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Background of the organization

Transportation and distribution are the two crucial part of logistics management. Transportation management refers to the subset of the supply chain management that focuses on the transportation operation (Nagy & Tick, 2017). However, transportation management includes transport cost, user policy and time in order to carry the goods. Transportation management system or TMS involves in the execution of the transportation objectives. However, carrier dispatching and carrier rate acceptance are the major parts of the transportation system. On the other hand, it is necessary to follow up the transport system to distribute the goods. This study deals with the transport process, distribution and incoterm analysis in the context of Adidas Singapore Pte Ltd.

Adidas Singapore Pte Ltd is established in Singapore however, the main branch of such organization is situated in Germany. This organization manufactures and designs shoes, clothes and accessories. They offer environmentally sound apparel and shoe that enables them to maintain environmental sustainability. This is the second largest sportswear manufacturer in the world. In the year 2016 the revenue if Adidas was $19.29 billion as per the global sale (Adidas.com.sg, 2017). The mission of Adidas is to achieve the economic growth and competitiveness by developing innovation and stewardship. The vision is to develop their business in order to play a lead role in the global market. This organization operates in the global market including U.S, Japan, Germany, Australia and EU countries. However, their strategic goals include the partnership working to enhance their business. Therefore, they establish the tools in order to maximize the productivity. Protection of the intellectual property is another goal to enhance the trademark system. They try to improve the information system to communicate with the stakeholders. The market analysis of such organization shows that they have occupied a good position in the global market and have high market growth. NIKE, Puma, Callaway Golf Company and Fila are their major competitors in the international market (Marketing91.com, 2017)

Transportation includes multiple activities in order to move goods from one place to another place (Gelhausen, Berster & Wilken, 2017). In the context of Adidas Singapore they follow there types of incoterms one is the air transportation, which is the costly transportation process. Ocean freight is their second transportation method that is a time-consuming process but includes low cost. Therefore, the road transportation includes the minimum speed with average cost. Transportation of the products to the warehouse and from warehouse to the customers is the major activity of the transportation process. This organization selects their transportation process based on the distance between the starting point and the destination. This organization also focuses on the delivery time and cost in order to select the transportation process. Adidas selects sea freight as the prime shipping method while they need to transport products from factories to the retail stores overseas(Xu, Grant-Muller & Gao, 2017).

This process is chosen by this organization, as it is a cost-effective process. However, if the consumer demand is not too high then the organization select this shipping process for the transportation of goods. The logistics team of Adidas involves in the reduction of the freight cost that is occurred by air transportation. On the other hand, high carbon emission is another negative aspect of such transportation thus Adidas team tries to avoid air transportation except in the emergency

Incoterms selection consideration

 (Adidasshoescommoditychain.wordpress.com, 2017).

EXW or Ex works is one type of incoterm where the seller is not responsible to load the goods on the vehicle that is given by the buyer. Here the seller is responsible to deliver their goods at their premises from where the buyer takes it. In FCA process the seller, complete his obligation while he or she delivers the good to place fixed by the buyer. Here the carrier charge is provided by the seller (Schaefer, 2017). On the other hand, Free on board and free alongside ship clear the duty of the seller as in this process the seller has to only delivers the good at the buyer point and they do not take any responsibility or risk regarding the damage of good.

Cost and freight refer that the seller has to make a contract with the buyer that they will pay the freight and the cost to transport a good to the destination point selected by the buyer (Krepelnik, 2017). On the other hand, cost, insurance, and freight or CIF lead the seller to make a contract to give insurance along with the freight cost to the buyer if any damage occurs with the products during its transportation. In the context, of Adidas FAS or free alongside ship can be the best incoterm for their transport and distribution management. In this process, the Adidas do not take any responsibility for the product damage during its transportation. On the other hand, they will not provide any cost or freight to the buyer. However, they have to deliver their products alongside the vessel and their obligation will be fulfilled. This will beneficial for them to manage their supply chain without any risk and liability.

Transportation goals and needs in context of Adidas

Adidas aims to reduce their transportation cost for this purpose they have established a logistics team. This team is associated to reduce the application of air transportation. In order to reduce the transportation cost, this organization uses sea freight.  However, another transportation goal is to maintain the environmental sustainability during their product distribution. For this reason, they have started to use sea freight in comparison to air transportation. However, in air transportation high amount of carbon emission occurs thus, they focus on the sea freight to keep the environmental sustainability. However, it is important for an organization to maintain the environmental sustainability during the transportation of goods (Xiong et al., 2017).

Shipping is the main need for the transportation for an organization (Ivanov, Tsipoulanidis & Schönberger, 2017). In the context of Adidas, they want to reduce their transportation cost. Based on this requirement they need transportation by ship, which will minimize the high cost of transportation. On the other hand, the workforce is required for the manual handling and the technical process. To complete the entire transportation operation, communication is required via technology for this reason technical expertise is required. As for example, Infor supply chain management software or Info SCM software will be helpful for Adidas to complete an end-to-end operation in supply chain management. Apart from these, financial resources need to manage and compliance with the legal requirements should be done by Adidas during the transportation of goods. As for example, airway bill, invoice and ocean bill of lading need to maintain properly during the transportation of goods.

Analysis of the effectiveness of the transportation capabilities

Geographic coverage is a basic criterion to select the carrier for the transportation (Rusko, 2017). However, based on the geographic the transpiration carrier is chosen. As for example, if Adidas need to cover a huge distance with short time frame then they need to air transportation. On the other hand, transit time and reliability are other factors of carrier selection. However, it is important for an organization to measure the transit time as based on this time they can choose their carrier. If the transit time is ling then they will choose the fast transportation process.

The carrier should be reliable as it ensures the protection of the goods from the theft or damage (Macchion et al., 2017). Therefore, technical capabilities are required to share information during the transportation of goods. On the other hand, based on the availability and capacity of the equipment the organization chooses the carrier. As for example, for the sea freight, the equipment are required to load the heavy goods on the container.  If there is less availability such equipment then the sea freight cannot be chosen. The financial stability of the carrier should be good and it needs to ensure the product protection during its transportation (Mazzanti, 2017). In the context of Adidas, they need to focus on the geographic coverage and transit time and reliability during their product transportation and distribution. However, they can select their carrier based on the distance of starting and destination point of product transportation. On the other hand, it is crucial for this organization to select the carrier that will be reliable for their good transportation. However, a reliable carrier will protect their product from any kind of risks like damage and theft.

The carrier relationship management goal of Adidas Singapore is to develop a better management regarding the industry awareness, cost and the continuous improvement of the organizational process (Maloni, Gligor & Lagoudis, 2016). However, it is important for an organization to manage the carrier relationship to transport the goods in a proper way. Therefore, development of the carrier link is useful for an organization to build long time relationship to gain competitive advantages in the market. In order to manage the carrier relationship some criteria are mentioned below.

Be reliable is important for an organization while delivering the service to the customers. However, Adidas Singapore Pte has to maintain the reliability as the consumer can trust them and their service delivery process. It is important for an organization to deliver their products at the specific time. Therefore, the organization needs to ensure about the zero damage of the products with proper invoice while delivering the product (Krepelnik, 2017). If the third party involves in the transportation process then they need to meet the all criteria of the shipping process. By using this way Adidas will be able to save the cost of the transportation and to satisfy their customers by improving the carrier management.

Showing responsiveness is crucial for an organization to manage the carrier relationship. However, it is important to being responsiveness to the consumers while delivering the goods at their end (Nagy & Tick, 2017). This will improve the between the relationship between the customers and the organization. In the context of Adidas, they need to be more accountable towards their logistic management. This will be crucial for them to make a good relationship with their customers by managing the carrier during the transportation.

Recommendations of the appropriate incoterms

Use of advance technology and creating more innovation in the transportation process the business can achieve success in their logistic management (Macchion et al., 2017). Innovation in the logistics management refers to the information management, inventory management and carrier relationship management. Incorporation of the innovation in the carrier management Adidas Singapore Pte Ltd can develop the relationship with the customers by delivering the goods at right time and right place.

Adidas Singapore Pte Ltd can manage a good relationship between the shipper, carrier and the providers by using such above criteria. However, balancing the cost is crucial for an organization while managing carrier (Brekalo & Albers, 2016). Adidas needs to use technology to innovate new features in their transportation process to enhance it. On the other hand, they need to be more accountable and responsible regarding the carrier relationship management. However, it is vital to ensure the customers regarding the protection of the goods. This can be done by making a proper communication between the shipper, carrier and providers as those are associated with the carrier management. For this organization the shipper and the carrier need to make a collaborative work to detect the common goals and needs regarding the logistics operation. This will enhance the customer expectation towards the service delivery of such organization.

Conclusion

Adidas uses three types of transportation process to distribute their products worldwide. As for example, they use airfreight, ocean freight and road transportation. Their supply chain is large and multi-tired. This organization has a multi-level monitoring process in their supply chain management. In the context of Adidas, they focus on the sea freight due to reducing the transportation cost. However, this organization also maintains environmental sustainability. For this purpose, they use sea freight rather than airfreight as air transportation causes high carbon emission. Adidas has many competitors in the global market. Hence, they need to enhance their transportation in the Singapore as well as global market. Adidas Singapore Pte Ltd. selects their carrier based on the geographical coverage and the transit time and reliability. However, it is important for an organization to select the carrier based on the transportation time as if the distance is huge from starting point to the destination then the organization needs to select air transportation. On the other hand, reliability is a vital factor in the transportation as protection of the goods is crucial. For this reason, Adidas Singapore needs to focus on the reliability of the goods during the transportation to make a safe delivery of the goods to the buyer.

References

Adidas.com.sg. (2017). Adidas. Retrieved 7 November 2017, from https://www.adidas.com.sg/

Adidasshoescommoditychain.wordpress.com (2017). Transportation.  Retrieved 7 November 2017, from

https://adidasshoescommoditychain.wordpress.com/transportation/

Brekalo, L., & Albers, S. (2016). Effective logistics alliance design and management. International Journal of Physical Distribution & Logistics Management, 46(2), 212-240.

Gelhausen, M., Berster, P., & Wilken, D. (2017). A new direct demand model of long-term forecasting air passengers and air transport movements at German airports. Journal of Air Transport Management.

Ivanov, D., Tsipoulanidis, A., & Schönberger, J. (2017). Distribution and Transportation Network Design. In Global Supply Chain and Operations Management (pp. 189-232). Springer International Publishing.

Krepelnik, A. (2017). The importance of Incoterms in freight forwarder business (Doctoral dissertation, Ekonomski fakultet, Sveu?ilište u Zagrebu).

Macchion, L., Da Giau, A., Caniato, F., Caridi, M., Danese, P., Rinaldi, R., & Vinelli, A. (2017). Strategic approaches to sustainability in fashion supply chain management. Production Planning & Control, 1-20.

Maloni, M. J., Gligor, D. M., & Lagoudis, I. N. (2016). Linking ocean container carrier capabilities to shipper–carrier relationships: a case study. Maritime Policy & Management, 43(8), 959-975.

Marketing91.com (2017). Top 10 Adidas competitors – Adidas competitor analysis. Marketing91.com. Retrieved 7 November 2017, from https://www.marketing91.com/top-10-adidas-competitors/

Mazzanti, P. (2017). Toward transportation asset management: what is the role of geotechnical monitoring?. Journal of Civil Structural Health Monitoring, 1-12.

Nagy, A., & Tick, J. (2017, September). Review of predictive analytics vendors for transport management systems. In Intelligent Systems and Informatics (SISY), 2017 IEEE 15th International Symposium on (pp. 000225-000230). IEEE.

Rusko, R. (2017). The web and the consumer-company and buyer-seller interfaces-making sense of the the architecture of demand and supply chain management. International Journal of Value Chain Management, 8(1), 1-21.

Schaefer, T. J. (2017). Incoterms® Use in Buyer-Seller Relationships: a Mixed Methods Study.

Xiong, G., Shen, D., Dong, X., Hu, B., Fan, D., & Zhu, F. (2017). Parallel Transportation Management and Control System for Subways. IEEE Transactions on Intelligent Transportation Systems, 18(7), 1974-1979.

Xu, M., Grant-Muller, S., & Gao, Z. (2017). Implementation effects and integration evaluation of a selection of transport management measures in beijing. Case Studies on Transport Policy.

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