I had the opportunity to accompany a group of executives from Anheuser Busch Inbev on a tour of Nike’s global distribution facility in Leuven Belgium this week. Shipments arrive from Nike’s network of global manufacturers in Asia, including footwear, apparel and equipment. Containers arrive at the port of Antwerp, and are transported by truck to a nearby inland terminal (BCTN) next door to Nike.
Shipments may also arrive by barge via the canal from Antwerp, and we also had the opportunity to see how these containers were being unloaded by BCTN into the terminal. This terminal receives about 5000 containers a day, of which about 50 are for Nike. In turn, these containers sit for about 5 days before being transported to the Nike distribution center next door and stocked inside the DC. The DC serves as the hub for Nike’s global e-commerce business, and orders taken from Nike.com are shipped to consumers all over the world from this DC, including North America.
The choice of Leuven, Belgium as the site for Nike’s DC may seem like an odd one. The decision to centralize Nike’s distribution network was made back in 1992, and was launched by the Maastricht Treaty that launched the beginning of the European Union. At that time Nike had 32 DCs located all over Europe, designed to accommodate the tax structures and limitations of the complexity of this region. The formation of the EU created a single economy that launched an analysis into the right distribution model.
A distribution scenario planning ensued that involved understanding the total cost and mix of products. Numerous scenarios were run, and it was found that a centralized model significantly reduced warehouse and inventory costs, while only marginally increasing total transportation costs, leading to a significant overall savings. The ability to consolidate split shipments to 32 DC’s into single shipments into a single DC resulted in a significantly improved scenario.
The choice of Leuven as the logistics campus was made for several reasons. The location has access to great ports, including Rotterdam, Antwerp, and Zeebrugge, as well as access to other European DC’s and the Benelux rail terminals. The canal runs immediately past the campus, and provides barge access. I also noticed that unloading was being carried out using a Hyster-Yale machine, (another one of our SCRC partners, shown below).
Barges proceed down the canal from Antwerp. Our tour guide informed us that barges are limited to having two containers high due to the depth of the canal and the bridges. However the government of Belgium is scheduled to raise the 20 bridges along the canal to enable an increase to 4 containers high on barges, which will effectively double the volume of this campus!
The Nike campus is used for distribution to Russia, Saudi Arabia, as well as samples for sales reps, business promotions, and returns are all processed at the facility. The DC ships 220M units annually, with a total of 213,000 inline SKU’s. They ship in quantities from 1 to 1000 units, and are continuously improving their performance. A really impressive operation!