Fast Track to Optimization: A Powerful Combination of Network Consolidation and Warehouse Automation has Resulted in a High Performance Supply Chain for Adidas, Writes Philip Makowski (Materials Handling‪)‬

For global brand, adidas, ensuring an efficient supply of its state-of-the-art sports footwear, apparel and accessories to its customers is a critical issue; one that has been tested in recent years by the rapid expansion of the business. In 2006, the acquisition of the Reebok brand presented the management team with both a challenge and an opportunity to redefine and restructure 'Area North' of its European distribution operation, serving leading retailers in the UK, Eire and Benelux. A comprehensive analysis of the merged company's distribution network highlighted the efficiencies that could be achieved through consolidating inventory from five key brands--adidas, Reebok, TaylorMade, Rockport and Ashworth--in one automated centralized distribution facility located in Trafford, Manchester, replacing a disparate structure of four conventional warehouses. In many respects, what made this unusual was the cultural shift that occurred within the company, away from a conventional approach to warehousing, to one embracing logistics automation technology. The benefits that have accrued from this [Pounds sterling]20 million investment in automation is now shaping the way adidas management is viewing its distribution strategy for Europe and wider markets. "Automation allows us to handle a lot of volume in a relatively small amount of space, which keeps overheads down," says Tim Adams, Global Business Solutions Warehousing, adidas Group. "Resource is another issue. We have a lot of peaks and troughs and smoothing labour during these periods is difficult, but automation allows us to flex the volume up and down accordingly." Beyond this, however, Adams sees that in recent years "automation has become far more flexible, enabling a range of possibilities from the picking of cartons, right down to an individual pair of shoes." And, importantly, too, "it allows for much greater accuracy.