NATIONAL ECONOMIC UNIVERSITY

SCHOOL OF ADVANCED EDUCATION PROGRAM

Group Prsentation

GLOBAL SUPPLY CHAIN MAGAMENT

Topic: Analyze the global suppply chain of Decathlon

Lecturer: Tran Hoang Kien

Group: 2

Class: International Business Administration EEP 60B

HA NOI – 2021
 MỤC LỤC

GROUP INFORMATION............................................................................... 4

ANALYZE THE GLOBAL SUPPLY CHAIN OF DECAHLON ................. 5

1. INTRODUCTION OF DECATHLON .................................................... 5

1.1 Overview............................................................................................... 5

1.2 Mission.................................................................................................. 6

1.3. Vision ................................................................................................... 6

1.4 Core Values .......................................................................................... 7

1.5. Slogan .................................................................................................. 8

1.6. Introduction of chosen product: Domyos | Gym & Fitness Clothes . 8

2. DECATHLON SUPPLY CHAIN OVERVIEW ................................. 11

2.1. Decathlon Business Model And Product Characters .................... 11

2.2. Decathlon Supply Chain Overview ................................................ 13

3. MOTIVATION TO SET UP A GLOBAL SUPPLY CHAIN FOR

DECATHLON PRODUCT ........................................................................ 20

4. MARKET GLOBALIZATION DRIVERS. .......................................... 23

4.1. Lifestyle. ............................................................................................ 23

4.2. Global firms....................................................................................... 23

4.3. Sustainability at Customer Levels.................................................... 24

4.4. Cost globalization drivers ................................................................. 25

4.5. Government globalization drivers. .................................................. 27

4.6. Competitive globalization drivers. ................................................... 27

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 5. THE GLOBAL SUPPLY CHAIN MANAGEMENT ACTIVITIES OF
DECATHLON ............................................................................................ 30

5.1. Planning process ............................................................................... 30

5.2. Procurement of material and suppliers’ relationship ..................... 31

5.3. Production department ..................................................................... 34

5.4. Logistics ............................................................................................. 36

5.5. Sales ................................................................................................... 38

5.6. Analysis of strengths and weaknesses of the supply chain .............. 39

7. RECOMMENDATIONS ........................................................................ 41

REFENRENCE .............................................................................................. 42

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 GROUP INFORMATION

1. Members

No Full name Student ID Positions

1 Dang Quynh Anh 11180092 Leader

2 Nguyen Phuong Anh 11180303 Contents, Slide, Present

3 Nguyen Hong Hanh 11181594 Content, Word, Present

4 Dao Phuong Thuy 11184854 Contents, Slide, Present

2. Presentation’s Topic
Analyze The Global Supply Chain Of Decahlon

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 ANALYZE THE GLOBAL SUPPLY CHAIN OF DECAHLON

1. INTRODUCTION OF DECATHLON

1.1 Overview

Decathlon is a family-owned company, founded in 1976 at Lile, France, and

inspired by the belief that the best sports products should be accessible to
everyone. It is one of the world's largest sporting goods retailers. Today, there are
2080 stores in 56 countries. The company employs more than 96,000 staff from
80 different nationalities.

Ever-evolving and high performance design, the best quality at the lowest
possible price, and expert advice that customers of all ages, backgrounds and skill
levels can access in-store or online, from anywhere, at any time, is what makes
Decathlon who they are.

The retailer stocks a wide range of sporting goods, from tennis rackets to
advanced scuba diving equipment, usually in large superstores which are sized at
an average of 4,000m². Decathlon is not just a reseller. They’re unique because

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they have their own in-house brands. They are experts in their fields, and they
draw on their knowledge and experience to create, design and manufacture their
own products in their own studios and labs. Currently, they have over 20
Decathlon brands, each dedicated to a specific sport or practice. And, their family
ownership means they’re here for the long term. They reinvest their profits into
research and development, helping to lower the cost of participating in sport.

1.2 Mission

“To sustainably make the pleasures and benefits of sport accessible to the
many”

In a world where sport has the potential to give so much, providing innovative,
enticing and high-performance products at prices that are accessible to everyone
isn’t a job, it’s Decathlon’s mission. From designers and makers to customer
consultants and digital developers, they all come to work because Decathlon
believes sport should and can be for everyone.

In brief, Decathlon wants to change the world into a place where everybody has
access to sport. Decathlon’s way to achieve this democratization of sport is by
offering products both at low price and a good quality, or, in the company’s own
words: “to develop technical, good-looking and simple products, always at the
lowest possible prices”(Decathlon, 2017).

1.3. Vision

“To be a well-respected sports company focused on delivering best in class

innovative solutions to the customers and partners.”

This is the main vision of Decathlon. Therefore, Decathlon has developed its own
R&D department and manufactures for its strong sub-brands. This has allowed

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Decathlon to become a leader in innovative sport equipment, with 12 of its new
goods in 2008 rewarded with design prizes.

1.4 Core Values

“ Vitality - Responsibility - Innovation - Green Planet”

Vitality: Vitality is Life, intense activity, energy, drive and vigour. The
employees of the company are full of vitality as they have, first and foremost, a
positive mindset and are extremely energetic. They are enthusiastic, love creating
and innovating, and relentlessly strive to improve and make things around them
change.

Responsibility: Being responsible is about making decisions and making sure

they are acted upon. Their employees are fully responsible for their decisions,
both in terms of their team and their customers. Responsibility is also about
anticipating the challenges facing society and orienting the company’s actions
towards sustainable development. They believe that it is their responsibility to
guarantee the safety of their customers and employees all over the world.

Innovation: “At Decathlon, Innovation is the heart of our product." - The CEO
of Decathlon said. This strategy has 2 main objectives:

 “Innovate smart” because, first and foremost, they want to make sport easier
for people who use their products. They place the user at the heart of their
approach and focus on usage innovations. Listening to, and observing sports
people in action, in their Research & Development centre, in their laboratories,
is how the sales assistants, product managers, designers or engineers imagine
the product of the future – the product that is more practical, comfortable,
enjoyable and safe for the user.

 “Innovate for the benefit of everyone”, in all product categories, not only at
the most expensive or sophisticated end. Their aim is to make their innovations

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 accessible to a maximum number of customers and users worldwide because
their prices are as low as possible.

 Overall, Innovation is an important part of everything they do. They explore

and research new products, concepts and event ideas regularly to ensure sports
experience is constantly improving.

Green Planet: They help people stay healthy for longer through sports and, at
the same time, aim to have a positive impact on the planet. In Decathlon, they
believe that preserving the planet is crucial for the future. Many of the products
they design, manufacture and sell will be used in the great outdoors. They believe
in preserving our playground and so they adhere to the Blue Economy principle
and follow sustainable production methods to help extend the life of Earth and its
inhabitants.

1.5. Slogan

“Sports for all. All for sports.”

This is the motto of Decathlon. With them, You - the customers, deserve to
participate, try, get back up, aim higher and farther. Whether you’re just getting
started or you’re at the top of your game, Décathlon wants to make sports an
exciting part of your daily life.

1.6. Introduction of chosen product: Domyos | Gym & Fitness Clothes

Decathlon has thousands of products under its brands with different lines and
technologies which are able to meet the customer’s needs of ages, genders,
preferences, etc across the world. For example:

 B'Twin: sports equipments for cycling

 Kalenji: sports equipments for running

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 Domyos: sports clothes for fitness enthusiasts

 Quechua: sports equipments for hiking and camping

According to the company’s report in 2020, Domyos is the most famous and
benefited brand in the whole system thanks to the awareness of people about
physical and mental health these few years. That’s why our group picked Domyos
and its typical product: Gym & Fitness Clothes as the chosen representative of
Decathlon to present.

In 1998, Decathlon recognized the need to create a specific line tailored for health
and wellness goals. That’s when Domyos, the fitness brand, was born - made to
fulfill body and soul. Meaning "the way of the heart and muscle," the 'do' is the
way and 'myos' is the heart and muscle. The brand’s products are exclusively
available in every Decathlon store.

Domyos provides technical, affordable clothes for fitness enthusiasts regardless

of experience level. By matching customers with quality, affordable clothes that
are built to last, Domyos encourages its buyers to explore new avenues
throughout their fitness journey. At Domyos, they design for every type of fitness
body, with dedicated teams who understand the craft of fitness activities.

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Domyos is working towards a goal of making fitness accessible to everyone.
Develop products and clothing for adults, for all fitness activities, individual and
in group, which improve fitness in a confined space both indoor and outdoor, but
mainly urban. For example, providing clothes for the practice of aerobics, muscle
building, yoga, stretching or pilates,... For children, these activities are known
collectively as the “gym”.

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2. DECATHLON SUPPLY CHAIN OVERVIEW

2.1. Decathlon Business Model And Product Characters

a. Business Model

A business model of low margins. Decathlon doesn’t have non-integrated

importers, and rely on exclusive partners, so there’s no accumulation of margins
that falls on customers when purchasing.

Decathlon makes the differences through:

 Research & Development: Delivers High-quality & Cost-effective Products

 State-of-the-art production process: Minimize Manufacturing Costs
 Optimized Supply chain: Reduce Retail Prices
 Minimal Retail footprint: Lowers Overhead & Indirect Costs

b. Product Characters

For 40 years, Decathlon has led the way toward high-quality, low-cost products
with a model that produces the best value-to-price ratio in the market. That means

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every athlete has access to the most technically sound products and gear at the
best prices.

The processes of a product include several steps with interactive relations

Research & Integrated Integrated

Manufacturing Logistic
Development Design Retailing

from then showing the most significant characters of Decathlon Products which
are:

 High-quality
+ Direct collaborate with athletes and consumers for needs identification
+ Complex process of products design, testing and producing
+ Selective suppliers for manufacturing
 Affordable Prices:
+ Design mass-market smartly by optimizing resources & simplifying design
without compromising quality.
+ Strict criterias & requirements for suppliers partnership. Aiming to form a
long-term relationship with best industrial suppliers
+ Full control and invest in logistical organization (think storage,
transportation and automation), in order to lower cost and reduce
environmental impact.
+ Actively forecasting the demands in advance to shorten the operating time
for distribution.
 Ecodesign:

+ By controling all the process, the company can apply ecodesign on them

+ Applying a more environmentally friendly approach at different times in the

product's life cycle, which helps to limit its impact on the environment

 Quick reponses to customers:

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 + Observation of preferences and online reviews to optimize replenishment.
For products earning less than 3 stars, Decathlon teams pull them from our
range and optimize them to meet expectations.
+ Place warehouses or manufacturing sources in a close proximity with
stores to take feedbacks and make quick improvements for products.

2.2. Decathlon Supply Chain Overview

Manufactu Distributio End

Design
ring n Channel consumer

• Compoments • Local • Retailers

manufacturing Distribution • Online order
• Assembly • Global
• Full Distribution
manufacturing

One piece of Decathlon's success equation is its supply chain. In Europe and
much of the world, the company controls every aspect, from product conception
to design to retail.

a. Product Design

With 85 different brands in the company, every stage of the design process aim
to offer the most appropriate and high-performance product. The Design
processes are in charge mainly by Decathlon teams around the world. They focus
on creating the best product to suit every athletes/consumers needs for sports. The
steps include:

 Observation: Define sports users’ needs via Website reviews, International

teams discussion; Internal teams detection.

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 Creation stage: brainstorm and workshop for product concept, specifications
for use, products assessment (feasibility, technical, sensory and aesthetic
choices)
 Industrial Prototype: formalising the request and providing the suppliers with
technical file to start the industrial prototype
 Testing: the prototypes are tested several times in the aboratory and directly
on the playing fields
 Product selected: select tested products for matching sport or season. Then the
launch of the collection in store to anticipate production and delivery time.

b. Manufacturing/Industrialisation

Once a product has been through all the design stages, Decathlon work on its
industrialisation before putting it on sale. This process goes from the prototype to
the mass production. It lets us go from rudimentary or handmade production to
manufacturing large-scale quantities by using industrial machines.

Decathlon manages its activities on the global market with a commercial presence
in 60 countries and production activities in 45 countries.

Supply Chain Decathlon Figures

Number of Decathlon production countries

- With physical presence of Decathlon teams 24

- Without physical presence of Decathlon teams 23

Number of Decathlon production offices 42

Number of suppliers for Decathlon products

- Rank 1 suppliers (finished goods & components) 977

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 - Rank 2 suppliers 362

Number of teammates reponsibile for managing &

2178
coordinating with suppliers

Number of Decathlon-owned production facilities 9

Countries witt physical presence of Decathlon team are:

 Africa: Egypt, Ethiopia, Morocco, Tunisia.

 Americas: Brazil, Mexico.
 North Asia: China, Taiwan.
 Southeast Asia: Indonesia, Thailand, Vietnam.
 Southwest Asia: Bangladesh, India, Pakistan, Sri Lanka.
 Europe: Albania, France, Italy, Poland, Portugal, Romania, Turkey, Ukraine.
Cis (Commonwealth Of Independent States): Russia.

Countries without physical presence of Decathlon team are:

 Africa: Madagascar.
 North Asia: Japan.
 Southeast Asia: Cambodia, Malaysia, Myanmar (Production Stopped In
2020). Europe: Germany, Austria, Belgium, Bosnia, Bulgaria, Croatia, Spain,
Finland, Georgia, Hungary, Lithuania, Netherlands, Czech Republic, United
Kingdom, Serbia, Slovakia, Slovenia, Switzerland.

The production, which is always outsourced, is centralized in geographical areas.

This leads to a disttibution of products line. In the Spain the French firm has its
Bicycle suppliers, mainly in Mataró (Barcelona). In Catalonia, he has plastic
products, such as shower caps, socks and metal components are also

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manufactured. Morocco is another country that provides numerous articles for
Decathlon, especially textiles, while in Asia sneakers and balls occur.

Decathlon is pursuing the local production development strategy in order to be

more responsive to the demands and uncertainties of our markets, while reducing
our impact on the environment.Our panel of suppliers and choice of volume
allocations are always decided on the basis of total cost (referred to as TCO: Total
Environmental Cost of Ownership). The combination of these two strategies
(local production and the TCO approach) enables us to form a panel of suppliers
that meets the global and local challenges facing our company.

Made-in China For Retail China: 93.2%

Made-in Europe For Retail Europe: 24.9%

Made-in Russia For Retail Russia: 11.8%

Made-in India For Retail India: 46.4%

Made-in Brazil For Retail Brazil: Nc80

Local teams based in manufacturing countries are responsible for sourcing and
managing the suppliers that produce Decathlon products. Once they are
manufactured, Decathlon products are shipped by transport providers right into
warehouses, then allocated to stores or directly supplied to customers and users
after an online order

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c. Distribution Process

Decathlon handles the logistic to transport a product from a producing country to

a country wishing to distribute it, there are 3 modes of transport: sea, rail or air.
At a European level, there is also road transport. Before being delivered to stores
or to home, products go through the logistics network.

This network includes 69 warehouses and logistics platforms, distributed all over
the world, allowing them to serve countries where they have a presence.

The country that manufactures products sends them to a distributor country in a

warehouse, called Continental Supply Centre (CSC), who in turn distributes to
other local warehouses called Regional Supply Centres (RSC). It is these regional
warehouses that supply the products to DECATHLON stores or directly to users
home.

The company has several distribution centers in each area i.e. North Europe,
South Europe, EMEA, Asia, America; however retail countries can consider to
ship direct from sourcing countries instead of distribution center. The CSC will
play as an area Distribution Center/Cube. It decides the distribution of goods to
the sourcing market. The leftover, will be decide to consolidate at an Free Trade
Agreement Area (FTA) to de-consolidate and deliver to purchasing destination.
The transfering goods will be delivered from CSC to the RSC and from then go
to the warehouses systems of Decathlon to get to stores or direct address.

Local Retail
Purchasing
CSC
Order Warehouses
Global Retail RSC & Logistic End users
Platforms

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In specific, in 2005 Decathlon opened in Paris of a large continental 50,000 m2
warehouse, to be in stock and that will serve the rest European products to the
stores.

The new scheme includes the creation of a second type of store. In the future, the
multi-regional facilities, will cater to the twelve regional warehouses that the
French firm has in Europe

d. Retailing

Decathlon products are sold through 1,697 stores located in 60 countries and
digital platforms ensuring our products are accessible through all our distribution
channels.

At stores, the stock are prepared to be always in full so the consumers can always
feel and touch it. The online order from website are undertaken by many format
which can be deliver to address, click&collect,…

The warehouses are always placed in a close proximity with the retail stores to
ensure the stocking. Also contact points are important, because they allow us to
create the most direct connection with you the sports users. By then making
forecasting for goods demands and feedbacks which will go directly to the
manufacturing and regional distributing center.

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 3. MOTIVATION TO SET UP A GLOBAL SUPPLY CHAIN FOR DECATHLON PRODUCT

Increase Customer
No Functions Cost Reduction Improve Quality Competitive Leverage
Satisfaction

Create an cost- Global outsourcing for Effective planning for Global outsourcing
effiecient network of suppliers with inventory, warehouse helps scaling up the
distribution center production of raw functions and economy and networks
(CSC, RSC) materials, compoments transportation. Improve of logistics in sourcing
1 Logistics
Taking advatange of and finshed the overall global countries.

international trade manufacturing. supply chain.

agreements for cost

savings.

Global outsourcing Effective use of core Creates an order Abundant choices of

helps scaling up the competencies, fulfillment and materials as well as
2 Purchasing economy and networks outsourcing, and global delivery system that manufacturing sources.
of logistics in sourcing supplier selection result maximizes & meets
countries. in quality
 improvements global customer and Local conditions
throughout the chain channel needs awareness with great
supply partnership.

Achieves cost Competitive priorities Quality standards and Global operations

reduction via a global focused on quality, requirements. allow for flexibility in
cost analysis, global production The complicances of where to base
international business Located to achieve partnership competitive advantage,
enviroment. geographical advantage Production efficiencies whether it is speed,
3 Operation quality, cost, or
The competitive of The maintance and
optimization in process consistency of quality flexibility based

and resources and working

effienciency requirments

optimal global market Maximizing efforts of Creating value in the Approach reduces
Market
4 entry mode, online the customer value– processes and value in design and production
Channels
presence, and creating processes, costs, focuses talents,

21
alignment with alignment with the the alignment with the and reinforces
marketing mix marketing mix, and marketing mix marketing
variables understanding global
customers’ needs

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4. MARKET GLOBALIZATION DRIVERS.

4.1. Lifestyle.

The sports retailer has benefited from the changes in society. Athleisure is still a
hot trend that shows no signs of slowing down. Fitness enthusiasts are looking to
get in shape (or stay in shape), while having the ability to socialize and interact
with others. There’s a renewed focus on fitness, physical and mental health.
Nowadays, the concept "being healthy" is quite common.

Decathlon consumers are typically seen as persons who like participating in

sports, are physically fit, or are just getting started in sports. Regarding
demographics, respondents perceive Decathlon customers as young adults who
do not have high income levels or belong to the segment of office workers. To
make sport accessible to as many people as they can, Decathlon makes and sells
sports gear and accessories, for around 70 different sports and at an affordable
price. They want to help, inspire and guide people through sports experiences.
They believe that being active and discovering new sports every day is an
important part of a healthy lifestyle.

4.2. Global firms.

Multinationals also must determine how to refine their product or service

offerings so that they will appeal to (or even shape) local tastes, be affordable,
and give the company an opportunity to achieve reasonable scale in a timely way.
Deciding how and how much to cater to local preferences requires a deep
understanding of consumer demographics, preferences, and behavior within
target segments.

Decathlon design teams optimize materials, components, shapes and assembly to

create products that are most useful and efficient for the users. Their research and
development team employs 700 people that work meticulously on new products
and new designs of existing products. Every design team is conveniently located
where their sport is most accessible and frequently practiced, allowing them to
observe and collect feedback from users. Every year, the retailer churns out about
2,800 products on an average. They continuously innovate essentials for each
sport. These brands have their own identity in the market. For example, the
Domyos range is designed for fitness enthusiasts.

This company is learning to craft more nuanced product strategies that balance
scale and local relevance.

4.3. Sustainability at Customer Levels

An increasing number of customers are demanding that firms throughout the

global supply chain engage in efforts to sustain the environment and offer
“greener” products. Apparel businesses are increasingly concerned about
improving their environmental impact and social responsibility throughout their
supply chains. Conventional textile production is one of the most polluting
industries on the planet. The World Bank estimates that the textile industry is
responsible for as much as 20percent of industrial pollution in our rivers and land.
Environmental impacts occur throughout the production chain and most attention
is paid to water consumption, chemical use, and waste greenhouse gas emissions.
The textile industry has taken several initiatives to reduce its environmental
impact and improve social conditions.

Sustainable development is seen as critical to Decathlon's future. They have

subsequently chosen to concentrate on product design and manufacturing to
reduce water consumption and pollution. The notion of eco-design at Decathlon
consists of "designing or redesigning a product by reducing the product’s
environmental impact throughout its life cycle whilst conserving the qualities of
its performance and its functions.” They also have many projects to help prolong

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product's lifespan such as “Second-hand”, “part-exchange”, “Rental”... By 2026,
Decathlon is committed to eco-designing 100% of their products.

4.4. Cost globalization drivers

a. Scale of economies
The main core of Decathlon's business model is the low operating costs strategy.
Decathlon is recognized as one of the best retailers on the market within the
performance/price ratio.The main contributor to achieving such an outstanding
performance is a fully integrated chain allowing control of both manufacturing
and distribution processes. Each one of Decathlon’s brands conducts extensive
research in order to develop the latest and most Innovative Designs in sportswear
and to minimize operating costs.

Decathlon has room to expand further in the UK and internationally. With its
wide assortment of private label lines stocking items to support more than 70
different sports, the company has a reputation for quality at low prices, which
drives customer loyalty.

b. Accelerating Innovation
In 2020, Decathlon continued to invest in its upstream value chain to increase its
engagement, relevance and appeal among customers. This involves significant
efforts in IT and product development.

Each of the US stores is running a NewStore omni channel platform, which

includes an integrated, cloud-based order management system and mobile POS
solution. Tally, a shelf-scanning robot (with little eyes for the cute-factor)
presents a new approach to organization within the brick and mortar experience.
Using RFID technology, Tally ensures an automated system of counting
inventory keeps the stores in check as consumers move products around in the
highly experiential stores.

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Part of Decathlon’s success in penetrating the local market was its ability to
translate online demand into physical retail prowess, incorporating technology
into everyday experiences for shoppers. For example, shoppers can don a virtual
reality headset and experience tents through a variety of weather conditions,
allowing them to experience their purchase even before they walk out of the store.

Additionally, the smart cashless check out process and visual merchandising
within the store are two other tech-powered innovations, which has helped
Decathlon improve its customer experience metrics.

c. Advance in logistics.
Lean logistics comprises the strategies enacted to identify and remove
wasteful/unnecessary activities from the supply chain to improve product flow
and speed. It involves activities such as limiting excess inventory and improving
freight transport efficiency.

Decathlon’s logistics team gains greater visibility and control to optimise

operations and reduce costs of complex logistics chains. With more than 1,000
supply chain experts across 82 offices in 46 countries worldwide. DHL Global
Forwarding, partners of Decathlon, provide comprehensive services for their
international supply chain operations. They provide full visibility for Decathlon’s
logistics teams to control tower services and oversee Decathlon’s air, sea and road
shipments from factories in Vietnam and Taiwan to the world. Decathlon puts its
warehouses close to the stores to increase logistical efficiency. Also, the company
has adopted automation to enhance productivity. Many of Decathlon’s storage
facilities now employ Goods-to-Person robots that enable human workers to
process over 140 customer orders every hour. This approach minimises human
error and the costs of manual labor.

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4.5. Government globalization drivers.

a. Tariffs barriers.
When tariffs increase, businesses generally have one of three options: Absorb the
higher cost, increase prices to pass it on to customers, or rework the supply chain
to avoid the higher tariffs. However, the general trend in the future is increasing
globalization by Free trade agreements. FTA do not just reduce and eliminate
tariffs, they also help address behind-the-border barriers that would otherwise
impede the flow of goods and services; encourage investment; and improve the
rules affecting such issues as intellectual property, e-commerce and government
procurement.

b. Trading blocs.
Clearly there are global supply chain implications resulting from these trading
bloc structures that many, if not most, firms face. The creation of trading blocs is
that the larger markets result in higher efficiency and productivity through larger
factories and lower overhead. Such factors benefit large businesses that can scale
up their production and save money.

With the trend of globalization, Decathlon has opportunities to develop its supply
chain. This business can freely choose potential markets and expand the supply
chain to other areas.

4.6. Competitive globalization drivers.

a. Inbound competition
Decathlon has 10 production plants where they manufacture some of our articles.
In these plants, they develop the Decathlon Manufacturing Way (DMW) network,
which aims to increase operational excellence when it comes to managing teams,
devising manufacturing technologies and processes, implementing continuous

27
improvement methods and organising flows. This DMW network can be accessed
by their partner suppliers.

The company forms long-term alliances with the best industrial suppliers, whom
it frequently audits to ensure safe working conditions. By carefully choosing its
partners, the company can ensure productivity without abandoning its core
values, such as improved risk management and improved times to market. They
maintain long-lasting relationships with their suppliers because they have
proprietary technology or sensitive production volumes.

b. Market competition
In general, Decathlon is way more affordable than its competitors. It is part of the
brand’s identity to offer “the best sports products to anyone .”

In terms of pricing strategy, there are differences between Decathlon and its
competitors. Indeed, we observe that the entry price itself is highly differentiated.
Decathlon’s most frequent price is lower than its competitors like Nike and
Adidas, well-known for selling sports products. What catches attention is the
difference in terms of maximum price. In the case of pricing comparison, we
found that a basic jogger made of French terry – brushed or unbrushed- is priced

28
at €39.99 and €39.95 at Nike and Adidas, respectively. On the other hand,
Decathlon offers similar products at €9.99.

Sportswear combining quality and affordability is a valuable element in

Decathlon’s successful equation.

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5. THE GLOBAL SUPPLY CHAIN MANAGEMENT ACTIVITIES OF
DECATHLON

5.1. Planning process

Decathlon states an intention to propose and make accessible high-performance,
innovative products designed for the Decathlon-being of sports people. The
Decathlon research centre, the Industrial Division, the brands and the Design
department work daily to provide the best solutions for sports people of all
abilities. Decathlon keeps this promise on a daily basis by controlling every stage
of the product creation process: listening to customers, analysing the human body
in motion and seeking out the best components.

From the day our first researcher was hired in 1990 until today, the significant
increase in investment in R&D clearly illustrates its importance to Decathlon.
upstream, Decathlon SportsLab carries out research programmes into the needs
of sports people.

Downstream, it also checks the technical balance between the brands' offer and
the expectations of users. Decathlon SportsLab deploys considerable resources in
order to properly carry out the 5 steps essential to any scientific approach
(observe, understand, imagine, experiment and check):

- More than 50 researchers

- A worldwide network of scientific laboratories, research organisations,

universities and industrial partners.

On average, this organisation enables their teams to register 40 patents per year.

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5.2. Procurement of material and suppliers’ relationship
a. Raw materials

Cotton

Following the revelations of forced labour practices in Uzbekistan during 2005-

2006 (among others by NGOs such as IRLF and Environmental Justice
Foundation), Decathlon asked their suppliers, starting in 2007, to sign a letter of
commitment prohibiting the use of cotton sourced from Uzbekistan in their
products.

Decathlon’s new code of conduct, issued in 2017, also includes a ban on cotton
from Turkmenistan in addition to Uzbekistan.

Decathlon’s commitment to sourcing cotton from more sustainable origins

Although it's a natural produce, cotton farming has an environmental and social
impact.

These impacts are mainly linked to the huge amounts of water required to grow
cotton. They are also linked to the use of pesticides, which impact biodiversity,
contaminate the soils, and also affect the people that grow and harvest it.

To play a part in reducing these impacts, Decathlon are committed to getting their
supplies through three more sustainable sources:organically grown cotton (16%),
BCI (Better Cotton Initiative) cotton (78%), and recycled cotton (6%). Cotton
from sustainable sources today represents 95% of the cotton used at
DECATHLON.

Recycled polyester

Polyester is a synthetic material that comes from petroleum materials. It is a

material that Decathlon gets from natural resources to be able to produce it.
Decathlon are no longer drawing from raw material resources but salvaging waste
Decathlon can currently find everywhere in the world. There are currently 2
solutions for recycling polyester. Two technologies are both available on the
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market. The first one is mechanical recycling technology. The second technology,
which is a chemical recycling technology with plastic colored bottles.

Wool

A code of best practice was put in place in 2018 with breeding farms in South
Africa, then extended to Uruguay and Argentina. We make sure that breeders do
not practice mulesing, that their animals are raised in wide-open spaces and that
the living and shearing conditions are good, while animal welfare requirements
are being followed.

Feathers

Decathlon works with suppliers who observe decent breeding conditions: no

animal abuse, no force-feeding of geese and ducks, no live plucking. Some
products are RDS certified, such as the Forclaz Trek 100 down and feather
sleeveless jacket. The Decathlon teams are seeking to increase the proportion of
suppliers of feathers for RDS certified clothing.

Fabric

Biton

The purpose of Decathlon is to design fabrics that are suitable for sports uses. The
main impact of dyeing is that a lot of water is used along with high temperatures,
which leads to certain CO2 emissions and this is what makes the dying process
very polluting. The BITON technology is less significant than conventional dyed
fabric because in a way, only one thread is dyed out of the two.

Dope dyed

Dope dyeing is the process of integrating the color directly into the varn when it's
being made. The benefits of Dope Dyeing are that it saves energy and reduces
water consumption. Dope dyeing enables us to offer durable color fastness that

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will never lose its color. So when you choose a Dope Dyed product in store, you
are going to keep it for 10 years.

Packaging

For packaging, the required preservation of resources is reflected in a sharp

increase in the use of certified paper pulp from FSC/PEFC sustainably managed
forests. The focus in 2020 was to shrap reduce the proportion of non-sustainable
materials (plastic) purchases. The objectives are to provide a 100% eco-designed
offering by 2024 and eliminate single-use plastic by 2026.

As a result of the pandemic, the number of hangers collected in the stores and
warehouses naturally decreased in 2020 due to the COVID requirements on
minimising the handling operations at checkout as much as possible, combined
with the increase in e-commerce. The cycling rate of hangers reached 38.6%, and
their reuse attained 22% worldwide.

b. Supplier

Different types of suppliers come into focus in the context of manufacturing

Decathlon’s products. Decathlon can distinguish them by tier:

- Tier 1 suppliers: those that work directly with Decathlon

- Tier 2 suppliers: those that work with Decathlon’s suppliers

- Tier 3 suppliers: those that work with the suppliers of Decathlon’s suppliers

To facilitate discussion with the different factories, Decathlon’s teams have

adapted their organisational structure by “industrial group” (textiles, heavy-duty
clothing manufacturing, electronic, metallic equipment…). In some of these
groups, people are in charge of selecting the supplier partners. They are called
“buyers”. It is a complex assignment given they have to take into account lots of

33
technical, logistics and ethical criteria to select them. Partnership can start when
a factory meets all these criteria.

By the end of 2020, Decathlon had worked with 1007 tier 1 suppliers (finished
products and components) and 346 tier 2 suppliers located in Africa, the
Americas, Asia, Europe and Russia. Among these factories, nine belong to
Decathlon.

Decathlon’s aim is continual improvement, that's why Decathlon has a network

of people. Decathlon refers to on the ground in our production offices. Decathlon
call them “production leaders” and they each have an expertise: quality, supply,
industrial development, sustainable development. In addition, Decathlon
regularly carries out audits to assess employees' working conditions.

This meticulous selection of suppliers and this rigorous monitoring has allowed
Decathlon to forge solid relations based on trust. This results in establishing long-
term collaborations. Decathlon greatly favors these types of long-lasting
relationships, given they are more aligned with Decathlon’s values. Decathlon’s
aim is to subsequently augment the number of Decathlon’s suppliers in favour of
long-term partnerships.

5.3. Production department

a. Manufacturing

To achieve large-scale production of sports goods, Decathlon calls upon a panel

of suppliers distributed in no fewer than 47 countries. Decathlon’s teams are
permanently in contact with them and on the ground, in Decathlon’s 42
production offices. In concrete terms, it represents 2142 teammates working in
production. They travel to factories, talk daily to our suppliers, making sure
manufacturing runs smoothly.

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Decathlon shares with Decathlon’s suppliers the same desire: offering you
products with the best value for money. A goal that must be achieved in the right
conditions, where everyone benefits from an optimal operational framework. For
this reason, Decathlon’s partners are committed to providing their employees a
good quality working environment, based on respect, the teams' fulfilment and
preserving the environment.

RTID technology

RFID stands for Radio Frequency IDentification.

RFID is an abbreviation that refers to any electronic device that uses radio waves
to facilitate the communication of data for the purpose of identification, and
sometimes to locate and/or sense the condition(s), of animate and inanimate
objects.

Decathlon is now using RFID "all over the supply chain, from factory to stores”.
Whether the reader reads a pallet or a box, each item included is read and the data
in the central system is updated. The company aims to have 100 percent of its
products tagged "as soon as possible,"

b. Warehouse and inventory control

In all our warehouses, Decathlon invested in automation to make teammates

everyday life simpler. The machines do not replace the workforce, they are at
their service. It helps Decathlon to save time and reduce costs. And therefore offer
products at the right price to our sports users.

To manage inventory, Decathlon has robots take constant inventory throughout

its stores using RFID technology. The robot sends that data back to the
omnichannel fulfillment manager in the store, ensuring that inventory is accurate
on retail floors, the Decathlon e-commerce site and its warehouse. This enables

35
retailers to have automatic replenishment data sent back to its stores to make sure
that shelves are always fully stocked with inventory.

Not only are sales associates alerted when there are misplaced items, but
inventory managers are also able to better understand their customers through
data collected about how items move on the sales floor. With these valuable
insights, managers can make informed decisions about inventory and maximize
store profitability.

In addition to providing valuable inventory data, robots have given sales

associates more time to interact with customers. Rather than spending hours or
even days counting inventory, Tally has allowed associates to remain on the sales
floor serving the most critical part of any business: customers.

5.4. Logistics
Logistics network includes 69 warehouses and logistics platforms, distributed all
over the world, allowing Decathlon to serve countries where Decathlon have a
presence.

The country that manufactures Decathlon’s products sends them to a distributor

country in a warehouse, called Continental Supply Centre (CSC), who in turn
distributes to other local warehouses called Regional Supply Centres (RSC). It is
these regional warehouses that supply the products to DECATHLON stores or
directly to the buyer's home.

To transport a product from a producing country to a country wishing to distribute

it, there are three modes of transport: sea, rail or air. At a European level, there is
also road transport.

a. Air transport

Decathlon’s goal is that the air transport mode represents less than 1% of
Decathlon’s products' transport by 2026.

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Before 2018, Decathlon resorted to air transport up to 6%. It's share today is only
4%. To continue making progress in this direction, you have to understand why
Decathlon still uses air transport in certain circumstances. And especially how
and what Decathlon is going to replace it by.

Decathlon knows that air transport has a very high carbon footprint. But it is not,
it's only failing. There are also plenty of negative impacts on logistics. To
highlight these and involve Decathlon’s teams, Decathlon have implemented
weekly monitoring. Decathlon aims to make our teammates aware of the
necessity, at all times, to make other modes of transport their first choice.

To date, Decathlon have already identified three negative consequences of air

transport: the cost, handling and stock.

- The cost: air transport has a negative impact on our productivity because
receiving stock in the warehouse requires an extra teammate than usual.

- Handling: Air transport involves unloading a considerable amount of stock and

scores of pallets, taking up a lot of space, are not always quickly processed. As a
result, this extends the warehouse operator's path, making them lose time.

- Stock: the pallets, not immediately picked, take up space to the detriment of
other products. Their presence therefore needlessly increases stock levels.

The alternatives: Transferring from air flows to rail flows. An option already
made possible with railway lines connecting France to Germany, Russia and
China, for example.

b. Road transport

Even if Decathlon is just at the beginning of a vast work in progress project,

Decathlon has already undertaken initial measures to reduce our carbon footprint
on the road.

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Decathlon have included carbon valuation in Euros in Decathlon’s negotiations
for transport between Decathlon’s different warehouses and stores. The idea is to
persuade Decathlon’s teams to use “clean kilometres”. It means using natural gas,
vegetable-based oil and electric first (for big conurbations) rather than diesel.

Decathlon have already noticed an improvement for road transport between our
Regional Supply Chain Centres and our Continental Supply Chain Centres. At
the start of 2020, 25% of our kilometres Decathlon is “more sustainable” thanks
to our negotiations. On the trajectory side, Decathlon aim to achieve 35% of
“clean kilometres” in 2021, 50% in 2022 and 75% in 2023.

Lastly, Decathlon are working on translating Decathlon’s transport indicators into

C02 impact, for greater transparency and making them more concrete.

Decathlon believes in the principle of subsidiarity because every region has their
own specific challenges and issues. It means the decisions should be taken as
closely as possible to where they have an impact. Decathlon is more involved in
our decision making, and that makes our measures relevant to everyone's needs.
As a result, each country then decides on measures that they want to conduct
locally.

5.5. Sales
a. Retail and distribution channel

Decathlon’s products are sold through our website and in 1647 stores distributed
worldwide (including 48 in the UK). These contact points are important, because
they allow us to create the most direct connection with you the sports users.

Whether that starts on buyer's mobile phone or at the entrance to one of

Decathlon’s stores, they will have a wonderful experience. RFID, Mobistore,
Kiosk Plus or Test and Buy, it's these added extras that make it easier to go

38
through the tills and make purchases online. Decathlon also have Customer
Relations Centre providing answers and supporting buyers since 1999.

b. Replenishment

Decathlon was looking for a solution to be able to provide accurate data on stock,
as well as save time taken to do stock taking manually, impacting on in-store
efficiency and productivity.

PAL Robotics’ StockBot solution was first implemented in Decathlon Singapore,

as well as more recently in France, The Netherlands, Spain, Poland, Ireland, Italy,
Taiwan, Thailand, Malaysia, and Australia. Discussions are also ongoing on
further deployment opportunities in other countries.

StockBot is easily deployed within different stores as it does not require any
layout modifications and is seamlessly integrated with the existing software
systems.

StockBot reads and detects all the products in-store and then validates the data.
Using this type of technology helps gain a better visibility of stock, and of course,
automate inventory tracking and workflow.

StockBot provides data on stock and business and is easily integrated with RFID
tags in-store. With StockBot once set up, pressing one button means the robot is
able to do inventories automatically, in order to save time.

5.6. Analysis of strengths and weaknesses of the supply chain

a. Strengths

Technology integration

The new store of Decathlon in Eva Mall, Bengaluru is equipped with tech-enabled
innovations. It has a VR system that allows the customers to experience the

39
different types of camping tents and have a look at the products and has improved
the customer experience at the stores.

The Decathlon app allows customers to locate the exact position of the products
in the store so that they can navigate easily in the large stores. The customers can
also scan the RFID tags of the products via the app and obtain more details about
the products and look at the verified customers’ review as well. The payment can
also be done online so that the customers don’t have to stand in the queue for
checkouts, they just have to scan the QR code to confirm the purchase.

b. Insourced supply chain management

In Europe and much of the world, the company controls every aspect, from
product conception to design to retail. This vertical approach is much of what
allows it to produce its famous $10 backpacks, $30 puffy coats and popular "two-
second," $60 tents.

c. Weaknesses

Lead time is long

The shipping process from manufacturing to distributor countries takes a long

time because sourcing countries are plentiful but mostly Asian and African
countries, while distributor countries are located in Europe. Rather than air
transport, Decathlon prefers sea transport.

More proper forecasting

Consumers may have a unique set of buying habits, something the company is
working to identify in detail. For instance, U.S. customers like to feel and touch
products before buying, so Decathlon needs to ensure the shelves are stocked All
of this leads to a heavy focus on proper forecasting.

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7. RECOMMENDATIONS

Technology + human resource

To forecast properly, Decathlon should use an integrated SAP software system

plus a qualified team to analyze consumers' needs, and focus on store
replenishment at the moment.

Setting up distribution centers for success

Supply Chain Dive that with information in hand, order fulfillment can be
optimized by a proper distribution center floor layout. With slower moving items,
it's key to keep them out of the way of the more popular inventory.

41
 REFENRENCE

1. Anup Mysore, (2016), A research on retail chain – Decathlon, retrieved

10/7/2021, from https://www.slideshare.net/AnupMysore1/a-research-on-
retail-chain-decathlon
2. Decathlon, (2021), It's because we design our products that we can
Ecodesign them!, retrieved 10/7/2021, from
https://sustainability.decathlon.com/its-because-we-design-our-products-
that-we-can-eco-design-them
3. Decathlon, (2021), What does manufacturing mean at decathlon, retrieved
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manufacturing-mean-at-decathlon
4. Decathlon, (2021), Our manufacturing responsibilities, retrieved
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responsibilities
5. Decathlon blog, (2021) , The Make In India Initiative, retrieved 10/7/2021,
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decathlon
6. Global Retail Alliance, (2021), Decathlon turns stores into fulfillment
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stores-into-fulfillment-centers/
7. Impinj, (2019), Decathlon Autonomously Maintains Inventory with RAIN
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8. Decathlon, (2021), What does distribution mean at decathlon?, retrieved
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distribution-mean-at-decathlon

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