Supply Chain Mangement Of Adidas Company

Adidas is a German based multinational company who manufacture and sale sportswear like Shoes, Clothes and others. The inception of the company was in 1949 by Adolf Dassler. The company current has over 57,000 employees and is headquartered in Herzogenaurach, Germany, the annual generated sales of the company was €21. 9 Billion. Every year Adidas produces over 900 million sports apparels. It is mainly consumer focused, which means they continuously work on improving the quality, feel, look and image of the products and the organizational structures to match and excel consumer desires, to offer them the highest value. It has omnipresent channel in the customer path, offering the opportunity to view in store, ship from store, returns to store and click and collect. Adidas being one of the biggest sporting goods producers in the world has partnered with OMSAN since 2012. The brand OMSAN has been offering services to adidas as a value-added logistics partner. Providing the flexibility, fast decision-making and continuity that they need in intense competition and changing condition.

Using its own designed sorter system, provides store-based packaging and shipment for more than 1050 sales points all over the world. They also offer adidas custom clearance, bonded warehouse, non-bonded warehouse, return and handling operations as well as full truck loading all over the world. It provides service to 12 Million adidas and reebok shoes, textile and accessory products every year. The brand increased its logistics manpower by 5% to 6175. In 2018, around €95 million i. e. 12% of its total capital expenditure went into logistics. Adidas has been working towards sustainability for many years now, they have started making shoes from ocean waste which will produce 11 million pairs of shoes in 2019. It also aims to use 100% recycled polyester in every product by 2024. Hence, adidas recognize the task ahead as a marathon and not as a sprint. From the start sketches to the last placement in the organisation, a lot of impetus takes place in the supply chain. The supply chain management team in adidas plays a crucial role in bringing the products to the customer. Adidas products go around the world and includes every step from purchase to distribution all over the global markets. They operate along with internal teams and external vendors, to make sure that products are at the right place, right time and right quantity. Most of the products are produced in over 100 manufacturing facilities all over the world by working closely with their key strategic partners. The performance criteria is regularly assessed and reviewed to determine the supplier relationship.

As of 2018, 84% of the strategic suppliers are working with them for a span of 10 years now and 42% have the contract for more than 20 years. To meet its supply chain demand, Adidas has outsourced many of its work and is now working with more than 700 factories across the world from more than 50 countries. The supply chain of Adidas work with many multi-layered global independent companies and different types of B2B partners and have categorised in to 5 main types. Main suppliers, Subcontractors, Material and other service providers, Licensees and Agents. Many of the factories are directly contracted with Adidas Some of the main countries from where exports happen are as below.

• Asia: China, Vietnam, Korea, Indonesia and India
• America: United States, Brazil, Argentina, Canada, and El Salvador
• EMEA: Germany, Turkey, Italy, United Kingdom, and Spain.

Adidas has five main categories of suppliers. They are:

• Main suppliers: Adidas has a direct contract relation with them for the supply of product, for both domestic or export market consumption.
• Subcontractors: Adidas suppliers have subcontracted the factories to perform manufacturing operations which the main suppliers are unable to do it inhouse.
• Material and other service providers: Adidas does not have a direct relation with them in the manufacturing operations, but they provide goods and services to the main suppliers who are unable to carry out in their own facility.
• Licensees: they are independent companies who handle the design, production and distribution of certain products.
• Agents: Private companies act as mediators to supply product manufacturing, handle the manufacturing processes and sell finished goods to the company.

Adidas plots its supply chain risk to make sure that all its suppliers manufacture a environmentally and socially responsible method of using its resources properly. By gathering customer specific data from the order history, the demand planning process does statistical forecasts in the supply chain management. The Supply planning process which includes production planning helps in obtaining results from demand planning process. As soon as the production planning process finishes, the information flows to manufacturing process in which complete production plan is laid to carry out with the production process. The information from manufacturing department flows to distribution department for inventory storage, inventory deployment and customer order satisfaction. In Adidas, the information flow system makes sure that every department gets the required information on time and the structure of information is also maintained. Therefore, a loss of single information would lead to affect the whole supply chain management.