• DEUTSCH

• Never-out-of-stock (NOOS): The NOOS programme comprises a core range of basic articles, mostly on an 18- to 24-month lifecycle, that are selling across all channels and markets. Overall, the NOOS replenishment model secures high levels of product availability throughout the season, allowing for quick adaptation to demand patterns. Retailers have to provide dedicated retail space, co-invest in fixtures and fittings and commit to a “first fill” representing about 25% of total expected seasonal demand to participate in this programme. In return, customers can profit from significantly reduced inventory risk on these products. Most NOOS articles are on an end-to-end supply chain, thus limiting the adidas Group’s inventory risk as we re-produce following customer demand.

Harmonisation and standardisation of processes to exploit leverage

Our Wholesale segment is constantly working on further leveraging the size of our Group and reducing complexity by implementing best operational practices across our wholesale activities. The harmonisation and standardisation particularly of back-end processes can help to further reduce cost through simplified IT systems and applications.

Similarly, and already started in Europe, we are rolling out a trade terms policy that rewards customer performance either by higher efficiency (e.g. in logistics) or better sell-out support (e.g. by point-of-sale activation). As part of this effort, we have established regular reporting, delivering meaningful benchmarks that allow us to tightly control our third-party retail support activities.

Innovation key to accelerate speed-to-market

Accelerating product creation, while reducing complexity is a key element to gain competitive edge and ultimately to increase shelf space at our customers. We have therefore developed a virtual sell-in tool which allows us to continuously offer a holistic sample range to our retail partners. This is giving the customer the benefit of having a “full range in his pocket”. The reduced amount of samples used during the sell-in process as well as the streamlined image creation process increase speed-to-market, while at the same time reducing costs. This new tool has already been piloted in several markets and is targeted to cover 60% of all Wholesale pre-orders by 2013.