OPERATIONAL ANALYSIS: INVENTORY MANAGEMENT
EXECUTIVE SUMMARY 2
IMPACT OF OPERATIONAL AREA ON ORGANIZATION PERFORMANCE 3
ADIDAS ANALYTICAL CAPABILITIES 3
KEY VARIABLES 4
ABC ANALYSIS 4
ECONOMIC ORDER QUANTITY 5
LIMITATION OF THE ANALYSIS 6
UNDERSUPPLY AND OVER-SUPPLY 6
RISK OF LOSS 6
CONFLICTS WITH OTHER COST SYSTEMS 6
REFERENCE LIST 8
This report will focus on Adidas analytical capabilities for the inventory management system. First an introduction will be provided where it will discuss the company’s current situation and from their it will focus on its inventory management system. Analytical capabilities will be discussed as of how Adidas took advantage of those and integration within their system to become one of the market leaders. Through their abilities and their future plans, we will be able to determine the key variables that majorly affects their operations for the inventory management. Those variables will further be used through the ABC analysis which will help us to determine their major products for their improved inventory management system. Furthermore, Economic order quantity will also be discussed that will help to understand the import orders needed for those operations. Limitations will also be provided for an in-depth discussion and finally a conclusion will be provided to summarize the entire report.
Adidas, founded in 1924, is considered as a global leader in the sporting goods industry. The company’s headquarter is based in Germany and they have a wide portfolio of apparel and footwear (Adidas 2019). By the end of 2017, the company had 2452 stores and around 136 collaborations worldwide. Moreover, They sold 403m pair of shoes and 404m units of apparel in that 2017 which greatly boosted their sales (Statista 2019). Adidas operates in one of the most faced paced market and with competitors such as Nike, Puma and Under Armour, Adidas does not have a single space of error. In order to stay on top of the market, Adidas focuses majorly on the internal factors and has set out strategic plans to achieve maximum efficiency through their operations.
IMPACT OF OPERATIONAL AREA ON ORGANIZATION PERFORMANCE
Operational area deals with activities that create value in the form of services and good and if carefully manages the process so that those finished goods and services can be converted to profitable output. Operational area are not just meant to convert raw material to finished goods/services but they deal with almost every area related to customer data, IT support services, Data storage, stores, distribution, production time, employee management, manufacturing etc (Battistoni et al, 2013) (PDF in downloads – 45698).
For Adidas to maintain their organizational performance, their major operations deal with maintaining their “INVENTORY” where they can meet the demand of their customers on time while having little to no loss through excessive stock. The b...