The High Cost of Poor Data Quality

by David Loshin

This past February, a war of words erupted between the shoe manufacturer Nike, Inc. and i2 Technologies, the software developer that provided Nike with a new demand-and-supply inventory system. According to Nike, during the deployment of the new system, some shoe orders were placed twice, once in the old and once in the new system, but the new system allowed some orders to "fall through the cracks." This resulted in overproduction of some models and underproduction of others. Nike was forced to make some shoes at the last minute and ship them via air to meet its deadlines, and the company blames this for a cut in sales of US $80 to $100 million during its third quarter, causing them to miss earnings estimates by as much as 13 cents per share. The day Nike announced this, its stock price fell from $49.17 to $38.80, a drop of 25% in value.¹ The senior management of i2 claimed that its software was not responsible for Nike's shortfalls.