Literature Review on Sports Direct and Industry 4.0 in Supply Chain

This report presents a comprehensive literature review focusing on the impact of Industry 4.0 on the supply chain operations of Sports Direct, a major UK sports goods retailer. The report begins by establishing the scenario, describing Sports Direct's business model, products, and customer base. It then delves into a detailed literature review, charting the evolution of the Fourth Industrial Revolution, referencing key academic journals and studies. The review covers aspects such as the current trends in sportswear sales, the rise of female athletic outfits, the influence of fashion designers on sports apparel, celebrity endorsements, and the health and wellness trend. Furthermore, the report replicates Szozda's case study to analyze how Industry 4.0 technologies, including automation, data processing, and cyber-physical systems, can be applied to enhance Sports Direct's supply chain. The analysis explores the challenges and opportunities presented by Industry 4.0, emphasizing the importance of communication and the adoption of lean production processes for improved efficiency and customer satisfaction.

Running head: LITERATURE REVIEW
Literature Review
Name of the Student
Name of the University
Author Note

1LITERATURE REVIEW
Table of Content
Introduction................................................................................................................................2
1. Establishing the scenario for the report..................................................................................2
2. Literature Review-.................................................................................................................3
2.1 Current trend of sportswear sales in UK..........................................................................3
2.2 Rise in sales volume of Female athletic outfits................................................................4
2.3 The increasing attention of fashion designers towards sports apparels that promotes
“athleisure”.............................................................................................................................4
2.4 Publicity from the Celebrities..........................................................................................5
2.5 Health and Wellness trend...............................................................................................5
3. Replicating Szozda’s case study............................................................................................5
References..................................................................................................................................8

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Introduction
This report provides an analysis of the organization and its operational strategies and
an evaluation of Fourth Industrial revolution. The report includes three different sections
starting from a particular scenario including Sportsdirect, its products and customers. Report
also includes a case study on Szozoda which is further aligned with the organization
Sportdirect to show its relevance. The review of existing literature has been performed
considering 10 peer reviewed journals that have been performed on technology advancement
and its use in today’s business. This report also shows how the emerging technologies can be
adopted to the business operation of Sportsdirect.
1. Establishing the scenario for the report
Sports Direct Plc. is an exponential sports goods retailing organisation. The
organisation founded by Mike Ashley, is the biggest5 sports goods retailer throughout United
Kingdom, operating through 670 registered and 120 franchise stores (sportsdirectplc.com,
2018). The business transactions of the company takes place predominantly under the banner
of SportsDirect.com. The company also owns Flagship brands like Lonsdale, Donnay and
Slazenger. The company has a listing in the LSE and also in 250 Index of FTSE stock listings
(sportsdirectplc.com, 2018). In the Sports Retail domain of UK, the company delivers an
unrivalled range to the customers. The products include the likes of sporting apparel and
footwear. Since the organisation chiefly operates through third party brands, the company
aims to have a strong presence in the local market.
The business goals of the company ranges from medium to long term. The tagline of
SportsDirect.com is ‘Selfridges’ of sports retail’. This reflects the company’s determination
to operate a widespread business domain serving customers with products that are technically
innovative and serves for multiple sports purpose and the customers are able to choose from

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among various designs and prices ranges catered to them by the subsidiary brands under the
parent company SportsDirect.com (sportsdirectplc.com, 2018). The company owned flagship
stores are spacious (about 40,000 sq. ft.|) and are of sufficient scale and are also situated in
ideal locations. The industrial position of the company in UK is well poised to ensure long
term business sustenance and profitability. The elevation plan of the company is based upon
including sports apparel and accessories brands their partners from all over the world thereby
increasing the span of versatility in product range in the online as well as in the physical
flagship stores. The customer base of the company is also swelling on a regular basis.
The primary customer groups of the products of Sports Direct are Fitness and Fashion
conscious people of UK, which includes the athletes and the professional sportsperson. Other
than that the products of Sports Direct are also availed by Professional Sports trainers
(sportsdirectplc.com, 2018). Besides, young Familied persons who have fitness as a trend in
their families are also regular customers of the products of Sports Direct. There are definite
reasons why the company have been able to entice these customer groups. As opined by Dai
and Chen (2017), the customer groups have two shopping traits in particular in them. They
have high level of disposable income and they prefer products that come in wide ranges
(price, design and quality also). New and product designs, brands with variable price ranges
and high availability of products makes the brand compatible and popular also, for wide
customer ranges around the globe.
2. Literature Review-
2.1 Current trend of sportswear sales in UK
Sportswear sales in UK in 2017-2018 Fiscal year have surpassed £6bn as the bridge
between the athletics clothes designing and high fashion outlook is gradually diminishing.
Following this trend, various existing peers of the Fashion industry have stepped into the

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sports apparel retailing industry (Szozda, 2017). According to the data provided by Hu and
Lu (2015), this accounted for 11% increase in the sales of sports apparel and accessories in
UK. This prompted the exponents of Sports goods industry like Puma, Nike and other to
outsource pro9hduction orders to Asian countries, where the product manufacturing cost is
lower owing to cheap labour and raw materials. The example of Nike can be cited as an
evidence here. In 2015, the organisation started operating 700 physical flagship stores in UK
which showcased sports goods that came manufactured from factories (franchised) in
countries like China, Taiwan, Indonesia and India. This marketing strategy helped the
companies to manage the big customer bases and parallely reduce the operational cost also
(nike.com, 2018).
2.2 Rise in sales volume of Female athletic outfits
The average sales of sportswear in the British companies increased by 9.5pc to a
value of £5.9bn from 2012 to 2016 (Stride et al. 2015). Analysing the trends that were
accountable for the increase in volumes, McLoughlin and Hayes (2015), informed that there
have been an increase in 11pc increase of manufacture and 14pc increase in the sales of
women’s sports attires. According to the evidences acquired by Hu and Lu (2015), the sales
growth have been shooting high since the advent of the Olympics in 2012. The increase up to
2011 in the sale4s volume of sports goods of all sorts have been only 1.9pc.
2.3 The increasing attention of fashion designers towards sports apparels that promotes
“athleisure”
The British community have largely adapted the trend of staying fit and healthy. The
British apparel designers have taken this as an opportunity to design more products that have
an athletic outlook. According to Power (2017), the most searched for “term” in the online
apparel retailing sites of UK in the year 2017 have been “Yoga Leggings”. Empirical
literature suggest that despite a business sell out in m2012, the organisation Lululemon have

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been able to gain of share price by 227pc over the past 5 years (Sarkar, 2017). This makes it
evident that the customer base for the sports apparels, sports footwear and accessories have
increased largely in the latter half of the ongoing decade.
2.4 Publicity from the Celebrities
Many famous celebrities have started endorsing sports goods including apparels and
footwear. The example of Michael Jordan can be cited as evidence. He allowed his name to
be used in a sports good range of Puma Company. In the last year also, celebs like Beyoncé
have launched new athletic products range for a number of designers and big sports goods
retailing companies. Caribbean British singer Rihanna also signed up as the creative director
of the Women’s sports good range of Adidas in the previous year. Another active wear retail
organisation called Top Shop have launched a Sports wear brand inspired by Beyoncé.
2.5 Health and Wellness trend
About 75% of the customers of sports apparels and footwear have been visiting
gymnasiums, at lets once every week. According to the findings of Rashid and Barnes
(2017), about 53% of the retail customers of apparel and accessories have started involving
themselves with some sort of active sports every week. This excludes people playing golf on
weekends and vacations. People of UK have started to tale the concept of “NO Pain No
Gain” very religiously and they have taken up the mantra to exercise for staying fit and
disease free.
3. Replicating Szozda’s case study
The case study indicates that technological evolution occurs in a periodical stage in
which each stage brings a new trend of technology adoption. For example, as per the case
study, 19th century is the age of steam and electricity which is known as the Second Industrial
Revolution. Likewise, with the flow of this rapid technological development, the scientist

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have new ideas to use technology in a more proper and convenient way. According to the
findings of Szozda’s case study, the Industrial Revolution may include computerization,
consumption of new energy source, and automation of work processes. However, this rapid
technology evolution provides knowledge about the use of telecommunication, which has
become a new means of building business in a more convenient way. For example, after the
Second World War, through the industrial revolution business got the ideas of
telecommunication and computerization. Computerization is probably a mass invention
which facilitated the process of approaching people in business. Computerization leads to
internet technology web 2.0 which further leads to digitalization.
With the help of digitalization, Sportsdirect and many other similar business are able
to reach the customers in the remote areas in the shortest possible time. The case study also
indicates that in 2007 lean manufacturing process was introduced by Taiichi Ohno and Ejii
Toyoda in Toyota automotive plants. Particularly, the industry 4.0 which was started in
Germany in 2011 is a significant breakthrough in the business industry. Nonetheless, this
initiative mainly comes from a government project inclined to promote computerization of
manufacturing techniques. Stride et al. (2015) argued that this electronic flow of production
process coming out of 4.0 industry remained difficult for business for a long time. For
example, even though, sportsdirect adopted computerization and its form- digitalization to
promote the business and gain more exposure but this organization is yet to adopt this
electronic flow of production process which would have increased the speed of
manufacturing.
The case study also indicates that industry 4.0 does have contribution to distribution
and procurement. A significant aspect of industry 4.0 is a General Electric insists on the role
of integration of complex physical machinery as well as devices with the sensors of network,
software and a better control for a better business outcomes (Szozda 2017). Nonetheless,

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these ideas can be applied to the case of Sportsdirect because in the recent past, Sportsdirect
had to bear a significant loss due to slow of mode of manufacturing. According to the case
study, when the supply chain concept was derived, its meaning and the way of perceiving has
undergone some significant transformation. However, this initial concept of supply chain
does not include the fact of lean production process which helps greatly to gain a control on
the waste materials helping business to reduce the cost of manufacturing and the overall
operation. With the launch lean production process, may businesses including sportsdirect
have adopted the concept and the business to a greater scale is able to process the waste
management. As per the case study, recent or the contemporary supply chain are usually not
divided into lean, agile or flexible. Particularly, the idea of migratory supply chain is applied
with the activity taking the help of the strategy of production to customer orders. It might
amalgamates both agile and lean supply chain management. The process further indicates that
the customer initiatives activities tend to undertake in a supply chain as well as generated its
own structure. Nevertheless, in the case of Sportsdirect, it is identified that, the organization
is seen to be giving more importance to values and policies. For example, the organization
does have a zero tolerance policy. Likewise, there are other policies adopted by Sportsdirect
to make a transparent supply chain process but the organisation gives mere attention to
implementation practice of supply chain.
The findings of the case study also implies that communication is a significant aspect
in developing interaction between the links of a supply chain running based on the principles
of Fourth Industrial Revolution. Thus, it is highly necessary for business to pay attention to
communication in the field of supply chain as, communication helps to keep the supply chain
network uninterrupted. Furthermore, it is often identified that supply chain processes are
changing and adopting new trends to make process more convenient and smoother. However,
the implementation has never been an easy process to adopt because many small and medium

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size firms are yet to go with the trends or incorporate them into business but the large
businesses in this field are accustomed to the changing supply chain processes.
References
Dai, X. and Chen, K.C., 2017. Examining Antecedents of Brand Loyalty on Sportswear: An
Empirical Investigation of University Students in Hong Kong. Int'l J. Soc. Sci. Stud., 5, p.87.
Horton, K., Ferrero-Regis, T. and Payne, A., 2016. The hard work of leisure: healthy life,
activewear and Lorna Jane. Annals of Leisure Research, 19(2), pp.180-193.
Hu, J. and Lu, J., 2015. Recent developments in elastic fibers and yarns for sportswear. In
Textiles for Sportswear (pp. 53-76).
McLoughlin, J. and Hayes, S., 2015. Manchester Metropolitan University, Manchester, UK.
Textiles for Sportswear, p.119.
nike.com, (2018). About the company. Available at: https://www.nike.com/in/en_gb/
[Accessed: 05 July 2018]
Power, E.J., 2017. Advanced knitting technologies for high-performance apparel. In High-
Performance Apparel (pp. 113-127).
Rashid, A. and Barnes, L., 2017. Country of Origin: Reshoring Implication in the Context of
the UK Fashion Industry. In Reshoring of Manufacturing (pp. 183-201). Springer, Cham.
Sarkar, K., 2017. Developing revamp strategies for TRU sports and increase option mix of
TRU. NIFT-Mumbai.
sportsdirectplc.com, (2018). About the Company. Available at:
http://www.sportsdirectplc.com/ [Accessed: 05 June 2018]

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Stride, C., Williams, J., Moor, D. and Catley, N., 2015. From sportswear to leisurewear: The
evolution of English football league shirt design in the replica kit era. Sport in History, 35(1),
pp.156-194.
Szozda, N., 2017. Industry 4.0 and its impact on the functioning of supply
chains. LogForum, 13.