Content

No. Table Page No.

1 Introduction 1
2 Content 2-9
3 Conclusion 10
4 References 11-12

















1

Introduction
Adidas is a German multinational corporation that designs sports clothing and accessories
based in Herzogenaurach, Bavaria, Germany. Adidas Group consist of Reebok
sportswear company. In fact, Adidas sells a varieties of product including shoes, shirts,
watch, sunglasses, bag and etc.
Adolf Dassler founded Adidas in 1948 , his brother Rudolf Dassler then joined him in
business became as Gebrder Dassler Schuhfabrik which translated as Dassler Brothers
Shoe Factory.The year in 1936, Adolf Dessler persuaded US Sprinter Jesse Owen to use
Adidas sprinter spikes shoe which is Adidas 1
st
sponsorships.
The brother then split up during the year in 1947 and Rudolf form a firm called Ruda and
later branded as Puma while Adolf forming a company named Adidas AG on August
1949.
Adidas has global corporate headquarters in Germany, and many other business locations
around the world such as Portland OR, Hong Kong, Toronto, Taiwan, England, Japan,
Australia, and Spain. Adidas also is widely known in the world consisting of 5 continent
which are America, middle east, Europe, Asia pacific and Africa.







2

Warehouse
Warehouse is a primary link between producers and customers. It is a part of a firm's
logistics system that stores products at and between point-of-origin and point-of-
consumption. Besides, warehouse provides information to management on the status.
Adidas uses leased warehouse. Adidas can have the advantage of short-term space rental
while using it like a private warehouse (Lambert, Stock & Ellram 2006).
When Adidas took over sporting brands Reebok and Rockport. They wanted to take
chance of the efficiencies and synergies that could be achieved by consolidating
inventory from five key brands, which are Adidas, Reebok, Taylor Made, Rockport and
Ashworth.
On the other hand, Adidass Northern European operations, who serve and lead retailers
in the UK, Ireland and Benelux was split between four conventional warehouses by using
different systems and processes with the overspill being handled by third parties.
According to Total Logistics recommendation, they develop a concept for a 30,000

fully automated facility. This was implemented in just 18 months, including the
implementation of a new warehouse management system. The procedures took into
account the current requirements of all five brands. This bought out the new facility
layout and requirements and the overarching Adidas warehouse management system
requirements (Total Logistic 2014).





3

Transportation
Adidas is one of the global leaders in the sporting goods industry. However, Adidas
needs transportation as an essential for the development of their company. Besides,
transportation is one of the important ring in logistics that enables trading between people
as it is the physical link connecting the firm to its suppliers and customers (Lambert,
Stock & Ellram 2006).
Adidas utilize an international water carrier to ship their products, etc. general cargo
ships. Furthermore, Adidas also utilize Air carrier for bulk order, high market demand, as
some product needed to deliver faster, for example, sports event. Other than that, motor
carrier is used by Adidas to deliver their product to retailer stores.
Nonetheless, a third party logistic named Total Logistics is an European supply chain
specialist who provide a supply chain rationalization solution to Adidas. Besides, they
lead worldwide supplier of sportswear and equipment. The successful project
consolidated four distribution centers into a single, new 30,000

facility at Trafford
Park in Manchester, providing cost savings as well as capacity to deal with future
volumes and expansion (Total Logistic 2014).
Adidas do not just transport their product themselves but third parties participate in
transporting goods. This is to reduce environmental risk and create a benchmark pattern
for evaluating the environmental performance of the third party (Krishnan 2011).





4

Information System
Adidas utilize the DSI system (day sales of inventory) implement the functionality for
warehouse management of apparel and footwear. Functionality of DSI included
information about product style, color and size, implementation of zone picking to work
with materials management, communication of the warehousing operation into the SAP
system.DSI also provided customized development to integrate data between the wireless,
handheld radio frequency devices and SAP for transactions, including goods receipt,
goods movements, replenishment, cycle counting, zone picking (According to Australia
Pty Ltd). For example, with DSI, the company can solve their problem by recognizing the
need of automated data collection using wireless handheld device.
With POS (point-of-sales system), Adidas can process and ship their goods to distributor
and retail outlet in a record of 24 hours .This is to prevent any late delivery to the
distributor or retail outlet (Perle 2014). For Example, POS system is quick and cost
effectively by matching the goods and correct dispatch notes to produce shipping label
and transfer the goods out to the distributers or retail outlet.
Inventory Management
Adidas are put on many effort in inventory management to maintain relationship with
customer. A good management in inventory can avoid out of stock, and given real-time
information regarding inventory and shipping status. Due to this, company can provide
good customer service to hold customer, avoid losing best customer. Lose customer
means that you are losing profit. Adidas has learned, they providing employees with the
tools they need so that they can perform their jobs properly is instrumental to keeping
Adidas retailers happy and continuous consumes in their stores (Erin Harris 2008).
One of the management concept used by Adidas is Enterprise Resource Planning
(ERP).That is a system that includes core finance and accounting, marketing, Human
Resource, and Information Technology functions that interfaces with the entire supply
chain. The benefits of this system is visibility throughout company, better sense of
operational control over improvements and capability of integrating the entire supply
5

chain.(Lambert,2006)For example, when retailers are asking questions when sales reps
are travelling, the sales reps will called customer service representatives to check the
company's ERP database.Depending on travelling schedules, there can be few days or
few weeks. By the time the sales representatives returned to the office and sent inventory
information back to the retailers, in-stock positions had changed, and sales opportunities
were lost. As a result, both Adidas and the retailers they serviced risked losing valuable
sales, customers, and profits.Sales reps will be able to open an application and tap into
the ERP system with broader bandwidth and higher. Sale reps will be able to place an
order, determine the status of an existing order, and answer the retailer's question right on
the spot more quickly than they do today (Erin Harris 2008).
Other than that, Adidas launched a new production system by applying Total Quality
Management (TQM) which is expected to improve productivity and increase output. For
an example, Adidas allow workers to stop the line if they feel it is necessary,giving the
workers the right to make a honest mistakes as well as protecting the workers from the
risk of injury, health and safety standards .Workers are given a rest day due to limit
imposed on their hours of work. In fact, worker opinions are very important to Adidas.It
is believed that, concerning the workers physically and emotionally will develop the
system that supports quality and improvement, getting things done the first time and
continuously in process of improvement (Nikolai Rogovsky & Emily Sims 2006).







6

Logistic Network
Nowadays, Adidas are rapidly become more strength. In 2010, 69 countries across the
globe were involving in producing Adidas goods, such as Africa, Asia, Europe, Australia
and New Zealand. (Anthony Grahame, eHow Contributor 2014) Adidas has rank by the
largest sportswear manufacturer in Germany and Europe. Besides that, it also is second
biggest sportswear manufacturer in the world. (Wikipedia 17 March 2014)
Adidas Group Retail has open more than 2200 retail stores over 60 countries around the
world to ensure their have the right products at the right time, and that they can run as
efficiently and effectively as possible. (Adidas Group 2014)
There are suppliers of Adidas around the world, such as Indonesia. It supply chain is
large, varied and multi-tiered. They get to utilize a detailed and systematic approach to
manage their relationships between suppliers. (Adidas Group 2014)
A logistic networks are dynamic constructions that require a permanent flow of products,
funds and information between their divided stages, including the end customer. In fact,
the primary purpose of logistic network is to satisfy customer needs, and in the process,
generate profit for itself.
A typical logistic network may involve a variety a stages, such as component or raw
material suppliers (S), manufacturer (M), wholesalers (W), retailers (R) and customers
(C).
Every single stage of the logistic network is multiply connected with the others not only
through the flow of products, funds and information, but also through a complex
mechanism of coordination. It is designed to generate and support trust, which is essential
for knowledge transfer. The lack of coordination leads to a degradation of responsiveness
and an increase in cost within the logistic network, which will eventually turn into
diminished profitability of the entire network. The network coordination requires that
each stage of the logistic network to take into account the impact its actions have on other
7

stages, especially when it comes to generating and transferring knowledge (Stefan
Nedelea 2008).

The structure of logistic network
According to the information research, we assume that Adidas is consider Large Logistic
Network. Large Logistics Network (LLN) is includes freight forwarding networks,
container cycles, transportation networks, production and supply networks. Example,
exist wherever a large number of different items are transported across several levels,
also using alternating transport carriers or transport modes are linked to each other by a
multitude of various relationships with structures, resources, processes and organizations
(Jrg Hinrichs, Hellingrath, Rittscher, & Laakmann. 2014).
The larger the Adidas logistic network, the higher the cost used to maintain Adidas.
Therefore, with outsourcing to reliable company in cheaper country, Adidas get higher
profit.


8

Greening
Adidas Group presents Environmental Strategy, commits to using 100% Better Cotton by
2018
The Adidas Group presented its Environmental Strategy, a five-year plan to reengineer
the companys approach to environmental management by focusing on significant
improvements along the entire value chain. As part of the strategy the Adidas Group is
committed to using 100% better Cotton by 2018.
"Implementing environmental performance across our value chain is an important step to
deliver sustainable operations over the long term, said Herbert Hainer, Adidas Group
CEO. "At the same time, our Environmental Strategy creates a sustainable platform for
future performance improvements and innovations and is therefore essential for the
success of our business.
One of the milestones included in the Environmental Strategy is the companys
commitment to using 40% better Cotton by 2015 and 100% by 2018. The Adidas Group
co-founded the Better Cotton Initiative which aims to improve the environmental impact
in the mainstream cotton industry. The primary focus is on reducing water consumption
and pesticide use in cotton farming.
"By supporting the Better Cotton Initiative, we want to contribute to making global
cotton production better for the people who produce it, better for the environment it
grows in and better for our consumers, said Herbert Hainer. "Our goal is to use 100%
better Cotton in our products by 2018 and we are excited to work closely with the better
Cotton Initiative towards achieving this ambitious goal.
Another flagship initiative evolving from the strategy is called "Green Company and
looks at the own sites of the Adidas Group. During 2010, the Groups headquarters in
Germany and five North American sites worked together to create a shared
environmental management system, certified to ISO 14001. All certified locations are
managed in accordance with the international management system standard which allows
9

global target-setting and management at HQ as well as a standardized approach to day-to-
day environmental management at site level.
Adidas Group has a target to consistently reduce the use of paper towards 2015. In 2012,
Adidas ran two projects, one consolidating hangtag shapes and one introducing single-
wall transportation cartons for apparel garments. In 2010, both projects were started
successfully contributed towards minimizing the use of paper and reducing costs.
Furthermore, the Adidas Group has been enhancing the content of sustainable materials
in shoeboxes on the footwear side for many years. Beginning with the use of soy-based
and water-based inks to 100% recycled cardboards.
Major accomplishments made within packaging for footwear are summarized for the
brand Adidas. Since 2006, Adidas transport cartons contain 100% recycled material and
33% reduction in weight.
Besides, Adidas shoe boxes include overall recycled content 95% based on weight.
However, most shoe boxes of Adidas are made from 100% recycled fiber and clay
coating; the ink used is soy-origin and water-based. Also in 2006, weight reduction for
shoe boxes have reduce between 38% and 60%. Also, no use of glues in Adidas
packaging.
Additionally, Adidas ball boxes contain 95% recycled material based on weight and 100%
recycled fiber and clay varnish. Then, there are no hangtag policy except for product
warning labels maintaining quality (Adidas Group 2014).





10

Conclusion
Adidas which means " All day I dream about Sports" has successfully does their role to
create customer value and make a good positioning in consumers' perspectives.
As a result, Adidas has fully committed to their slogan Impossible is Nothing". Now, it
is brimming with confidence. This is not surprising when you consider that Adidas now
consistently out-performs the rest of the sector and has enjoyed eight years of consecutive
double digit net income growth. It is now the world's no.2 sports apparel manufacturer.
Adidas has distribute their products all over the world. Retailers of Adidas are locate
internationally to ensure Adidas customers to purchase their products easily and
conveniently. In additionally, Adidas has a good transportation system. Therefore, it
bring benefits to its retailers as retailers would not face stock-out and get to replenish
their stocks consistently. Also, Adidas will not lost their customers.
Instantly, Adidas also use information systems such as DSI and POS. By using these
information systems, Adidas get to organize, direct and maintain their company
effectively and efficiently. Hence, Adidas has put in a lot of effort in inventory
management. A good management in inventory can avoid out-of-stock and control stock
level. There are two management concepts use by Adidas, such as ERP and TQM. These
management concepts are useful to increase the quality of their products.
Adidas has a large logistic network become an advantage for Adidas to build relationship
between suppliers, manufacturers, retailers and customers. Moreover, Adidas is concern
of environmental. So, Adidas use recycled packaging materials to avoid environmental
footprints. Recently, Adidas is committed to achieve a cleaner environmental strategy
which is the 100% better cotton on their products in five years time.
From my stand point, Adidas can still do more for the environment roles. If they just
continue doing what they are doing currently, their impact on the environment will be
positive. It would be great if the other companies, who are not already doing so, followed
Adidas as a model to protect our mother earth.
11

Reference

1) iSportConnect.(2011) Adidas Group - Business Development Manager, Adidas Golf
(Taiwan) [online] Available from
http://www.isportconnect.com/index.php?option=com_content&view=article&id=25704:
Adidas-group-business-development-manager-Adidas-golf-
taiwan&catid=81:job&Itemid=230 [Accessed at:17 March 2014]

2) ROGOVSKY, N AND SIMS, E(20060) CORPORATE SUCCESS THROUGH
PEOPLE [Online] TOTAL QUALITY MANAGEMENT.India:ACADEMIC
FOUDATION. Available from
https://www.facebook.com/l.php?u=http%3A%2F%2Fbooks.google.com.my%2Fbooks
%3Fid%3DdEvMIw75s9IC%26pg%3DPA13%26lpg%3DPA13%26dq%3DAdidas%2Bt
otal%2Bquality%2Bmanagement%26source%3Dbl%26ots%3Dhj7eeP-
lo_%26sig%3DtSICbUPa7H9AcMxVEvZYAsVsbWY%26hl%3Den%26sa%3DX%26ei
%3DKEgpU_yJPMXyiAfqsYDICQ%26ved%3D0CIUBEOgBMAg%23v%3Donepage%
26q%3DAdidas%2520total%2520quality%2520management%26f%3Dfalse&h=PAQH7
kIhf [Accessed at 17 March 2014]

3)Business-biodiversity(2011) Adidas Group presents Environmental Strategy, commits
to using 100% Better Cotton by 2018[online] Available from http://www.business-
biodiversity.eu/default.asp?Menue=155&News=370 [Accessed at 17 March 2014]

4)The Free Library(1996)ADIDAS(R) SELECTS UPS WORLDWIDE LOGISTICS TO
RE-ENGINEER SUPPLY CHAIN [Online] Available from
http://www.thefreelibrary.com/ADIDAS(R)+SELECTS+UPS+WORLDWIDE+LOGIST
ICS+TO+RE-ENGINEER+SUPPLY+CHAIN-a018291959 [Accessed at 17 March 2014]

6)Harris, E (2008) Inside Adidas' Inventory Management Initiative, Retail
Solution .[Online] Available from http://www.retailsolutionsonline.com/doc/inside-
Adidas-inventory-management-initiative-0001 [Accessed at 17 March 2014]
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7)Grahame,A (2014). What Countries Manufacture Adidas?.[Online] Available from
http://www.ehow.com/info_8187202_countries-manufacture-Adidas.html [Accessed at
17 March 2014]

8) Adidas group. Retail overview.[Onlie] Available from http://careers.Adidas-
group.com/retail-jobs.aspx [Accessed at 17 March 2014]

9) Adidas Group. SUPPLY CHAIN APPROACH . [Online] Available from
http://www.Adidas-group.com/en/sustainability/supply-chain/supply-chain-approach/
[Accessed at 17 March 2014 ]

10)Dipl.-Wirt.-Ing. JrgHinrichs, Dr. B. Hellingrath, Dr. J. Rittscher, F.
Laakmann,Fraunhofer(2005). Disturbance management in Large Logistics Networks,
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2014 ]

11) Total logistics(2007)Lean and Mean-Sports Industry Faces the logistics
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12) Adidas group. PACKAGING AND PAPER. [Online] Available at
http://www.Adidas-group.com/en/sustainability/products/packaging-and-paper/#/Adidas/
[Accessed at 17 March 2014 ] Institute for Material and Logistics,Dortmund.

13Lambert DM, Stock JR &Ellram, LM 2006, Fundamentals of Logistics Management,
European Edition, McGraw Hill.