Analyzing Adidas' Supply Network and Addressing Challenges

The assignment provides an in-depth analysis of Adidas' supply chain, including the company's history, product overview, major competitors, and stages of product supply chain. It also highlights problems in the supply chain, such as third-party manufacturing and slavery in two-tier suppliers, and proposes solutions to address these challenges.

Supply Network
A recent purchase for me was a piece of clothing from Adidas. This paper shall discuss the
supply network of the product from the raw material until I (the consumer) purchased it.
Company Overview
The piece of clothing was from Adidas. Adidas is a well known brand dealing with sports
apparel, accessories, backpacks, footwear and sports equipment etc. The company was set up by
Adolf Dassler in Herzogenaurach, Germany in the year 1949.
Product Overview
The clothing item was a printed t-shirt. Adidas further branches out into various sub brands such
as Adidas originals, Adidas Neo etc. The printed t-shirt is an Adidas Originals item. Adidas
Originals is known for being more fashion forward than the rest of the sub brands. Adidas has
collaborated with a number of celebrities and fashion designers such as Stella McCartney,
Pharell Williams, Raf Simons, Kanye West and Rick Owens etc. (Milnes 2016).
Major Competitors
Adidas' major competitors are Nike, Puma, Fila and Converse. Nike is the toughest competitor
while Puma has a special history with Adidas as Puma was founded by Adolf Dassler 's brother,
Rudolf Dassler after they disagreed upon how they wanted to conduct their business together as
Dassler Brothers Shoe Factory.
Stages of Product Supply Chain
Adidas is a globally recognized brand and has manufacturing units in a number of countries.
Adidas indulges in third party manufacturing especially in Asian countries. Therefore,
manufacturing units are located in countries like China, India etc. Right now most of Adidas’
footwear sourcing is in Asia, with production taking place in China, Cambodia, Laos, and
Vietnam (Gunn 2015). But the company is planning to bring production back to Germany.
Adidas also sells its products online.
Supplier Customer Relationship

Adidas has a more complex supplier customer relationship than most other companies. Adidas’
tier 1 suppliers are the factories that assembles products that directly sell for retail, while tier 2
suppliers supply materials and components to those tier 1 suppliers, such as dyes and cloth, and
tier 3 are the raw material suppliers (Lee, Ramasamy & Rhee 2014).
Problems in Supply Chain
Currently, Adidas is facing two problems. First is that of third party manufacturing and the
second if slavery in two-tier suppliers. Due to third party manufacturing the brand loses out on
customers as they do not trust the quality of products they receive from third party
manufacturers. Modern slavery capacity building workshops were held, during which, high-risk
practices such as retention of identity documents or the partial withholding of worker salaries, as
a forced measure of saving, were identified (Russell 2018).
Adidas has already begun working closely with first tier suppliers in order to reach the lower
tiers and eradicate the root of the problem (Churchill 2016). It must continue its efforts to train
suppliers on forced labor issues so that slavery can be eradicated completely. As for
manufacturing through third parties, Adidas should instead highly consider bringing back

production units to Germany and United States as Germany is where the company was originally
founded.
REFERENCES-
Churchill, F 2016, Adidas reveals training is key to tackling slavery, viewed 14
March 2018, Available from
<https://www.cips.org/supply-management/news/2016/december/adidas-tops-anti-
supply-chain-slavery-ranking/>.
Gunn, M 2015, How Adidas Wants to Take a Shoe From Idea to Store Shelf in 45
Days, viewed 14 March 2018, Available from
<http://www.gtnexus.com/resources/blog-posts/adidas-agile-supply-chain>.
Lee, SY, Ramasamy, A & Rhee, JH 2014, Green Leadership in China: Management
Strategies from China's Most Responsible Companies, Springer Heidelberg, London.
Milnes, H 2016, How Adidas Originals surpassed Adidas on social media, viewed 14
March 2018, Available From <https://digiday.com/marketing/retailcontentstrategies-
adidas-originals-surpassed-adidas-social-media/amp/>.
Russell, M 2018, Adidas turns anti-slavery focus on two-tier suppliers, viewed 14
March 2018, Available from <https://www.just-style.com/news/adidas-turns-anti-
slavery-focus-on-tier-two-suppliers_id133023.aspx>.