As one of the largest sportswear brands in the world, Adidas needs to stay ahead of trends to maintain its position in the market. That’s why the company focuses on leaner and faster manufacturing processes. Adidas recently decided to take its manufacturing processes to an entirely new level.
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Situation: Changing Trends in Sports Apparel
For the past few decades, most consumers have cared more about function than fashion when it came to their athletic shoes and apparel. Consumers wanted shoes that helped them run faster and clothes that wicked away moisture quickly. However, the industry has recently seen a shift in consumer desires. Consumers are starting to care about fashion as well as function in their sportswear.
Going to the gym is now a lifestyle choice, and many people want to look good when they go. Because sportswear trends have begun to change, Adidas saw the need to develop products faster in order to keep up with fashion. The company is changing to a more consumer-centered focus. As CEO Herbert Hainer stated, “We will become the first true fast sports company.”
Approach: Adidas Amps Up its Manufacturing Speed
Adidas has high production expectations. The company recently set the goal of taking 50 percent of its products from inception to store shelf in 45 days or less. That’s something that very few companies can claim. Adidas already has an impressive supply chain and hopes to reach this faster production goal by 2020 so that consumers can get the products they want as quickly as possible.
To reach its fast manufacturing goals, Adidas plans to focus on three elements:
- Localized Production: Instead of continuing all production in Asia, Adidas is looking to move manufacturing closer to its consumers, including those in the U.S. This will cut down on the typical six-week delivery timeframe after products are manufactured.
- Cloud Technology: Adidas is implementing widespread cloud technology to increase manufacturing agility and end-to-end visibility for its consumers. Inventory levels will also be easier to track in real time so products can get to their destinations faster.
- Consumer-Driven Products: Adidas is listening to its consumers and is heading towards an open-source ecosystem for its suppliers. This is a complete culture overhaul for the company.
Impact and Advantage
Image via Flickr by autumm_bliss
A desire to become a more consumer-centered company has driven Adidas to push for faster design, development, and manufacturing when it comes to new products. As Hainer said, “We have developed game-changing capabilities that will enable us to listen and to win our consumers with the right concepts anytime, astonishing experiences everywhere, and the desired product always.”
As a company, Adidas understands that it will need to spend a significant amount of money on big data in order to make the right decisions and get the company where it wants to be. The company’s investors are comfortable with that and understand that it will take the company one step closer to meeting the new production goals. Adidas is still behind competitor Nike in terms of sales, profit, and value, but a more customer-centered focus could help close the gap. [/show_to]
