FIFA and Adidas successfully using Social Media in Supply Chain Management and partnering since 1970

Adidas’ and FIFA’s relationship dates back 47years, and since 1970 Adidas has been supplying the official match ball for all FIFA World Cup™ matches. The partnership was recently extended until 2030 granting adidas the Official Partner, Supplier and Licensee rights for the FIFA World Cup™ and all FIFA events until 2030. The announcement was made during a ceremony in Moscow by Thierry Weil, FIFA Marketing Director and Herbert Hainer, Adidas Group CEO. Adidas wants to preserve its position as the number one seller of soccer gear worldwide.

In 2010 Adidas, was the first and only outfitter and licensee to disclose the list of suppliers/factories involved with the production of World Cup products of the 2010 FIFA World Cup South Africa™.

Adidas Supply Chain Structure

Adidas is currently outsourcing most of the production to more than 1,000 independent factories from around the world. Adidas products are manufactured in 63 countries and supply chain is global and multi-layered with different types of business partners, some are directly contracted factories, while others are not.

The top five countries per region and by number of supplier sites in 2016 were:

1. The Americas (26%): United States, Brazil, Argentina, Canada, and Mexico.
2. Asia (64%): China, Vietnam, Korea, Indonesia and Japan.
3. Europe, the Middle East and Africa (10%): Germany, Turkey, Italy, Spain and South Africa.

 The Power of Social Media and Supply Chain Management

Adidas has launched a #allin campaign on Twitter. The official World Cup 2014 soccer ball named the Brazuca was given its own Twitter handle (@brazuca) generating over 139,000 followers.

The Adidas Football YouTube channel has 350,000 subscribers and is host to various videos showcasing Lionel Messi, featuring the new Battle Pack cleats that were launched in conjunction with World Cup content. One of the videos features the Brazuca that was fitted with cameras into the ball that was sent on a World Journey.

In 2014 World Cup in Brazil the Adidas football Facebook page had over 17 million likes, containing pictures promotions, video links. Some of the promotions included signed soccer balls by designated players that could be won by customers by following Adidas soccer related Twitter accounts. This was a way for Adidas to connect to their customer base, fans and anyone interested in Soccer.

Adidas is using Social Media to Improve Supply Chain Management

The Sports Retail Industry is a highly competitive market and it is very important for companies to find new ways to streamline their operations, increase efficiencies, and optimize productivity in order to stay ahead of the competition.

Adidas Corporation is very active on Social Media sites such as Twitter, Facebook, Google+, Instagram and LinkedIn because it helps the organization to openly communicate with their customers, which helps them identify product demand, increase customer service, and customer engagement at various levels.

Adidas is doing a great job in achieving greater efficiency in supply chain management as it is paying attention to what happens within their local facilities as well as the entire chain of activities that is being completed by outside organizations to get a product to the end user.

Adidas is using Social Media to improve their organization’s Supply Chain Management globally by creating transparency, increased visibility, communications and quality control that leads to reduced operational and labor costs. In doing so they are also improving internal and external customer satisfaction.

Adidas Supply Chain Processes

In order to check if suppliers comply with their Workplace Standards, the Adidas SEA team and commissioned third-party experts visit and audit the factories they work with. To facilitate workplace improvements in factories they support their suppliers with training and capacity-building initiatives, either conducted by their own staff or by other stakeholders and third-party service providers.

Adidas checks on suppliers ensuring fair labour practices, fair wages and safe working conditions in the factories where Adidas Group products are manufactured. Suppliers need to comply with Adidas’ Workplace Standards and this is done through hundreds of annual factory audits. Adidas and independent organisations consistently review and evaluate supplier conduct, work with them to address issues and make improvements where necessary.

DIRECT COMMUNICATION WITH FACTORY WORKERS through the Adidas SMS Worker Hotline is filling the gap that sometimes exists between factory management and workers. The SMS workers’ grievance system enables anonymity and transparency in tracking complaints and allows remedial efforts by suppliers in real time. Workers find this process to send a message straightforward and, because it encourages prompt responses from management, workers know that their concerns are being heard. The Adidas SMS Worker Hotline is an independent service provider which ensures worker confidentiality.

Adidas Online Shopping initiative double sales in 24hours in Russia

From a recent online article published in Feb 2017 by Professor Carlos Cordon I read that in Russia, Adidas increased sales in Moscow by double digits in 24 hours, thanks to a supply chain initiative. Experts claim that supply chain management is about delivering the right quality at the lowest cost, with the agreed service level.

For Adidas Russia, the supply chain is no longer about reducing costs: It’s about increasing sales. Adidas applies digital technology to the supply chain rather than just to manufacturing. This is called Supply Chain 4.0, a term initially coined by supply chain professional Anne Wyss.

The digitization of the supply chain enables companies to address new customer requirements, the challenges on the supply side, and expectations in efficiency improvement.

Adidas as the leading sports’ shoe brand in Russia with over 1,200 stores implemented an Omni channel strategy as part of their strategy to please customers. The Omni channel strategy, allowed consumers to buy in a number of ways (on-line or in the physical store) any product that is available anywhere in Russia (whether in an Adidas shop, distribution center or warehouse). The channel strategy also allowed products to be delivered in any way (at home, at a store or at a pick-up point). This is possible thanks to the use of Radio-frequency identification ( RFID) chips, “ship from store” tools, a digital “click and collect” solution and “endless aisle” technology.

Initially, Adidas implemented a trial of click and collect in Moscow expecting that just a few consumers would choose this option to buy on-line and collect the product at a store. They expected around 10 to 20 orders per week, but consumers embraced the idea and orders reached 1,000 per week. Adidas was forced to stop the experiment and build the supply chain infrastructure needed to support such demand. Today, up to 70% of online sales are through click and collect. Similarly, other supply chain initiatives like ship from store, where goods ordered online are delivered from a store, not a distribution center, and endless aisle, in which customers can order products no longer in stock in their local store but is available in another store in another part of the country, have substantially increased sales and, logically, profits.

Interview with Dr. Carlos Cordon, LEGO Professor of Strategy and Supply Chain Management at IMD in Switzerland. He teaches in IMD’s Digital Supply Chain Management program

( reported the following on November 6^th, 2017 on the influence of Social Media on Supply Chain Management)

He reported that the “ use of social media to find out the colors and models that are going to be more fashionable the next season can improve forecasting. A better prediction of future sales makes the supply chain performance substantially better “

 



Soccer Ball history, design and sales

The first soccer ball was invented in 1855 by Charles Goodyear and it was made of rubber, however leather soccer balls were widely used in the late 1800’s. Two of the first companies to mass produce soccer balls at the beginning of the English Football League were Mitre and Thomlinson’s of Glasgow.

Normal soccer balls are shaped with 32 hexagon panels all stitched together, and the main difference with the ball used in the 2014 Brazil World Cup is it has only 6 panels no stitches as they are glued together. Because of the design this makes the 2014 Brazil World Cup ball the most aerodynamic ball in history.

” According to Adidas America’s director of soccer, Ernesto Bruce, creating the brazuca was a four-year process for adidas.  During that process, the ball was tested for over two-and-a-half years by more than 600 of the world’s top players across three continents, making it adidas’ most-tested ball. ”

 “ Engineering on the ball is through the roof, ” says Ernesto Bruce, Adidas’ head of soccer for North America.  “ Once again we introduced new technology. “

The success of the Adidas’s marketing campaign in Social Media worldwide is clear proof that adidas is and will remain the leading football brand.

The Official Match ball – Brazuca, is considered the most tested Adidas ball of all time. It was also considered a total success in terms of visibility, sales, and Twitter activity. According to many players Brazuca is considered one of the best balls they have ever played with.

Throughout the FIFA 2014 World Cup Soccer tournament, adidas created and shared content via its social media channels in real-time. Adidas’ goal was to be the most talked-about brand in Social Media during the 2014 FIFA World Cup and I believe they were very successful in this goal.

During the first twelve days of the event, the brand made significant steps towards achieving this goal, be it by growing the @brazuca twitter handle to over 2 million followers, by sharing content in highly debated moments during the FIFA 2014 World Cup games or by giving fans exclusive insights into adidas’ partners and federations.

Adidas was successful in selling over 14 million Brazuca footballs, which is 1 million more balls than in the 2010 FIFA World Cup in South Africa ™ (with 13 million balls sold featuring the Jabulani design).

 

Lessons for Others

Using modern technologies, such as social media, can improve organization’s supply chain management. It can create more visibility, improve communication, increase control, and reduce operational and labor costs. A more efficient and stable supply chain, can enhance customer satisfaction. The ripple effect of using social media to improve supply chain management can expand outwardly across virtually internal and external organizations, which is great for business.

If you have concerns as to the accuracy of anything posted on this site, please send your concerns to Peter Carr, Program Director, Social Media for Business Performance.

---

References