Introduction

This report basically assesses the difficulties organization confront in incorporating the
opportunities of internationalization, while developing sustainable practices inside the field of
logistics and supply chain management. The paper shows benefits and opportunities of
companies going global and also explains risks that the company might have to face. It also
explains pull and push factors affecting internationalization. Sustainable practices that the
company can apply to not only sustain in the industry but developing themselves as a brand is
discussed properly in this paper. Factors affecting sustainability are also discussed in this report.
The report also covers various aspects of logistics and supply chain management.
This report focuses on Adidas Group and challenges that the company has faced in order to
achieve the benefits of both internationalization and sustainability.
Internationalization:
Internationalization is one of the most important trends in manufacturing and retailing business.
Demolishing borders, barriers like physical, cultural, political, social, geographical, religions, etc
to collaborate, share ideas and perform commerce between people, companies and organization
is known as internationalization. Many companies have stayed focused in their local markets
thinking that local markets offers not only opportunities but safety as well, holding them
competing internationally.
Today many companies earn outstanding share of their revenue in international market.
Internationalization is driven by various push and pull factors (Hauf and ). Important push
factors have to be limited local market, saturated market. Due to such issues internationalization
to a company is necessity to grow rather than an option. Pull factors have to be increasing
purchasing power and demand of the consumers especially in Eastern market i.e. Asia. The
determinant of whether a company operates pull or push strategy are uncertain demand and
economies of scale.
Starting business oversees can have both benefits and risks. LSCM means delivering the right
product with the right documentation in the right quantity and condition, at the right price at the
right time to the right place. Internationalization of such LSCM means reaching geographically
scattered customer base efficiently. Some of the benefits are reducing inventory, finding ways to
supply goods to customer better, faster and cheaper; lowers operating expenses as well as
logistics expenses by consolidating shipments, timely planning for manufacturing, retailing
fulfillment. Due to complete visibility, there is a reduced cost that allows business to work
smarter and shortens lead time supply chain provides competitive advantages to all retailers.
While dealing globally LSCM business have to deal with many issues. In order to be an efficient
supply chain management the company should have properly structured process and have to be
transparent. Some of the risks that the companies might face are supply risk like change in lead
time, delays in transportation, outsourcing issues and dependence upon few suppliers. Process

risks like warehouse problem and inflexible process. Some demand risk like varying demand,
loss of customer base, competitors and inaccurate forecast. Some network and control risks like
theft, piracy, data loss, and ineffective communication. Environmental risk like change in
economy, natural disasters, strike, exchanges rates, uncertain government, lack of human
resources, capital etc.
Sustainability:
Operating company in long run means more challenges for supply chain managers and requires
strategic management expertise. Challenges like globalization, intensive competition, scarcity of
resources, increasing demand hence reliable, flexible and cost efficient system is required to exist
in such environment. In order to tackle such issues supply chain company have to be able to
identify and understand the sustainability issue in their business environment.
P. Nanjund Pratap said, Sustainability defines the life line of any organization.
Sustainability is not just limited to the environmental scope rather it also deals with development
and the economy. It not only maintains but enhances the value that depends on sound
environment.
In other word sustainability can be define as capability of business to continue and operate
successfully i.e. to meet stakeholders expectation generating sufficient and appropriate
economic activity.
Some of the factors that drive a company to use sustainable practices are some push factors that
include expectation of investors as every investor expect their company to run for longer.
Demands of the community, employees priorities, political pressure as well as general public are
some of the pull factors that drive the company. Whereas pull factors includes the availability of
workable and consistent frameworks, platform for pride and positive workers engagement,
operational efficiencies due to focus on sustainable practices. Some benefits of sustainability are
as follows

Better processes and systems

Adidas Group

Adidas, a German multinational corporation which designs and manufactures sports clothing and
accessories. It was founded by Adolf Dassler in 1948. Adidas group consist of Reebok
sportswear, Rockport, Gulf Company and Taylor Made Adidas Company. It is the largest
manufacturer in Europe and second largest in the world.
Before the huge expansion Adidas used to produce all shoes and apparel on its own. Within last
decades it does not produce all the apparel on its own. Today it own 9 factories where some of its
products are produce. In Europe it produces 27% similarly in Asia and America it produces 51%
and 22% respectively. Moreover, almost 615 main suppliers are from around the globe. In order
to remain competitive Adidas transferred its production overseas to Asia in 1993. Most of the
products like sports material, shoes are produced in Asian countries.
Being one of the global leader in sporting goods industry, transportation plays very important in
their development. Transportation is the physical link that connects the company with its
suppliers and customers( lambert, stock and ellran 2006).
www.academis.edu/7484819/logistic Adidas
Adidas use international water carrier such as general cargo ships to transfer their products. for
high demands, larger quantity orders Adidas utilize Air carriers as well. motor carriers are
generally use by Adidas as a means of transportation to deliver their products to their retailers.
however, an European supply chain specialist named Total Logistics has been providing supply
chain solution to Adidas. Adidas's operations in Northern European were part between four
traditional distribution centers s, every utilizing diverse frameworks and procedures.
What actually sustainability means for Adidas Company is that. In this evolving world changes
like advancement of technology, political instability, unrest regions and many more are
happening. So in order to response to those issues, the sustainability strategy has to be constantly
review and evolve to dodge such issues. Some of the highlights are as follows
People

Adidas launched the SMS for workers project at the end of 2012, which was later
introduced to total of twenty-five factories in Indonesia and Vietnam covering up to
160000 factory workers by now.

Product

Adidas Company used more sustainable cotton in 2014 as the company sourced more
than 30% of all its cotton as Better Cotton which even exceeds 25% target that they
originally planned. They have committed of product by 2018.
The one of the focus of the company is saving water. In 2013 two million yard of Dry
Dye fabric produce as the product offer integrating Dry Dye fabric has gradually
increasing by the end of 2014, 4 million yards, saving 100 million liters of water.

Planet

Adidas opened its first green retail concept in Nuremberg, Germany.

Partnership

Adidas group and blue sign technologies entered into a strategic partnership to impose its
chemical management program. Benefits such as more responsible use of resources while
manufacturing process is the result of this partnership.

Critical Analysis
Until industrial revolution, people used to manufacture or repair their own clothes. Invention of
machinery contributed garment industry to mass production. At that time cotton was the most
important textile and due to the improvement in transportation transferring product was possible
all over the world. But the wider the consumer base like demanding consumer, demanding
designer increased in high pace. With the increment in demand, production increases and as the
production rises, job opportunities increases. This potentially started manufacturing clothes in
developing countries which raises some issues like competitive price, political stability,
infrastructures, and human rights and so on.
For instance countries such as Laos, Cambodia, Pakistan and Vietnam became some of the
interesting sources. From the mentioned condition sourcing countries not only had advantage
from the job and economic growth challenges increases as well like poor working condition
environment performance, human rights abuses. These challenges can sometimes affect the job
created by the company and the countrys economy. So in order to handle all those issues, the
Adidas group strongly believes that long term partnerships with its suppliers are of utmost
importance.
http://www.adidas-group.com.en/group/stories/we- do-not-buy-we-source/
Our sourcing strategy embodies the very spirit in this company is built upon, only the best for
the athletes. We do not simply buy products from our supplier but we instead have built
outstanding long term partnerships, with them which ultimately allow us to develop and bring

the best-performing product to market. John McNamara, Adidas Group Senior Vice President
for Sourcing
For example the company celebrated more than 25 years of sourcing in Indonesia this year. In
fact, the companys business in Indonesia, Vietnam and Cambodia has been growing. The wage
has been increased over the period of 2011 to 2013, up to 45% in Vietnam and 54% in Indonesia.
Rather than changing to maximize more profit, it is these long term partnerships that have greater
advantages for both parties. Adidas also work close with their supplier to develop innovation. For
instance Brazuca, Fifa World Cup 2014 iconic ball which was produced by long term supplier of
Adidas called Longway. And the reason Adidas choose Longway was not just business motive
but their long term relationship. They have been associated with each other since 1997, since
then Longrun has established as an expert in production of high-tech ball and in 2006 Longrun
and Adidas set up Centre of Excellence where Brazuca was invented.
Adidas relationship with suppliers is guided by company Workplace standards which contains
fair wages, working hours, freedom f association, and child labor. Adidas had worked with over
1000 factories from all over the world in order to improve working conditions that led to writing
of Workplace Standards. A factory situated in El Salvador failed to compensate employees and
closed because of which $800000 in back pay and severances was paid in 2005. After
subcontracting with Adidas. El Salvadorian factor violated the universitys Code of Conduct with
Adidas.
An investigation of the blended organization's dispersion system highlighted that an introductory
interest in store network legitimization would accomplish economies of scale, giving advantages
which could shape the Adidas appropriation method for Europe and more extensive markets.
Total Logistics, selected as lead advisors on the undertaking, suggested and administered the
legitimization of four dispersion focuses into a solitary 20 million mechanized site in Trafford
Park, Manchester. Taking after Total Logistics' proposal, they built up an idea for a 30,000 m2
completely robotized office. This was executed in only 18 months, including the usage of
another distribution center administration framework. The robotized framework handles more
than 65,000 SKUs and has permitted the territory distributed to manual picking to be cut by 66%.
More than 40,000 loose products can now be picked every day. Furthermore, as an aftereffect of
the space investment funds, contracted-out quality included administrations have been suited in
house. The venture expanded profitability and brought down the expense base for conveyance in
the UK, surpassing the advantages expressed in the business case.
Tim Adams, worldwide warehousing task chief, Adidas, is charged with the accomplishment of
the undertaking; Due to sheer volume, size and complexity, the project was seen as a
tremendous challenge from the outset. Our expectations of the projects value were exceeded and
the independent contribution made by Total Logistics was invaluable.

, size and complexity, the project was seen as a tremendous challenge from the outset. Our
expectations of the projects value were exceeded and the independent contribution made by
Total Logistics was invaluable.; Due to sheer volume, size and complexity, the project was
seen as a tremendous challenge from the outset. Our expectations of the projects value were
exceeded and the independent contribution made by Total Logistics was invaluable.