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Why do we worry?

Examples of failure and costs. Why do we worry?. Andy Chen Nike. WHEN THINGS GO WRONG …. and they will. FACT: Every company in our industry has or will have an RSL related failure. FACT: Failures will disrupt business. FACT: Failures will damage your brand image.

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Why do we worry?

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  1. Examples of failure and costs Why do we worry? Andy Chen Nike

  2. WHEN THINGS GO WRONG ….and they will FACT: Every company in our industry has or will have an RSL related failure. FACT:Failures will disrupt business. FACT:Failures will damage your brand image. FACT:Failures will be expensive.

  3. EVERYONE WATCHES • Chemical issues are a focus of: • Governments • Legislation (REACH) • NGOs • Consumers We are all concerned. We are all targets. We are all responsible.

  4. JERSEY - TBT • Issue: • TBT (traces) found in a Borussia Dortmund jersey • Total unknown substance to Nike/apparel industry • Solution: • Scramble for chem and tox info • Prompted RSL development • No recall • Cost: • ~$4.8M (USD) • Bad public perception TBT

  5. CAPS - Formaldehyde • Issue: • Formaldehyde used to give cap shape • Solution: • Some materials washed • Some materials replaced • Led to phase out of formaldehyde in contract factories • Cost: • ~$1.2M (USD) • Unable to ship some product for several months Formaldehyde

  6. CADMIUM - Ball • Issue: • Cadmium found during routine testing • Source = clear outer pvc layer • Solution: • Replaced with technically and environmentally superior TPU • No cost increase. • Cost: • Costs ~ €900,000 • Could have been MUCH worse! Cadmium

  7. Cadmium GOLF GLOVE - Cadmium • Issue: • Cadmium in metal ball marker. • Solution: • Consumer research led to dropping ball marker on future designs. • Cost: • Lower

  8. BABY JORDAN - Lead • Issue: • Paint peeling from a toddler’s shoe contained lead • Action: • Voluntary recall ~110,000 pairs • Cost: • $4.4 million USD • > $2.3 million in supply chain logistics and management Lead

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