Adidas' SCM Essay: Planning, Production, And Material Monitoring.

Background of Adidas

Question:

Write a report on Supply Chain Management of the Adidas.

The report talks about the supply chain management system of the Adidas. Adidas has been selected for the report.  It tells that how the supply chain management system helps to increase the revenue and profit of the company. Adidas is one of the biggest sportswear and accessories Manufacturer Company in Germany. Further, the report explains the key flows of the supply chain management and it also describes the planning process and MRP system of the company. It explains that how the company is making strategies to maintain a proper balance between demand planning and demand forecasting within the organization.  In addition, it describes that how the company is maintaining inventory system in the organization (Wang, Lai & Shi, 2011).

Adidas is a German multinational corporation headquartered is located in Herzogenaurach, Bavaria. The company is dealing with various sportswear products such as shoes, footwear, sports equipment, accessories, and clothing. It is the second largest corporation in the world and it is the biggest sportswear manufacturer in the Europe. There are approx 53,731 employees are employed in the organization. In today’s era, the company is expanding and flourishing its business operations and activities worldwide. Adolf Dassler is the founder of the company. It is the largest company measured by the revenue. The company is providing its sportswear products in more than 63 countries around the world (Dickson & Fuss, 2011).

The supply chain management plays a vital role in Adidas. The supply chain management is the management of flows. It is the oversight of the information, materials, and finance as they move in a process and procedure from supplier to manufacturer, retailer, consumer, and wholesaler. The supply chain management helps to maintain coordination and corporation among the different companies. There are five major flows involve in supply chain management such as information flow, product flow, risk flow, value flow and financial flow etc. It manages and operates flow of products and services in an effective manner. There are various techniques used by the company in supply chain management to attain the long-term goals and objectives of the firm. These techniques can be helpful to evaluate and analyze the threats of the competitors around the world. Adidas adopted a system of reporting and scoring on its supplier’s performance. Adidas is well known and reputed company thus; various techniques are used by the company (Mefford, 2011).

Role of Supply Chain Management in Adidas

Adidas supply chain management

(Source: Adidas group. Com, 2017)

Product flow: It is related to the product breakdown structure. The product flow refers to the flow of products and goods from the producer to the consumers are called as product flow. Adidas is using various strategies and policies to flow the products and goods in an effective and efficient manner. Adidas production system is unique and effective. It manages and produces various sports products through Adidas production system. The main aim of the product flow is to reduce the cost of production within the organization. It will also help to increase the number of customers in the global market (Wang, Lai & Shi, 2011). Through product flow, the company is able to manage and reduce the risk of defective selling products which may result in injury to the customers. The company also uses various safety policies to fulfill the goals and objectives of the firm. The product flow process includes the intervention of the various distributors, suppliers, customers, and dealers etc. Through product flow, the company eliminates and reduces the intermediaries by obtaining the product and goods directly from the manufacturer.  Further, the company uses balance scorecard approach to increase the number of customers within the organization (Hoejmose, Roehrich & Grosvold, 2014).

                                                                                       (Source: Adidas group, 2007)

Information flow: This flow plays an integral role to gain long-term goals and objectives of the firm. It is an important to the supply chain management. It includes the demand, change demand, purchase, product description, feedback and queries of the customers. Information flow is the important method of the supply chain management of Adidas. The company provides its sports products and accessories at reasonable prices to attract the more consumers around the world. The employees provide various types of information to the customers related to the quality of the products. The company provides unique and adequate information to the customers to attract more consumers in the global market (Stadtler, 2015).

Cash flow: The Company manages effective cash flow in order to meet the long-term mission and vision of the company. The cash flow provides information about the cash receipts and cash payments of the Adidas. The company is gathering the products from their clients to provide sufficient products to the consumers around the world. The customers pay the prices of the sportswear products and accessories to the producers. In this way, the company is able to provide attractive and unique products to customers around the world. The main aim of the Adidas is to fulfill the needs and requirements of the consumers across the world (Monczka, Handfield, R. B., Giunipero & Patterson, 2015).

Five Major Flows in Supply Chain Management

Return flow: This flow does not include the revenue and profit of the Adidas. The company uses effective and logistics techniques and methods to handle and manage the return flow of the products. The company returns the accessories and sportswear products if the products are not as per the needs and requirements of the customers. Therefore, it is a very important method of the supply chain management (Ranganathan, Teo & Dhaliwal, 2011).

Now it is recommended that Adidas is one of the biggest players in the world. The company should focus on the supply chain management system in order to accomplish the goals and objectives of the firm. It should focus on the production system and return flow system to enhance and increase the revenue and profit of the company (Olugu, Wong & Shaharoun, 2011).

Production planning process

The company uses effective production planning process to increase the sales of the company. The company follows transformation process in which raw material and stocks are sent to the factories for manufacturing of the accessories and sportswear products. The Adidas planning process includes scheduling, monitoring, loading, sequencing, and control activities to make the supply chain management more effective and unique. Further, enterprise resource planning system is used by the company to utilize the resources. The company maintains coordination and communication with customers to attract and retain more consumers in the global market. Further, various software is used by the company to evaluate and analyze the needs and expectations of the customers. Through the planning process, the company is able to eliminate and reduce the wastage (Brandenburg, Govindan, Sarkis & Seuring, 2014).

Production planning process of Adidas

(Source: Akrani. G, 2013)

The material planning process is an important and foremost process of the Adidas. By using material planning process, the company is able to provide various types of sportswear products such as shoes, apparel, accessories, and footwear.  Further, master production scheduling plan is developed and built by the company for the production, inventory, and staffing within the organization (Subramanian & Ramanathan, 2012). The company has developed a system for maintaining the proper inventory level within the organization. The company uses digital and innovative technologies to improve the material planning process of the Adidas. Along with this, the company uses bills of material to produce the specific sportswear products and accessories within the organization. The company maintains proper communication and collaboration with suppliers and manufacturers to overcome on the competitors in the organization. The material requirement planning process is important to monitor and focus on the activities and operations of the company (Hax, 2013).

Product Flow and Production Planning Process

It has been recommended that the company uses effective and unique strategies to beat the competitors around the world. Further, the company should focus on the supply chain management system to enhance and increase the profit and revenue of the company. In today’s era, the company is facing various challenges and issues due to poor quality. Therefore, Adidas must focus on the quality of the sports products to increase the number of customers around the world. The company should focus and monitor the activities of the employees to improve and enhance the productivity and efficiency of the organization as well as employees. Apart from this, the firm must focus on the production process and material planning process to manage and control the activities and operations smoothly. In this way, the company is able to increase and maximize the level of satisfaction of the customers in the global market (Bosona & Gebresenbet, 2013).

Demand planning and demand forecasting

Adidas focuses and monitors on the demand planning and demand forecasting to increase the profit within the organization. Technology plays an integral role to do effective supply chain planning and forecasting. By using effective planning and forecasting, the company is able to maintain effective supply chain management in the organization. The company also uses product barcodes to increase the sale of the sportswear and accessories products within the organization. Further, Adidas uses forecasting techniques to predict the future risks and challenges within the organization. The demand forecasting also helps to eliminate the barriers of the market (Atilgan, & McCullen, 2011). The firm should also focus on the advertisement and promotional strategies to increase the sale of the sportswear products within the organization.  Through demand forecasting, the company can produce right and suitable products at reasonable and suitable cost. The company can use survey methods to evaluate and analyze the needs and expectations of the consumers in the organization. The company uses various types of forecasting models such as qualitative, quantitative, time series model, drift model, econometric forecasting model, and native approach. The firm can also use qualitative and quantitative forecasting model to procure the products for the future time period. It is the most effective model of the Adidas. Further, the company can use data warehousing model to predict the demand behavior of the customers. Along with this, the firm uses forecasting evaluation techniques and methods to maintain the proper records of the products. Forecasting evaluation and accuracy techniques are used by the MRP to run the business activities and operate properly and smoothly (Teller, Kotzab & Grant, 2012).

Material Planning Process

Now it is recommended that the company must use effective and unique marketing strategies to gain success and growth within the organization. Along with this, the company must use the effective and unique technologies and methods to maintain a proper balance between the demand and supply in the competitive environment within the organization. Apart from this, the organization should use collaborative, planning, forecasting and replenishment techniques and methods to predict the demand and supply of the inventory in the global market (Waters & Rinsler, 2014). In addition, Adidas must focus on the supply chain strategy to manage and control the activities and operations of the organization.  Apart from this, the company should increase the transparency and collaboration in the workplace. Further, the firm should focus on the inventory management to maintain a proper stock of the products. Further, the company should improve and enhance the returns management to manage the stock of the company. The firm must focus on the just in time inventory management to reduce the inventory cost within the organization (de Leeuw & van den Berg, 2011).

Conclusion

On the above discussion, it has been concluded that Adidas is one of the biggest leaders in accessories and sportswear industry around the world. Further, effective and unique supply chain management is used by the company. The supply chain management helps to increase and enhance the revenue and targets of the firm. Along with this, effective planning process and MRP system are used by the Adidas to reduce the future challenges and obstacles within the organization. The firm also monitors and evaluates the needs, requirements, and expectations of the consumers to attain long-term goals and sustainability in the organization. It focuses on the inventory management and balanced scorecard approach in order to determine the long-term success and growth of the firm. Along with this, Adidas maintains proper communication and co-operation with customers in the global market to increase the number of customers globally. In addition, it focuses on the demand planning and demand forecasting to manage the different activities effectively and efficiently (Wang, Lai & Shi, 2011)

References

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Brandenburg, M., Govindan, K., Sarkis, J., & Seuring, S. (2014). Quantitative models for sustainable supply chain management: Developments and directions. European Journal of Operational Research, 233(2), 299-312.

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Dickson, M. J., & Fuss, F. K. (2011). Effect of acceleration on optimization of Adidas Bounce shoes. Procedia Engineering, 13, 107-112.

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Hoejmose, S. U., Roehrich, J. K., & Grosvold, J. (2014). Is doing more doing better? The relationship between responsible supply chain management and corporate reputation. Industrial Marketing Management, 43(1), 77-90.

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Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and supply chain management. Cengage Learning.

Olugu, E. U., Wong, K. Y., & Shaharoun, A. M. (2011). Development of key performance measures for the automobile green supply chain. Resources, conservation and recycling, 55(6), 567-579.

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Waters, D., & Rinsler, S. (2014). Global logistics: New directions in supply chain management. Kogan Page Publishers.