Reebok 2011 Annual Report Download - page 96

adidas Group
2011 Annual Report
GROUP MANAGEMENT REPORT – OUR GROUP
92
2011
02.5 Global Operations
02.5
Supporting the Group’s growth projects
Global Operations supports the Group’s key growth projects outlined
in the Route 2015 strategic business plan, such as the adidas NEO
label, market and channel programmes as well as brand programmes
such as customisation SEE GLOBAL BRANDS STRATEGY, P. 68 SEE GLOBAL SALES
STRATEGY, P. 62
.
With the establishment of three- and ten-month concept-to-shelf
processes and a dedicated source base, the framework to service the
fast-fashion adidas NEO label model was successfully completed and
handed over for implementation in 2011. The focus in 2012 will now be
on providing supply chain services for all adidas NEO stores.
In 2011, Global Operations also provided support in further harmon-
ising customisation processes and systems. It has clearly defined
supply chain capabilities that support the demand growth for the
customisation business until 2015 and supported the evaluation of
existing customisation processes for adidas and Reebok footwear.
For Retail, Global Operations continues to offer its short lead time
capabilities with the ultimate goal of enabling a demand-driven supply
chain that leverages existing short lead time production models to
improve availability without excessive inventory.
Modernising the Group’s infrastructure
Global Operations continues to focus on building the required infra-
structure, processes and systems to support the Group’s growth
plans. This includes further process simplification, consolidation of
legacy systems and distribution structures, as well as the creation of
state-of-the-art systems required to support new business demands.
As a significant milestone under this priority, Global Operations
announced the building of a state-of-the-art Central Distribution
Centre (CDC) near Osnabrueck, Germany, to service European
markets. The CDC will open in 2013. By 2015, the CDC will be capable
of holding 35 million pieces during peak times and will handle a
throughput of more than 100 million pieces annually for the adidas,
Reebok and Rockport brands across all channels. In 2011, Global
Operations also successfully moved and integrated logistics flows for
TaylorMade-adidas Golf and Rockport into the Spartanburg Distri-
bution Centre (USA). In addition, Global Operations successfully
rolled out the Group’s standard warehouse management system
“Manhattan” to warehouses in Panama and China. Manhattan will
also be introduced in other new distribution facilities the function is
building, e.g. in Mexico and South Korea.
Other important milestones in 2011 were the completion and handover
of the new, streamlined Fast and Lean Creation (FLC) process and the
new product life cycle management system for apparel (FlexPLM).
The FLC programme was introduced in February 2009 with the goal
of simplifying the Group’s product creation process across operations,
sourcing and the supply base, as well as harmonising processes
between the adidas and Reebok brands. Global Operations has also
been supporting the company’s continued efforts in introducing
virtualisation to 3D design, product prototyping and sampling. It has
helped to enable the first completely virtual sell-in process tested in
France in 2011, which saw a fully virtual product presentation with
just one physical colourway for all articles. As increasing numbers
of internal and external customers embrace the technology, this will
drive a longer-term reduction in product samples and therefore cost
SEE GLOBAL SALES STRATEGY, P. 62 . Finally, Global Operations is also about
to complete the implementation of the Group’s Global Procurement
Solution, GPS. The final system release will see an improved
integration of and connectivity to suppliers and third-party logistics
providers. Pilot systems have already gone live for factories in China,
Vietnam and Cambodia with the global go-live scheduled for 2012.
With the final phase of the project, Rockport and the company’s Sports
Licensed Division in the USA will start using GPS in late 2012.
Supporting Driving Route 2015 initiatives
The implementation of the company’s Driving Route 2015 programme
SEE GROUP STRATEGY, P. 60 sees the addition of three new initiatives to the
Global Operations strategy until 2015.
– Superior service for the adidas brand’s “Global Foundation Range”:
Global Operations will give products ranged as part of the “Global
Foundation Range” preferred treatment in terms of availability and
replenishment SEE GLOBAL BRANDS STRATEGY, P. 68 .
– Establishing an above-market European supply chain: Global
Operations will work on centralising supply chain capabilities such
as purchasing and inventory management to provide a central service
to all European markets. The pooling of supply chain services on
above-market level aims at reducing supply chain cost and increasing
product availability.
– Organisational integration: Global Operations will assume end-to-
end responsibility for the Group’s supply chain with all market
operations and local sourcing functions moving into Global Operations
by 2013. Local systems and processes are being reviewed and
harmonised for ultimate integration into global structures.