Adidas 2005 Annual Report Download - page 104

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100 Group Management Report
Global Operations
The adidas Group’s Global Operations division coordinates
the development, commercialization and manufacturing
of our products and leads the Group’s efforts in supply
chain improvement. The adidas Group supply chain can be
divided into two core cycles: product creation and procure-
ment. The product creation cycle describes our activities
from the initial product concept to product offering and
comprises the design, development and commercializa-
tion of our products. This part of the process is followed by
the procurement cycle, which includes order management,
manufacturing and distribution. We remain committed to
making significant permanent improvements in both the
creation and procurement areas to achieve optimal effects
in terms of quality, costs and delivery performance.
Independent Manufacturers Produce adidas Group Products
The vast majority of our products are produced by indepen-
dent manufacturers. We provide these suppliers with detailed
specifications for the production and delivery of our products.
In order to ensure the high quality that consumers expect from
our products, we enforce strict quality control and inspection
procedures (see our Social and Environmental Report).
Footwear Production Dominated by Asia
In 2005, Asia continued to be our most significant sourcing
region. 96% of our total footwear volume was produced in this
region, with China representing our largest source country
with approximately 55% of the total volume followed by Indo-
nesia and Vietnam with 20% each. Production in the Americas
and Europe represented a total of 4% of our sourcing volume.
Our largest footwear factory produced approximately 10% of
our footwear sourcing volume in 2005.
Asia Plays Key Role in Apparel Production
Asia also represented the most significant portion of our
source base in apparel with 78% of our total apparel volume
coming from the region in 2005. China and Indonesia were the
largest source countries, representing 25% and 17% of total
apparel production, respectively, followed by Europe with 16%
and the Americas with 6%. The largest apparel factory pro-
duced approximately 8% of our total apparel volume in 2005.
Brand-Specific Hardware Production
The bulk of adidas hardware products, such as balls and
bags, are made in Asia, representing 96% of the volume in
2005. China remained our largest source country, repre-
senting 61% of adidas’ hardware production with Pakistan
and Vietnam each producing 16%. The remaining 7% was
sourced via other Asian and European countries. The major-
ity of TaylorMade golf club components were manufactured
in China and then assembled by TaylorMade in their major
markets. The TaylorMade-adidas Golf ball manufacturing
strategy was changed in 2005. Premium-level offerings are
produced in the USA, while the majority of the product range
is now sourced in Asia.
Americas 2%
Footwear Production by Region
Asia 96%
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Europe 2%
Americas 6%
Apparel Production by Region
Asia 78%
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Europe 16%