Comprehensive Report: Adidas Operations Management, Lean and Capacity

This report provides a comprehensive analysis of Adidas's operations management, focusing on its processes, lean implementation, and capacity management. The report begins with an executive summary and introduction, followed by a detailed examination of operations management principles as applied to Adidas, including the role of the operations manager. It then delves into process management, presenting a process chart illustrating the customer service process and inventory management. The report further explores lean management implementation and analyzes capacity management, highlighting Adidas's potential in the industry. The report also provides recommendations for the company's future development. The analysis includes an examination of the company's financial management, supply chain, and employee management. The report aims to provide insights into how Adidas aligns its operations with customer needs and maintains a competitive advantage in the global market. The report is a student assignment focusing on Adidas's strategies.

Running head: OPERATIONS MANAGEMENT
Operations management
Name of the student
Name of the university
Author’s note

1
OPERATIONS MANAGEMENT
Executive summary
The focus of the report is on the implementation of operations management and the ways in
which organisations can control its processes by utilisation of its operational facilities at the
organisation. The report is on Adidas, an excellent designer of shoes headquartered in
Germany. The analyses of the report are on the operations management of Adidas and the
role-played of the operations manager. The report provides a process chart that helps in
understanding the development of the customer service process at Adidas along with the
inventory management of the company. The implementation of lean management is provided
for the company along with an analysis of the capacity management, which highlights the
potential possessed by the company. Recommendations are provided for the proper
development of Adidas in the industry.

2
OPERATIONS MANAGEMENT
Table of Contents
Introduction................................................................................................................................3
Part A.........................................................................................................................................4
i) Operations management......................................................................................................4
ii) Process management..........................................................................................................9
iii) Lean management...........................................................................................................14
Part B........................................................................................................................................17
i) Capacity management.......................................................................................................17
Part C........................................................................................................................................20
Conclusion and recommendation.........................................................................................20
Bibliography.............................................................................................................................24

3
OPERATIONS MANAGEMENT
Introduction
Most corporate organisations emphasis on the marketing of products that are based on
the demands, needs and expectations of the customers. Hence, operations management in
these organisations play an important role in ensuring that alignment of business operations is
conducted that meets the needs of the customers. Mendling et al. (2018) is of the opinion that
the operations management is different organisations exist in three stages that includes
tactical, strategic and operational levels. Presently, the process adopted by organisations are
dependent on the capacity of every operations managers while trying to integrate the
operations associated with ever departments such as marketing, human resource as well as the
finance. The procurement of supply chain management is also undertaken in the process (Zur
and Shapiro 2015).
The role of every operation manger in business organisations is aimed at integrating
the different operational areas with the streamlines that are required for maintaining the
operations of an entire organisation. This is done to meet the needs and demands of the
customers. In the words of Vom Brocke, Petry and Gonser (2016) the requirements of every
customers are different and keeps on changing. Therefore, it is necessary to align the
operations that are not feasible based on requirements of the customers.
It is the duty of the managers to undertake the employment of the operations
management. This is done by taking into consideration the consultation along with the
requirements of the organisational and the industry standards. García-Fernández (2015) is of
the opinion that the evaluation of operational management provides ideas about the manner in
which each organisation can remain concerned with the needs of the customers. Peng et al.
(2016) proved the fact that the every standards of an industry constitute the standards of
every operation that are followed by the leading companies, which are based on its actions.

4
OPERATIONS MANAGEMENT
This research focuses on the erstwhile operations management of a company and is matches
it against the industry standards. The company in focus is Adidas, a popular shoe
manufacturing and designing company that is located in Germany.
The research purpose is to provide an explanation about the importance and
implementation of operational management in large multinational companies, which leads to
the satisfaction of the customers usually based on the products manufactured and served by
the concern company.
Adidas is a German multinational company that deals with the development of
branded shoes in the world. The company was founded in 1949 and since has been one of the
leading manufacturers of shoes in the world. The revenue of the company is approximately at
$21 billion dollars and the employee strength of the company is more than 56,000. Some of
the products that are developed by the company include the footwear, sports shoes, sports
equipments and so on. Apart from Germany, the popularity of Adidas is spread across the
world (Adidas.com 2019). Therefore, it can be said that the success of Adidas can be
attributed to its development of the operations and other factors such as capacity.
Part A
i) Operations management
Adidas is one of the biggest shoe manufacturers in the world and the operating
functions of the organisation need to be based on the recent changes that exist in the business
world. The operation functions that are adopted by Adidas can be characterised with the fact
that Adidas plays an important role for the development of the business process so that it can
make expansion in the product line of the company (Adidas.com 2019). In the words of Al-
Haddad and Kotnour (2015), it is stated that the biggest operating functions that Adidas

5
OPERATIONS MANAGEMENT
undertakes can be based on the evidenced from the fact that the company aims to maintain its
financial stature in an effective manner (Adidas.com 2019). The financial condition of Adidas
can be characterised with the fact that the company tries to ensure the intake of proper
revenue so that management of innovative strategies can take place at its stores (Adidas.com
2019).
Along with this, it can be evidenced that the modern practise of Adidas can be based
on the manufacturing of innovative and branded shoes that help in product development and
promotion of shoes (Adidas.com 2019). Adidas has managed to improve on its business
prowess and have managed to expand in countries all across the world with its exploits
(Adidas.com 2019). Hence, the current operational practise undertaken by Adidas can be
characterised by the fact that Adidas manages to develop its shoes based on the requirements
of the people (Adidas.com 2019). For example, people may demand to wear sports shoes and
thus, it is the duty of Adidas to fulfil he demand so that competitive advantage is maintained
in the company (Adidas.com 2019).
Therefore, it can be said that operations function of Adidas comprises of
understanding the needs and requirements of the customers and based on its various next
strategies are development that helps in its growth. Bhasin (2015) is of the opinion that
customer satisfaction is an important factor, which can assist in organisational growth. In the
case of Adidas, the demand made by the customers from all across the world needs to be
fulfilled in order to gain satisfaction.
Hence, proper financial management needs to be undertaken so that Adidas can
continue to develop its operations in the market by engaging in planning as well as
controlling the manufacturing and production activities. Therefore, evidence is provided
which helps Adidas to gain success, with the development of the raw materials for the

6
OPERATIONS MANAGEMENT
manufacturing of excellent quality shoes, which can be considered as a valuable goods and
service (Adidas.com 2019).
Hence, an analysis can be made about the role of an operations manager while trying
to link the present practise of Adidas with that of the standard practise that is followed in the
shoe manufacturing industry. The focus of this part along with comparison is made on the
duties of the operations manager at Adidas aiming to understand the current practises that are
encouraged by the managers.
The role of the operations manager at Adidas includes:
Encourage development of a big picture perspective: The mangers of Adidas are
responsible for maintaining the overall wellbeing of the operations of a company. Therefore,
Biazzo, Panizzolo and de Crescenzo (2016) is of the opinion that the perspective is taken into
account that provides to meet the demands and expectations of the customers. The managers
consider critically though process so that an analysis can be made about the situation that
exists in the currently phrase of the organisation. Hence, the decisions taken by Adidas
usually account for the best interest of the company.
Mitigate conflicts: It is considered as the duty of the managers to resolve the various
types of conflicts that can exist in the department of Adidas. For Adidas the operations
managers try to manage and maintain unity between the different departments and stores
associated with Adidas to ensure that conflict of interest does not exist at the workplace
(Adidas.com 2019). This can be termed as useful as the company can deal with the different
stores across different countries.
Scrutinise the financial information: Overseeing of the financial information can be
important for the operations manager mainly since the monitoring of the financial conditions

7
OPERATIONS MANAGEMENT
is required for preventing the departments from indulging in overspending of the products. As
suggested by Orzen and Bell (2016) the financial information that is related to business
require to be managed based on the evidence that cost benefit analysis can help in the
management processes at Adidas. Hence, for Adidas the financial information can be
considered as important role for the organisation development (Adidas.com 2019).
Monitor the inventory and supply chain: Cooper (2017) is of the opinion that the
supervision of the inventories related with the supply chain require to be done based on the
tracking and monitoring of the inventories within the organisation. In the case of Adidas, the
inventory development needs to be done for a steady supply chain management that is based
on the supply chain management owned by the company for continuous development of its
practises.
Monitor the full process: The supervision the operations process at Adidas needs to
be maintained by proper authorities so that failure in any of the process or department does
not exist (Adidas.com 2019). The operations manager need to develop the inventories in a
manner so that it can ensure the distribution to the customers is successfully completed.
Observations made by Kadarova and Demecko (2016) satisfaction of the employees need to
be specified based on a single process, in an entire organisation.
Manage work and employees: Managing the employees along with the workflow
need to be done based on the staffing requirements of Adidas. The development of the
operations management needs to be based on the collaboration with the HR managers while
recruiting the employees so that effective workflow can take place. In the case of Adidas, the
workflow and the employees contribute to its success (Adidas.com 2019).

8
OPERATIONS MANAGEMENT
From analysing the role of the operations managers, the key issue that Adidas
operating manager faces can be identified. The key issue faced by the company is that of the
excessive pressure in trying to supervise the entire work process.

9
Approval is provided
by Adidas for
meeting the
requirements and
approval of budgets
Customers purchase
from the retail outlet
Direct interaction between
the sellers and the
customers
Marketing department provides
information about the customers
Customer requirements are
communicated
N
YN
Production of branded
shoes as per customer
needs
Requirements of the
customers are provided
before the managers
Price set by the
managers of Adidas
Customer feedback is collected for development
Inventory management
Storage
Order placed to the inventory
Inventory is checked to identify if the custome
OPERATIONS MANAGEMENT
ii) Process management

10
OPERATIONS MANAGEMENT
Figure: Process chart of Adidas
(Source: Adidas.com 2019)
Process analysis and improvement: The analysis of the process chart of Adidas helps
in the continuation of the business process. It is necessary that the company follow the
development of its business practises so that analysis and improvement of the products can be
done on a regular basis (Adidas.com 2019). Plenert (2016) opines that the entire process
analysis is done regularly, that helps Adidas to make related changes based on the
development of its supply chain process along with the manufacturing process.
An example can be stated that facilitates the necessity of Adidas while analysing the
rate at which the inventory is checked to ensure that the production of the branded shoes are
made based on the requirements of the customers (Adidas.com 2019). Adidas need to
continue and develop its composure in the business process while trying to improve the
monitoring process for making the creating a flexible process chart (Adidas.com 2019). The
analysis can be done with the help of the operations manager and the HR managers of Adidas
can so that satisfaction of the demands of the customers can be made (Adidas.com 2019).
Hence, an improvement in the process can be made to ensure that Adidas continue
with the development of its process that is based on the flaws identified (Adidas.com 2019).
For example, it is necessary to check the inventory so that Adidas can ensure the
improvement of the process required for the smooth functioning of the organisation. The
suggestion for improvement is the maintenance of proper checklist so the managers of Adidas
can ensure that the requirements of the customers are met (Adidas.com 2019).
Customer service strategies: According to Minh (2015), the customer service
strategies are plan of action that is formulated to ensure that every customer remain satisfied.
In the case of Adidas, the customer satisfaction can be considered as an important factor,

11
OPERATIONS MANAGEMENT
which helps in understanding the company, and assists in the development of profit
(Adidas.com 2019). Hence, the strategies undertaken by Adidas, which helps the company in
its development, include:
Ensure development of an optimised training programme: In the words of
Agarwal and Sharma (2016), the customer satisfaction dependent on the services provided by
a company, which is based on the products and the quality of behaviour undertaken. At the
same time, Mandujano et al. (2017) agreed that proper training is required to be provided to
the employees that include behavioural lessons so that proper treatment of the customers can
be provided which provides a sense of effective bonding with the customers.
Select the correct tools: Adidas need to ensure that correct tools and techniques are
used for developing excellent customer services (Adidas.com 2019). The company can
employ people for every corner in the department stores to provide proper guidance that can
be related to the characteristics of the branded shoes (Adidas.com 2019).
Personalise the experience: Customers need to be provided with personalised
experience to maintain the loyalty of the products. As stated by Schniederjans et al. (2018)
every personal experience of the customers needs to be provided by ensuring regular
conversation via emails or provide notifications during the launch of new products
manufactured in the market. Adidas also can make personal calls to the customers or provide
text messages to convey similar information (Adidas.com 2019).
Inventory management: Inventory management is the technique of supervision,
which consists of the non-capitalised assets like the inventory and the stock items. Alagaraja
(2017) opines that inventory management can be considered important feature of supply
chain management as it helps in supervising the flow of goods from the manufacturers to the
warehouses. From the analysis of the process chart, in the case of Adidas, the inventory