2020, Nike overcorrected to the initial dip in demand. Fearing a sales crash, it canceled factory orders. When demand returned in 2021, Nike’s supply chain had no inventory. Orders restarted but production couldn’t match the surge.
When the delayed stock finally arrived, it was too late. Although the company shifted resources towards promotions to get demand flowing again, margins shrank.
4. Logistics Bottlenecks and Shipping Delays
The pandemic had ports around the globe choked with cargo. Container shortages and vessel backlogs made ocean freight unreliable. Now, Nike paid for air freight to meet the demand, but it was only for the top products. Others sat idle as stores remained half empty. Customers went elsewhere.
5. Operational Agility Failure
Nike’s supply chain had a heavy investment in technology, and it had access to data. But it still couldn’t pivot fast enough. It couldn’t reassign production at scale or switch to different shipping hubs quickly. It is clear evidence that the company’s operations were built for control, not for chaos.
6. Ethical and Supplier Relationship Missteps
Nike faced backlash for canceling factory orders and leaving workers unpaid. That eroded trust with suppliers. A broken supplier doesn’t restart smoothly. Goodwill matters in disruption recovery.
Lessons from Nike’s Supply Chain Disruption
Nike’s pandemic-era supply chain saga provides a cautionary tale and a learning opportunity for companies worldwide. Resilience in supply chains has become a top priority in the wake of COVID-19, and Nike’s experience encapsulates many do’s and don’ts.
Here are some key lessons:
1. Single Country or Supplier Dependency Destroys Continuity
When one country or supplier holds your production hostage, your entire business suffers. Every supply chain operating within Africa must map supplier risk. If 70% of your imports come from one country, it’s time to rethink your sourcing.
2. Lean Is Fragile During Shocks
Holding minimal inventory may look smart on spreadsheets, but it’s a gamble in real life. Safety stock must return as a strategy, even if it is at a minimal level, and it doesn’t have to be for all products. Just in the areas where delays cost the most, for example, essential items, high-demand products, and key customers.
3. Supply Chain Visibility Must Lead to Action
Nike used RFID tags to track goods only after the problems hit. That helped, but it wasn’t enough. Supply chain visibility must drive response. If a warehouse is filling too fast, shipments must pause. If delivery times double, orders must switch routes. Technology that doesn’t inform action is noise at the end of the day.
4. Ethical Supply Chains Recover Faster
Suppliers remember how they were treated in a crisis. Did the brand stand with them or drop them? African supply chains must treat partners as extensions of their business. A paid supplier delivers faster. A respected partner warns earlier.
5. Forecasting Needs Scenarios, Not Just Spreadsheets
Nike’s supply chain is forecasted based on historic demand. That failed. Future planning must include worst-case scenarios. What happens if your main port closes? Or the local currency drops by 50%? What if border delays stretch by 10 days? Plans should not be about perfection. They should protect against loss.
Read more: How TradeDepot digitized the distribution of FMCG products in Africa.
How African Supply Chains Can Avoid Nike’s Mistakes
African business owners and supply chains have their fair share of operational weaknesses, which include poor infrastructure, weak manufacturing bases, and over-reliance on imports. However, Nike’s supply chain failure offers a blueprint to navigate these weaknesses effectively.
1. Build Regional Redundancy
Don’t depend on one supplier, one route, or one country. Develop parallel suppliers across multiple regions. If your imports come only through Mombasa, try adding Durban or Tema. Look at building supplier relationships in Egypt, Morocco, or Ghana, not just China or India.
2. Keep Essential Stock Close to Market
Stock everything locally? Maybe not. But stock the critical 20%. Items your business cannot function without must sit within reach. This is especially helpful when there is a crisis, whether it is ports closing or trucks stalling because of traffic. When used strategically, local warehousing may cost more today, but it saves the business tomorrow.
3. Use Technology for Speed, Not Just Tracking
RFID tags, GPS tracking, warehouse dashboards, and any other tech solution at your supply chain’s disposal must be connected to action. If demand in Nairobi rises and stock in Lagos sits idle, tech should automatically trigger transfer or inform a team trained to move fast, and leave them to make the necessary decisions.
4. Train for Disruption Response
Crisis response is a muscle that can be developed. African businesses should simulate disruptions yearly. Close a warehouse in a mock drill. Lock down a key supplier in a test scenario. This way, management can teach teams how to think ahead of the crisis, not behind it.
5. Turn Procurement into a Risk Tool
Procurement shouldn’t just be about chasing price. It can be much more strategic than that. The people within the process must be able to evaluate suppliers on resilience and ask necessary questions. Do they hold emergency stock? Can they reroute shipments? Do they share production schedules?
If they do not have a positive response to any of these, then they are a liability. Ask hard questions before crisis strikes.
6. Invest in Africa as a Supplier Base
The current trade and tariff war is proof that global brands are looking to shift from Asia. Africa has the talent and raw materials. But it needs infrastructure, training, and policy support. African companies and governments can attract production contracts by solving quality and capacity gaps.
Read more: How Barilla’s supply chain optimized distribution across Europe and Africa.
Wrap Up
Nike’s supply chain was a machine of precision. But it wasn’t ready for the chaos of a global pandemic. The system failed because it prized efficiency over flexibility. When pressure came, speed turned into silence. There is nothing wrong with efficiency but flexible allows the supply chain to bend without breaking during periods of crisis.
African supply chain leaders and business owners must not follow this path. Resilience begins with choice. You choose to diversify, to hold strategic stock, or to train for failure. Nike’s supply chain failure should be studied. Not to blame, but to learn. Africa cannot afford the same mistakes. The next crisis will not wait. Let’s build supply chains ready to move, ready to bend, and ready to survive.
Obinabo Tochukwu Tabansi is a supply chain digital writer & ghostwriter helping professionals and business owners across Africa explore various strategies that work and learn from the success and failures of various supply chains across the globe. He also ghostwrites social content for logistics & supply chain businesses
