Reebok 2010 Annual Report Download - page 112

108 Group Management Report – Our Group Global Operations
Suppliers by region 1 )
1) Figures include adidas, Reebok and adidas Golf, but exclude local sourcing
partners, sourcing agents, subcontractors, second-tier suppliers and licensee
factories.
Footwear production by region 1 )
1) Figures include adidas, Reebok and adidas Golf.
03
04
75% Asia
16% Americas
9% Europe
97% Asia
2% Europe
1% Americas
Footwear production 1 )
in million pairs
1) Figures include adidas, Reebok and adidas Golf.
05
2007
2008
2009
2010
201
221
171
219
Several major programmes reach
important milestones in 2010
Throughout 2010, Global Operations
made significant progress on key
projects. In May, we saw the formal
opening of the Group’s Spartanburg
distribution facility in South Carolina,
USA. With this state-of-the-art facility,
we are now servicing our wholesale
customers as well as our own-retail and
e-commerce activities in the USA across
the brands adidas, Reebok, TaylorMade-
adidas Golf and Rockport – with 80% of
our customers receiving their orders in
three days or less. We also successfully
completed several important system
simplification projects. The Reebok and
Ashworth brands were integrated into the
long-term roll-out of the adidas Group’s
Global Procurement Solution (GPS).
adidas, Reebok and Ashworth purchase
orders are now procured through one
common platform covering the entire
flow from market demand, factory
planning through to supplier invoice
procurement and subsidiary billing. In
total, the GPS 2.0 release replaced five
major IT applications. We also reduced
the total number of supply planning
systems across the adidas Group from
three to one, establishing a common
planning, reporting and communication
platform. Another major achievement
in 2010 was the official implementation
of the Fast and Lean Creation process
for footwear. Product creation teams
are now developing around 75% of all
footwear directly with factories, laying the
foundation for the introduction of creation
calendars of 12 months or less.
Fast and Lean Creation for apparel
also reached a major milestone with
the launch of a new product lifecycle
management system, FlexPLM, within
just eight months of the project launch.
Also in 2010, Global Operations teams
contributed to both the Group’s Virtu-
alisation programme by creating over
18,000 articles as 3D files, and to the
“Fit & Size” programme which involved
the adjustment of over 500 base patterns
to current consumers’ body shapes for
an improved overall fit of garments.
Majority of production through
independent suppliers
To minimise production costs, we
outsource over 95% of production to
independent third-party suppliers,
primarily located in Asia. While we
provide them with detailed specifications
for production and delivery, these
suppliers possess excellent expertise in
cost-efficient, high-volume production of
footwear, apparel and accessories. The
latest list of our supplier factories can be
found on our website www.adidas-Group.
com/en/sustainability/suppliers_and_workers.
The adidas Group also operates a
limited amount of own production and
assembly sites in Germany (1), Sweden
(1), Finland (1), the USA (4), Canada
(4), China (1) and Japan (1). In order to
ensure the high quality consumers expect
from our products, we enforce strict
control and inspection procedures at our
suppliers and in our own factories. In
addition, we promote adherence to social
and environmental standards throughout
our supply chain see Sustainability, p. 120.
Overall number of manufacturing
partners stable
In 2010, Global Operations worked with
270 independent manufacturing partners.
While the number of suppliers in apparel
decreased as a result of further rational-
isation of the supply base, it increased in
footwear and hardware. The increase in
footwear was the result of the significant
growth in volumes and expansion into
new sourcing countries (e.g. Cambodia).
Of our independent manufacturing
partners, 75% were located in Asia, 16%
were located in the Americas and 9% in
Europe see 03. 32% of all suppliers
were located in China.
Our Global Operations function
manages product development,
commercialisation and distribution,
and also supervises sourcing for our
Wholesale and Retail segments as well
as for adidas Golf see 01. Due to the
specific sourcing requirements in their
respective fields of business, TaylorMade,
Rockport, Reebok-CCM Hockey and the
Sports Licensed Division are not serviced
through Global Operations, but instead
utilise their own purchasing organisation.
In order to quickly seize short-term
opportunities in their local market
or react to trade regulations, Group
subsidiaries may, with the approval of
our Social and Environmental team, also
source from selected local suppliers
outside the realm of Global Operations.
Local purchases, however, account only
for a minor portion of the Group’s total
sourcing volume.