{"id":21875,"date":"2017-11-13T18:42:19","date_gmt":"2017-11-13T23:42:19","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/adidas-revolutionizing-the-supply-chain-with-speedfactory\/"},"modified":"2017-11-13T19:02:37","modified_gmt":"2017-11-14T00:02:37","slug":"adidas-revolutionizing-the-supply-chain-with-speedfactory","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/adidas-revolutionizing-the-supply-chain-with-speedfactory\/","title":{"rendered":"Adidas: Revolutionizing the Supply Chain with SPEEDFACTORY"},"content":{"rendered":"

Speed is Key<\/strong><\/p>\n

Adidas operates in a dynamic and fast-moving fashion industry, where speed is key. The athletic footwear industry has expanded in the broader fashion market with more focus on design and diverse offerings. Increasing technology and digitalization are transforming the traditional fashion supply chain, putting pressure on retailers to increase their speed to market. At the same time, the end consumers are driving the supply chain. To gain competitive advantage, Adidas needs to constantly provide new and relevant products by anticipating customer demands and responding accordingly.<\/p>\n

Along with the digitalization challenge, Adidas\u2019s global manufacturing chain has become a hindrance as it typically takes Adidas 12 to 18 months to design, produce, and deliver a finished good. [1] In order to cover the development and manufacturing costs, Adidas needs to produce batches of 50,000 to 100,000 of shoes for one production run. [2] The inability to satisfy the increasingly demanding consumers can lead to inventory risk, over-production, high level of clearance, brand damage \u2013 and ultimately lead to liquidity and financial problems.<\/p>\n

Becoming the True Fast Sports Company<\/strong><\/p>\n

To react quickly to consumer demands, Adidas is highly committed to building innovative manufacturing technologies and to making improvements in digitalization process at every stage of the supply chain. In fact, one of Adidas\u2019s three strategic pillars is speed. Its mission is to become the first \u201ctrue fast sports company\u201d by 2020. [1]<\/p>\n

SPEEDFACTORY project<\/u><\/p>\n

In 2016, Adidas launched SPEEDFACTORY pilot project in Germany, a smart manufacturing process via robotic automation that integrates the design and production process tailored to specific markets. [1] This was developed to bring production closer to the market and accelerate building relationship with the customers by responding faster to volatile trends. Traditionally, Adidas would manufacture across specialized factories in different cities and countries, but this re-designed process allows Adidas to concentrate most of the supply chain in one location. [3]<\/p>\n

Adidas utilizes data analytics and 3D technology to create shoes that are customized to the fit and functional needs of consumers. The 3D technology enables more frequent and rapid virtual product iterations without need for physical samples. Adidas also leverages the motion-capture equipment and applies it to human body to monitor the walking and running movements. [4] Most importantly, Adidas engages consumers earlier in the process. Prototypes can be tested quickly with consumers allowing Adidas to incorporate feedback into the next design iteration without the risk of excess stock or price mark-downs.<\/p>\n

Key differentiation points<\/strong><\/p>\n