Sports Brand Reform Order System To Speed Up Supply Chain

It is an indisputable fact that the sports goods industry in China is facing a crisis in P.

The first part of this series has combed the status quo of the industry from the perspective of financial data.

Cleaning up inventory and optimizing the channel structure will be the main theme of the past two years.

But after these two tasks are completed, can sports brands get out of the shadows? We are skeptical.

After all, the weather has changed! < /p >

< p > after the rapid expansion of the previous two years, the domestic sports goods market has shifted from a seller's market to a buyer's market. In this era of oversupply, the sales of products depend more on timely caters to consumers.

Therefore, a faster supply chain seems to be a bright road.

But is the road flat or tortuous? Let's analyze one or two.

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< p > < strong > reforming order system to accelerate supply chain < /strong > /p >

< p > sports products are generally divided into four seasons. The process of product listing cycle is similar, but the starting and ending time is different.

Take Anta as an example, the time for new products to be listed is: the first quarter is the beginning of January; the second quarter is the end of March and the beginning of April; the third quarter is the beginning of June and the beginning of July; the fourth season is the beginning of September.

Accordingly, the order will be held 4 times a year, about 6 months before the launch of the new product.

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< p > ordering system originates from wholesale mode.

Distributors (channel providers) need to see the samples of the quarterly products before deciding the order. After the distributor has placed the order, the brand can organize the production, complete the production and distribute it to the terminal for sale.

At present, the sports brands in the domestic market, including Nike and Adidas, are mainly sold by wholesale mode, so the order system will continue to exist for a long time.

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< p > from the left we can see that the order and its links occupied about 70 days.

Is it possible to shorten the time of this stage? At present, it is not difficult, but some brands are making efforts: < /p >

< p > Adidas has put forward in the past two years in its earnings report that the two brands of "Trifolium" and "NEO" should be made into fast fashion brands, and the product cycle target should be shortened to 60 days. Based on the experience of supply chain integration of these two brands, the market cycle of professional sports products (Adidas Sports Performance) will be greatly reduced.

In order to improve the efficiency of ordering, Adidas is promoting the Virtual Sell-in Tool.

In the earnings report, ADI claims that the tool enables Adidas to fully display all product samples to distributors, and distributors can place orders from the Internet. On the one hand, the tool can speed up the time for products to be listed (saving the time of ordering entities under the holding line), and on the other hand, it can reduce the cost of sample display.

ADI is expected to be able to popularize the system to 60% of the world's distributors in 2013.

If distributors can sit in front of the computer and make orders at any time according to their own sales situation, they can obviously shorten the cycle of product listing.

But in the interview, we found that the system was not popularized in mainland China.

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< p > Lining's change in the order system seems more practical.

According to its earnings report, on the basis of retaining the original order mode, Lining upgraded the enterprise planning system and market data analysis system. Based on these two, the rapid response product line and the best SKU combination (A+) product were launched.

Li Ning Co claims that through quick response product lines, distributors can make timely replenishment for some hot sales items. After conducting market data analysis of different regions, Lining recommends the best SKU combination products to distributors in the region. This product mix is more in line with local consumer spending habits and makes distributors more successful.

Lining plans to build a retail led ordering mode of "inertia orders + best seller SKU replenishment + quick response products".

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< p > we think that although the form of distribution determines the inevitability of ordering system, the order form can be changed. It is not impossible to shorten the product cycle by innovating the order method.

Ordering is a core link in the supply chain. The impact of the change will inevitably be conducted at both ends. The front end is the product design and development, and the back end is production.

We find that the design and production of products can not be separated from the point of view, especially from the perspective of shortening the product cycle.

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< p > < strong > simplifying design and production to accelerate supply chain < /strong > /p >

< p > do not know if you have noticed such a detail: Nike and Adi products have been simplified in recent years, and the color is becoming more and more complex.

From a target= "_blank" href= "//www.sjfzxm.com/" > shoes < /a > products, the appearance is getting closer and closer, the application of fabric is also convergent, and the color is more and more rich.

Take basketball shoes as an example. In the past, different endorsement stars had a exclusive sneakers, which had different styles and different applications.

Now, shoes are becoming more and more like stars.

This phenomenon has been recognized by some people in the industry.

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In the background, it is obviously not economical to increase R & D investment; second, whether active or passive, the pursuit of technology for consumers has shifted from physical experience to digital experience. This also confirms why Nike and Adi have intensified the research and development of digitalization, such as NIKE+, NIKE Fuelband, ADIDAS miCoatch and other digital products are emerging. Third, in the Chinese market, some consumers with strong purchasing power and older age have bid farewell to basic sports such as basketball and football, and have begun to get involved in outdoor sports, thus making outdoor brands springing up. Under this influence, Nike and ADI's positioning is becoming younger, and the color tends to be rich. It is easy to understand. Fourth, simpler design makes production difficult and the production cycle shortens, which means the acceleration of supply chain reaction. < p > we interpret this phenomenon from four angles: first, the development of many styles needs the support of new technologies, while the global economy is stagnant.

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< p > improving the versatility of materials and reducing the complexity of SKU seem to be the consensus of sports brands.

First, save production costs; second, speed up the reaction of the supply chain.

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< p > < strong > information sharing throughout the supply chain is difficult! < /strong > < /p >

< p > many people argue that poor information is one of the main reasons for the slow response of the supply chain.

We quite agree with this statement.

There are numerous examples of losses caused by poor communication in sports industry.

But how to make information flow smoothly is a broad problem. We can only try to do some discussions.

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< p > for now, the information communication infrastructure between the brand and terminal is not bad. Most of the sports shops have information systems.

As long as the brand is willing, the information of the retail terminal can be quickly feedback.

The key is to establish an effective feedback system and the ability to analyze and process feedback information.

In his 2012 earnings report, Lining stressed the importance of information feedback and data analysis. He said: the group is starting to build an effective supply chain and logistics support system to adapt to the retail leading business mode, so as to enhance the rapid response capability.

This description is very similar to Adidas's strategic formulation in the supply chain.

Obviously, the fast response supply chain seems to be a way out for sports brand.

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The supply chain with fast response is not limited to brand operators and terminals. The link between manufacturers and brands is the key to accelerate the supply chain. We believe that the supply chain is not limited to P.

We make such a conjecture: the foundry manufacturer can see the real-time sales data of the brand, so that it can find out which products are going to be out of stock in time, and which products are unsalable, thus adjusting the production strategy, producing more salable products and producing less sales.

Such a state can obviously make production and sales more efficient and substantially reduce inventory risk.

Academically speaking, this is the pformation of MRP purchase mode to VMI purchase mode.

But such a model is difficult to shape in a short time, because there are too many difficulties. Let's sum it up in a word: the three streams of information flow, capital flow and logistics are not harmonious.

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Although P is very difficult to watch, the bright prospect is very attractive, so many brands are changing to the business mode of retail leading (terminal information can run through all links of the supply chain in real time and produce positive synergy).

And direct battalion is obviously the fastest form to achieve information penetration.

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< p > < strong > expand the direct battalion to speed up the supply chain. The time is not yet ripe. < /strong > /p >

< p > direct operation and distribution have both advantages and disadvantages.

But from the speed of information circulation, direct battalion is more advantageous.

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< p > nearly two years, Nike and Adi two sports tycoons are vigorously promoting their own direct business, Nike's direct business has accounted for 16%, ADI higher, more than 23%.

However, it is worth mentioning that the proportion of direct business of the two major brands in China is lower than that in other parts of the world.

It can be seen that in the Chinese market, BELLE, Baosheng, Shari and other large distributors are still the overlord of the industry.

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< p > we believe that the direct supply can at least bring the following advantages to the supply chain acceleration: 1., information feedback is more direct and rapid; 2., by facing the consumers directly, the brand operators can grasp the market more accurately and arrange the production more effectively; 3., the development of direct business can play a role in ordering, logistics, shop selection, personnel management and other links; 4., the direct battalion can build a better brand image (flagship store, concept store), and also can quickly clear inventory (discount stores and factory stores).

Lining is the highest proportion of domestic sports brand in the direct Battalion (22%), which may accelerate its supply chain more smoothly.

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< p > because of the huge investment and high requirements for the operation and management of enterprises, the direct business has always been a challenge to the sports brand. Besides Lining, other domestic sports brands are still trying in this aspect, and the turnover is very small.

The growth of direct business will be a long-term process, and the acceleration of supply chain is a medium-term strategy to deal with the industry crisis. So it is unrealistic to expect the growth of direct business to accelerate the supply chain, and the more efficient coordination between distributors and distributors is the key.

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< p > in the eyes of many industry analysts, the growth of Anta is higher than that of Lining. The main reason is that most of Anta's dealers are trained by themselves, with high loyalty and ease of control.

We may understand that the more responsive the distributors are, the faster the supply chain reaction will be.

ADI's 2008 and 2009 channel redevelopment program was aimed at cutting off many unmanageable dealers and supporting a number of more cooperative dealers.

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< p > we believe that although the direct business mode may be more conducive to accelerating the reaction speed of the supply chain, the direct business of sports products is far from mature. At present, it is more practical to optimize cooperation with distributors.

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< p > strong > pformation direction: accelerating supply chain < /strong > /p >

< p > after studying Nike, ADI and Lining's strategic formulation, we believe that the retail oriented business model will be the direction of pformation for future sports brands.

In order to cater to the needs of consumers faster, sports brands must speed up the response of the supply chain while optimizing products.

To speed up the supply chain, we must extract time from every link of the product cycle, and ordering, design and production are the three core links.

At this stage, it is feasible to accelerate the supply chain through the reform of order system and the optimization of design and production. However, the two ways of information sharing and expansion are not yet mature, and the feasibility is not strong enough.

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