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ASICS Purchasing Function

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Introduction

Sports equipment manufacturer ASICS was established in 1949 and dedicated to sports

enthusiasts. The business is renowned worldwide for its research and development work on

sporting equipment, most notably its running shoes. When designing their range of running

shoes, ASICS is motivated by combining technical advancements that enable runners to perform

to the best of their abilities and maybe even go beyond their boundaries. This essay's goal is to

examine ASICS's procurement process. A detailed interview with the procurement manager was

conducted, and data were collected and analyzed from the interview to analyze the company's

Purchasing strategy and organization, purchasing process, and Sustainable company

procurement.

Procurement strategy and organization

Understanding the organization's mission, objectives, and value propositions is the first

step in ensuring that the procurement department can support and, if feasible, impact these

objectives. No ASICS executives, employees, or members of their families may participate in the

procurement process with a supplier whose relatives are involved in the management of

suppliers. Officers of the organization and employees engaged in the procurement process do not

take any gifts or perks that go beyond what society considers acceptable.

Purchasing model

Outside of its native Japan, ASICS conducts a large portion of its operations and

distribution. To sell and distribute goods efficiently around the globe, this is necessary. For

instance, a headquarters and several distribution facilities were built in the USA due to the

expanding demand in the US market. ASICs collaborate with suppliers to manage and arrange
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firm procurement efficiently. ASICS and its suppliers often confer to identify areas for cost

reduction and quality improvement. Additionally, they work together to create and maintain a

supply chain crisis management system. To increase governance, they also use electronic

transactions, three-way matching (purchase orders, statements of delivery, and invoices), and

business efficiency.

Procurement strategy

ASICS chooses any new footwear, clothing, or accessories supplier to manage the supply

and procurement chain effectively. Once a business relationship has been established, ASICS

continuously evaluates the supplier's and the company's supply chain's social and environmental

sustainability performance each year against ASICS standards. They collaborate with industry

associations and labor unions to guarantee high performance as they strive to improve

continually. The ASCIS's buying function management and structure are shown below to

guarantee process and effectiveness improvement. The benefit of ASICS' business model is that,

although being global, they have direct control and command over its supply chain. The ASICS

supply chain management program has clear leadership, coordination, and a community of

expertise. High-powered incentives and flexibility are some of the options that ASICS needs to

catch up on due to manufacturing rather than purchasing. Below is the ASICS strategy
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Supplier selection

Under the ASICS supply chain management program, all suppliers have direct oversight

over and control over production. The company's extensive worldwide reach results in

significant transaction expenses. ASICS decides to incur expenses via the company rather than

the market. This results in very high administrative expenses and potential principal-agent

problems. One of the essential organizational tasks required for effective business growth and

development is evaluating and selecting suppliers. The ACIS process includes the following

steps: recognizing a need for supplier selection, identifying supply requirements, choosing a

supply strategy, selecting potential suppliers, reducing the number of suppliers in the selection

pool, conducting a formal evaluation, choosing a supplier, and coming to an agreement. Below is

the ASICS supplier selection process.

Spend Cube Analysis

Spend analysis, also known as expenditure analysis, assesses every purchase an

organization makes for products and services. The supply chain management of ASICS

Corporation's inbound logistics is carefully managed. ASICS has 21 tier 1 sourcing nations and

150 tier 1 suppliers, and 100% of its supply base is organized into a supply chain. These vendors

offer ASICS facilities, knowledge, and other resources such as Sustainability, compliance, and

dedication are the main focuses of ASICS supply chain management. Monitoring and risk
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management, governance and transparency, training and capacity development, and stakeholder

engagement make up this compliance and commitment program (ASICS Global, 2022). A

procurement expenditure cube has three dimensions: suppliers, corporate business units, and

item categories. The purpose is to identify who purchased what from whom. ASICS utilizes

Oracle as its enterprise resource planning (ERP) system. Data collected from the system is stored

in a database, and developers may modify the ERP output.

Procurement process

To uphold the ASICS Corporate Philosophy of providing valuable goods and services via

sport to all our consumers, ASICS executes the procurement process at the lowest possible cost

through creative improvements to procurement customs and techniques. ASICS works with

approved suppliers all around the globe as business partners to complete its procurement process.

The business follows a transparent approach, choosing suppliers fairly via open competitive

bidding, allowing global competitors to compete, and encouraging supplier consolidation and

standardization of products and standards.

ASICs Van weele’s model analysis

Van Weele’s model describes purchasing process as specification, supplier selection,

contracting, ordering, expediting, and evaluation. The ASICS purchasing manager frequently

consults with the heads of each department in the designing department to obtain the proper

specifications, holds meetings with the sales department to comprehend the forecast, and works

with financial management to understand payment terms so that they can effectively negotiate

with suppliers. The following monthly savings were achieved as a result of their close

collaboration. Below is Van Weele’s model

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(van Weele 2010: 9)

Raw material purchases and supplier relationships are both covered under procurement.

As was already noted, ASICS' supply chain management program covers all of the company's

suppliers. ASICS exclusively works with suppliers that share ASICS' commitment to

Sustainability and their business practices. The recruitment, employment, training, development,

and remuneration of all staff are all included in human resources management. Because they can

get the top scientists and researchers to work at their Institute of Sport Science to develop their

goods, ASICS excels in this area. Even professional sportspeople and former Olympians are

drawn to work with them as mentors.

Sustainable procurement

ASICS abides by all relevant laws and social conventions, including environmental

preservation and human rights, and requests all approved suppliers to do the same.

Supplier sustainability codes

ASICS is a multinational, international business that relies on a worldwide supply chain

to manufacture its goods—maintaining ethical business practices, enhancing working conditions,

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and working to stop human rights violations within the corporation and the supply chain. To

increase Sustainability, ASICs vehemently oppose coercion or forced labor. They have adopted

the Slavery Act 2015 concerning modern slavery and human trafficking in their business and

supply chains, and they have zero-tolerance policies and an approach to this issue. They also

implement a stringent supply chain management program to ensure compliance throughout the

supply chain.

Sustainability standards

To decrease the environmental impact of ASICS goods, Asics requires that its suppliers

monitor their primary environmental indicators and take further steps to minimize their effects.

ASICS provides training and capacity development to its sources to ensure that they abide by

sustainable requirements. They teach their Tier 1 and Tier 2 suppliers so that they may gradually

improve their performance in terms of labor and the environment. A list of ASICS stakeholders

and their roles is provided below.

Sustainability assessments

ASICS Corporation has strengthened vertical integration. The whole supply base of

ASICS is managed through its supply chain. Regarding vertical integration, ASICS has shifted

its emphasis. In the early stages of vertical integration, they are concentrating more on backward

integration, including heavy management. Manufacturing, raw materials, and components have

grown significantly in importance and undergone numerous changes. As a result of ASICS's new

sustainability production standards, they put a lot of effort into only working with vendors who

share their values. To find the best raw materials that deliver the best results while being

environmentally safe, ASICS has even been collaborating with various suppliers and researchers.

Asics' supply chain management has strongly emphasized educating suppliers and changing the
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manufacturing process to lessen their carbon footprint, boost productivity, and save energy.

Along with this program, ASICS does internal audits, commissioned audits, and partner audits

on suppliers; 88% of them have been classified as level C or above, according to ASICS.

Sustainability initiatives have significant management and effect on ASICS manufacturing.

Conclusion

ASICS adheres to several procurement laws and regulations; as a result, the buying

department is operating well. As per the interview with the procurement manager, the business

strategy and procurement plans are aligned. To do so, vendors are chosen based on Van weele’s

model and analyzed through the spend-cube model and other predetermined criteria. Suppliers

are categorized, and Sustainability, ethical business practices, and human rights are considered.
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References

Herremans, I. M. (2020). Sustainability Performance and Reporting. Business Expert Press.

Ramlee, N. A. (2021). Technology Entrepreneurship Project (ENT 600): Asics Corporation.

Van Weele, A. J. (2018). Purchasing and supply chain management.