RMIT International University Vietnam

Assignment Cover Page

Course Code OMGT 2085

Introduction to Logistics and Supply
Course Name
Chain Management
Location where you study Saigon South Campus

Title of Assignment Group Report

OMGT 2085 – Group Report Report –
File(s) submitted
Group 7
Nguyen Pham My Tin
Nguyen My Trinh
Nguyen Thanh Nguyen
Student Name
Ly Nguyet Nhi
Trinh Hong Phuc

S3804673@rmit.edu.vn
S3802817@rmit.edu.vn
S3803301@rmit.edu.vn
Student e-mail address
S3836415@rmit.edu.vn
S3819661@rmit.edu.vn

Learning Facilitator in charge Dr. Scott McDonald

Assignment due date 20 January 2021

Date of submission 20 January 2021

Number of pages including this one 24

4350
(exclude Introduction, Conclusion, Executive
Word Count
summary, References, Titles. Headlines and
Intext citation)

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 STATEMENT OF AUTHORSHIP

COVER SHEET for SUBMISSION of

INDIVIDUAL/ GROUP ASSIGNMENTS

Course Code: Course Name: Dept. Date Stamp

OMGT 2085 Intro to Logistis and Supply Chain Mgt
Assignment Title: Assignment No: Date Due:
Group Report 2 20 January 2021

Academic’s Name:
Assessment 2 - Group Report (40%) - [Week 12]
(For Office use only)

STUDENT(S)
Family name Given Names Student Number
1) Nguyen Pham My Tin s3802817
2) Nguyen My Trinh s3803301
3) Nguyen Thanh Nguyen s3804673
4) Ly Nguyet Nhi s3836415
5) Trinh Hong Phuc s3819667
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in the assignment.
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6. I give permission for a copy of my/our marked work to be retained by the Department for review
by external examiners.

I/we understand that

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 Further information relating to the penalties for plagiarism, which range from a notation on your student file
to expulsion from the University, is contained in RMIT Statute 6.1 Student Discipline. (See Appendix in
Student Guide or consult T uring.)

Summary of teamwork

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Contents
Executive Summary:.................................................................................................................5
Introduction:.............................................................................................................................6
Identify - supply chain aspect/processes selected:.......................................................................7
1. Supply Chain Network:.....................................................................................................7
Physical flow:.....................................................................................................................7
Information flow:...............................................................................................................8
Financial flow:...................................................................................................................8
Inbound & Outbound Logistics:.........................................................................................9
2. Major Logistics Activities:.................................................................................................9
Production:........................................................................................................................9
Transportation:...............................................................................................................10
Distribution:....................................................................................................................11
Inventory control:............................................................................................................11
Discussion A............................................................................................................................12
1. Core competence..............................................................................................................12
2. Supply chain network issue..............................................................................................13
3. Relationship between supply chain actors:.......................................................................14
4. Technological changes’ effects on the supply chain...........................................................14
Discussion B............................................................................................................................15
Challenge 1:........................................................................................................................15
Challenge 2..........................................................................................................................16
Challenge 3:........................................................................................................................17

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Conclusion..............................................................................................................................17
Reference:...............................................................................................................................18

Executive Summary:

Decathlon is a sport retailer franchise founded in 1976 in France with the belief of providing
equipment and textile products of every type of sport for customers and making it accessible to
everyone regardless of locations. As of January 2020, a total of 1,647 retailers, 88 branded sports
shops and these items were sold in 57 countries (Marketline 2020). Decathlon also committed to eco-
design and sustainability by recycling plastics bottles into materials and made into clothing and
equipment. Specifically, Decathlon Vietnam is the world's second biggest maker of Decathlon with
200 million items per year, generating jobs for 75,000 workers and 300 employees (Vu Yen 2017).
Regarding visions of the organizational structure, according to the streaming Decathlon Vision
Presentation in November 2020, Decathlon team illustrate five core targets that every store from
around the world should follow, which also include Decathlon Vietnam: Health, Transport, Local
Living, Regenerative and Inclusive. First of all, Decathlon Vietnam promotes a caring lifestyle
through sport for superb living quality, not just physical but involves mental wellbeing. The next one
is Transport, which concentrates on discovering and implementing clean and healthy transport for both
their distribution transports as well as transportation products for their customers. Another target is
engaging in learning and adapting to more local orientation, which asks Decathlon to make their
products available and accessible to local people, so that Decathlon can even exist in rural areas.
Regenerative is assessed as a notion of sustainability but further. They need to look at a problem as not
only their own perspective, but also the society perspective so that Decathlon, people and environment
can all benefit from. Finally, the final target is to be open-minded to all locals, each regional resident
has different requirements and Decathlon aims to satisfy that. This target is similar to the third one, but
instead of reaching to locals, they also put efforts in understanding locals. Since COVID-19 pandemic
has accelerated the pace of changes in demands and provided a new opportunity to make some
systemic changes as illustrated above, it is important for Decathlon Vietnam to learn how to coexist
with this period, acknowledging how to be agile, resilient, innovate mundane way of working to shake
up the supply chain.
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 This report aims to discover and analyze the Decathlon Vietnam logistics and supply chain
operation along with some recommendations for better implementation to Vietnamese market.
Decathlon Vietnam showed some challenges regarding localization strategies such as adaptation to
consumer trends, threats when applying international working structure or difficulties in reaching for
rural locals. Furthermore, external factors occured in recent years due to COVID 19 also influenced
the activities of Decathlon. Acknowledging these issues, Decathlon Vietnam cooperated with multiple
partners in different expertise so that they could get specialized support.

Introduction:

Decathlon is a sports retailer company, which was established in 1976 with the first store
opening in Englos (France). The company has 40 years of experience serving in the sports retail
industry with a significant mission “to sustainability make the pleasure and benefits of sport accessible
to the many people '' (Decathlon Talent 2020) . It has over 2,000 stores, across 56 countries in 5
continents, which produced more than 20 passion brands for over 80 sports (Decathlon.co.uk 2020).
Additionally, Decathlon Vietnam was founded in 1995, and until now Vietnam is the second-largest
production for Decathlon after China with 200 million products per year to distribute to many
worldwide stores. Moreover, the company has created jobs for 75,000 laborers and 300 office staff in
Vietnam (Bich Ngoc 2017). Decathlon provided products via e-commerce in 2017 and opened two
mega stores: Tan Phu store (Aeon Mall in Ho Chi Minh) and Thanh Xuan store (Vincom Mega Mall
Royal City in Hanoi) in 2019 (Biz Hub 2019).

The Economist Intelligence Unit (EIU) latest report, Vietnamese retail market recently has
been attracted by foreign investors, and the capital spending is the essential number for retail growth,
which will increase to 1,840 dollars in 2021. Furthermore, the survey has found one in three people in
Ho Chi Minh and Hanoi are sports users, so Vietnamese people have a high interest rate in sports (Sen
2019). Therefore, Decathlon has many opportunities to develop in the sports retail industry in the
Vietnam market. Supply chain management (SCM) is the network of relationships within a company
and its suppliers to manufacture and distribute products to satisfy customer needs, which regards to
many efficient activities of firms such as procurement, production, warehousing, transportation, and
many other mentions to create the economic value to the company (Abdallah, Obeidat & Aqqad

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2014). Supply chain benefits help Decathlon Vietnam improve company performance, customer
services, and reduce operating costs. Also, it offers efficiency for resource management, production
planning, distribution strategy, and inventory control of Decathlon.

This report is provided with the purpose of insight demonstrating Decathlon Vietnam’s supply
chain system and investigates the massive significance of logistics service related to development of
Decathlon Vietnam. Besides, this report will reflect the supply chain network, logistics activities as
well as challenges, and possible solutions in the supply chain processes and logistics’ perspectives of
Decathlon in the Vietnam market.

Identify - supply chain aspect/processes selected:

1. Supply Chain Network:

Channel map of Decathlon Vietnam

 Physical flow:

It is defined that physical flow is the direct transport of products or the supply of resources in
the supply chain. Success at moving physical flow will minimize costs and raise revenue (Crandall,
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Crandall & Chen 2015). Initially, Decathlon Vietnam applied a vertical supply chain for their product
flow which gave the company more ability to provide integrated strategies and become a strategic
partner for its clients (Guan & Rehme 2012). The ingredients are transported to the manufacturers
from their suppliers. Some specific products such as textile and sportswear are produced at local
factories while some oversea-manufactured products have to be imported from CAC warehouses in
Singapore and Malaysia by planes for sea shipment. Then, pallets will be delivered to CAR
warehouses in Saigon and Bac Ninh through truck way for inventory storing and sorting into smaller
pallets. Finally, pallets will be moved to main Decathlon stores in Aeon Tan Phu, Ho Chi Minh city
and Thanh Xuan, Ha Noi. The reverse logistics for returned orders are sent back to main stores by
either delivery services or directly received at stores by employees. After the confirmation process,
these products will be sent back to CAR warehouses and moved to manufacturers where they are
responsible for fixing or dismantle and make into new products.

 Information flow:

Information flow is assessed as integration of information structures, decision-making systems

and business processes used to execute information searches, control business activity and track
business data (Madenas, Tiwari, Turner & Woodward 2014). Information exchange and information
processing are important for communication and cooperation between supply chain partners (Yousefi
& Alibabaei 2015). In Decathlon Vietnam, information flow surged in two directions: starting from
headquarters to retailers and suppliers as well as the opposite. The information will be delivered to
suppliers and manufacturers with the concepts and design so that they could form the actual product.
During this flow, the information will be sent to CAC and CAR where they can check for the quality
and quantity of the pallets and then sent toward stores. Another direction is from stores that are
responsible for sending back the consumer data so that the headquarters could analyze and provide
suitable strategies in the future. For example, it is reported that Decathlon Vietnam uses Base
IMPACTS database provided by ADEME for parts list, lifespan and place of production in order to
improve the internal monitoring process and increase the reliability of data (Decathlon 2017).

 Financial flow:

Financial flow in supply chain includes multiple financial supply chain management activities
that are considered as optimized preparation, monitoring and tracking of supply chain cash flows to
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promote effective supply chain material transfer (Wuttke, Blome & Henke 2013). Revenue from stores
and online payment will be gathered back to the accountant department where they will be calculated
and distributed appropriately for all stakeholders of Decathlon Vietnam including suppliers,
distributors and third-party firms. Digital payment methods are utilized so that the transfers of physical
cash can be minimized, thus cash-related errors are less likely to occur. Changing from cash to
electronic payments will improve profitability by reducing operational costs and making it simpler to
handle trade arrangements, distribution reports and accounts receivable (Klapper 2017).

 Inbound & Outbound Logistics:

Regarding inbound logistics, Decathlon Vietnam works with numerous suppliers and
manufacturers for producing products. The relationship amongst these partners are maintained closely
and perform constant contact with each other. Though Decathlon and its manufacturers are separate
firms, high managerial levels are applied so that Decathlon Vietnam could take control carefully at the
operation. The design will first be provided by headquarters to the manufacturers then pallets of goods
will be sent to the CAC warehouse through the airway and seaway after progress of quality control.
Moving on to outbound logistics, when the pallets are delivered to CAC warehouses, they will be
transferred back to CAR warehouses through seaway and motorway. However, some products like
textile and sportswear, which are produced in Vietnam, will be transferred directly to CAR
warehouses. From CAR warehouses, it will be sorted and distributed to main stores in Ho Chi Minh
and Hanoi, while inventory for e-commerce will still be stored at CAR warehouses.

2. Major Logistics Activities:

 Production:

Production is one of the most important processes in the supply chain system, which occurs
when maintaining efficient planning, supply materials as well as inventory. This process relates to
testing, packaging, and final preparation for delivery (iQualify UK n.d). Moreover, there are two
production methods in Decathlon Vietnam, which are make-to-stock (MTS) and make-to-order
(MTO). Based on Corporate Finance Institute 2020, MTS refers to regular production, which means
the finished product is produced before customer orders. Whereas the MTO strategy is the finished
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product will be manufactured after having confirmed orders. Besides, the production team in
Decathlon has a productive plan to produce products, which satisfy customers’ needs with high quality
and appropriate for everyone. According to an online lecture with the Decathlon team, firstly, the
production team estimates the demand forecasting of customers to consider the number of products
that need to be produced with the lowest possible inventory cost. Secondly, the idea of the product
design and development team will discuss with manufacturer partners and product trials to create the
sample product, which is safe and comfortable for customers. Finally, the company provides the
sample product to test users and based on the feedback of test users, Decathlon Vietnam will adjust the
product and make the final round of production before releasing the finished products in public.
Besides, the company has an awareness that their manufacture and production have an impact on
nature. The Eco concept has been applied in the manufacture operation in Decathlon by using recycled
material, another more sustainable type of raw material, or by significantly extending the life of the
product (Decathlon Vietnam 2020). Therefore, the production of goods and services can achieve at
least 20% less environmental and social harm in Decathlon Vietnam.

Eco-design process in Decathlon Vietnam

 Transportation:
According to Prologics (2021), Transportation in the supply chain is the shifting of products
from origin and destination points, which can start from the supply chain of materials to the final
customers. However, the transportation cost will be extremely high, if an entity does have stations
such as warehouses. Therefore, transportation is an essential part, which makes a business can reduce

10
the external supply chain cost. Decathlon Vietnam has applied the intermodal transportation model,
which is air carries, water/shipments, and motor carriers. Also, Decathlon has cooperated with two
distribution companies in Vietnam: Viettel Post and DHL Express (DHL 2019). Besides, Decathlon
Vietnam does not have their own factory, their products have been produced by many factory partners.
Thus, the transportation flow of Decathlon will be less complex when they only need to manage the
outbound flow. The company has two CAR warehouses located in Bac Ninh and Ho Chi Minh city.
Firstly, the finished product will be supplied from the suppliers in Vietnam to the warehouse by using
moto carries of the delivery partners. From the warehouse, the product will be delivered to the official
store of Decathlon in Hanoi and Ho Chi Minh city, and other retailers. There are many advantages of
freight products in Vietnam because of the motorbikes culture and motorcycle delivery services are
common in Vietnam because it is affordable, faster delivery on the same-day and convenient for both
buyers and sellers whenever freight products (Air Speed 2020). Therefore, the product can be shipped
directly to the customers from the store after having confirmed orders in Decathlon Vietnam. Many
products have been exported to. On the other hand, some of the products in Decathlon have to import
from the CAC warehouse in Malaysia and Singapore. The product is transferred via air carries and
water/shipments, which is taken over by DHL Express to make sure the safety fulfillment product in
Decathlon warehouses.

 Distribution:
Distribution refers to the transportation of the product from the point of production to the
customers in order to meet the business production expectation and customer’s needs (Serdaris,
Antoniadis & Tomlekova 2013). Additionally, physical distribution is the process of the supply chain
relevant to the efficient delivery of finished goods or services to the final users in the right place, right
time, and right quality with the lowest possible cost (Blanchard 2010). Moreover, a successful
distribution process needs to consider some activities such as packaging, inventory, warehousing,
supply chain, and logistics. According to Decathlon 2020, Decathlon distributes more than 20 passion
brands to Vietnamese customers. Besides, Decathlon Vietnam also applies some special strategies
such as “Click & Collect” (C&C) and “Automatic Locker”, which improves the capability of suppliers
and their distribution channels. Firstly, in order to create a C&C strategy, Decathlon Vietnam has
cooperated with many sports clubs and communities in Ho Chi Minh city and Hanoi as distributors to
deliver products to customers. To be more specifics, when customers make online orders and choose
C&C points, the company will immediately provide the ordered product to the chosen sports club. The
product will be available at 5 p.m if the customer makes the order before 11 a.m on the same day with
the free delivery cost. The company believes that this strategy is a win-win-win model for Decathlon,

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sports clubs, and users because it reduces the transportation cost and the lead time of products. The
customer also does not need to pay any extra cost with 5 days flexible time to pick up the product and
they can return the product right away if they are not satisfied. Besides, “Automatic Locker” is a new
strategy of Decathlon Vietnam in the distribution section, the customer can receive their product safety
during Covid-19. Decathlon Vietnam has worked with iLogic to operate this idea to reduce the
transportation cost, which provides 11 accessibility points in Hanoi and 12 accessibility points in Ho
Chi Minh City. The delivery lead time is similar to C&C, but the customer can pick up the product
24/7 while C&C has to depend on the C&C point time. Furthermore, when applying the “Automatic
Locker” strategy, the customer has to pay the product via credit card or electronic wallet first with the
17,000 VND. Overall, both C&C and “Automatic Locker” strategy helps customers find and receive
the product quickly with flexible time and low cost, “Automatic Locker” is also a great way to
maintain social distance.

 Inventory control:
Efficiency of inventory control requires understanding of delays and adjustments, because if
the supply chain is interrupted or subjected to volatility, the competitiveness is undermined and its
income is diminished (Alami, Alami, Hlya & Maataoui 2017). Decathlon has been known for its effort
in investing for innovation through implication of technology along with partnering with companies
who make a reputation through innovative solutions for inventory management. For instance, one
major step of Decathlon Vietnam is RFID system application for improving operation efficiency and
inventory accuracy. Decathlon has launched more than 150 stores globally, all of which imply RFID
systems, and all upcoming Decathlon stores in the future will be completely fitted with RFID systems
(Violino 2016). RFID is a vital enabler to improve consumer engagement and business intelligence
since businesses desire to gather information of real-time consumer preference (Shen, Gu & Yang
2019). Inside warehouses, the goods received from manufacturers required to be sorted for different
channels, which leads toward problems in accurate quantity of a specific sport product. RFID can
track the orders from stores, provide a precise number of pallets for each place and track the
movement of that product inside the warehouse so that it would be conveyed to the right loading bay
for packaging and filled into the right truck. Besides, inventory control also looks into the accounts of
stocks protections which includes solutions for keeping inventory not being damaged or stolen.
Inventory managers are also required to use RFID to examine quality checks, which includes
occasional auditions and accurate data records so that risk could be minimized. In addition to
enhancing the availability of goods on store shelves, the RFID solution reduced product shrinkage by
9% in 2014. The shrinkage still gradually decreases till 2015 (Violino 2016).

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 RFID tunnel reader deployed on conveyor belts at suppliers' factories, monitors
boxes as they are shipped out to Decathlon warehouses

Discussion A

1. Core competence
In general, the core competence of the management is the organization’s knowledge which is
cumulative from the coordination of different production skills. The combination of knowledge and
innovation for the firm able to make full use of its resources and convert those to current and future
competitive advantages in Logistics and Supply Chain Management (Hao-yu at el. 2012). In Vietnam,
Decathlon has a strong relationship with its customers and partners, especially Vincom Plaza and
AEON. Moreover, the company owns an extensive distribution network center to make sure that their
customers will have opportunities to own a Decathlon’s products such as shoes, backpacks or sports
pants for their regular needs and demand. Furthermore, one of the core competencies is the location of
the manufacturing plants which are located in Malaysia, Singapore, Cambodia, Vietnam and Indonesia
because South east asia is reported to have growing workforce along with the emerging middle class,
which potentially bring higher consumer demand for business. However, the most significant thing is
these countries have good positions that could meet the needs, demand and desires of the buyers
across the region and continental. Therefore, the firm has invested in these countries in order to ensure
the quality and improve their demand forecasting as well as production lead time (Decathlon 2020).

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2. Supply chain network issue
Decathlon has applied the two supply schemas, which are push strategy and pull strategy so as
to maximize their potential. According to Decathlon Talk 2020, they said that their products are based
on the customers’ needs and then they will examine all of the feedback and information from
customers to satisfy customers’ demand and order material from the suppliers. However, in Vietnam,
Decathlon could not always apply this schema because of the seasonal products. Specially, Vietnam
does not have snowy weather; which is difficult for Decathlon to sell and do marketing strategy for the
skiing products. Another supply schema supply chain strategy is pull strategy or make to stock.
Particularly, when the material arrives, the firm will forecast the flow of products in order to produce
with large numbers of quantities and provide all of the products to the retailers or wholesalers and sell
to the customers. According to IWMS (2018), this strategy could assist managers respond
productively to adapt customers’ requests while they are making economies of scale inside their
current activities. Moreover, the fundamentals of push strategy including long production lead time,
stock’s accessibility, economies of scale as well as controlling and additionally arranging. However,
pull strategy is described as a better service level of strategy, including costs’ lower conveying, levels
of stock diminishment as well as fewer markdowns (IWMS 2018). Decathlon Vietnam can be
considered as one of the biggest distributors in South East Asia because Vietnam is located in a good
strategic location and has a wide range of human resources as well as natural resources. Thus, they
could probably do unpredictable damage to the supply chain if they just utilize one of these two
strategies. If Decathlon only uses push strategy, it will meet a loss in stock because it would take
manager too much time to recognize the marketplace’s adjustments. In addition, this strategy is not
based on demand forecasting and forecasting is not completely accurate. If they utilize the pull
strategy, they have to face the issue that there would be small and one-off orders which make
Decathlon hard to attain the profit. Owing to these problems, Decathlon Vietnam should change
gradually the pull-push strategies in order to balance these issues and present a better performance to
their partners and customers. According to IWMS (2018), the push-pull strategy also has its own
weakness when the firm has to stabilize the relationship between the unpredictable demands from the
customers and new technology to ensure that products will be in the right line at the right time. Even
though the push-pull helps firms balance their issues, there is still a challenge for them to utilize this
strategy effectively and efficiently (IWMS 2018).

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3. Relationship between supply chain actors:
Since its establishment in Vietnam in 1995 with production activities (Vietnamnews 2019),
Decathlon Vietnam has been operating for 26 years and has formed many relationships between
suppliers and manufacturers that contribute to the finishing process of products with the best quality.
In the upstream flow, the company purchases materials and fabrics obtained from the designated,
locally sourced ingredient supplier from the suppliers. Then, they are shipped to warehouses from
domestic companies or imported by international shipping. Because Decathlon Vietnam and its
suppliers agree on independent logistics services based on trust, cooperation, risk sharing and
investment as well as following the mutually agreed goals to contribute to the specific logistics they
specialize in so their relationship can be classified as horizontal relationship (AIMS n.d.). For
example, local production groups operate from Decathlon manufacturing offices, in charge of day to
day supplier relationships. With their suppliers, they share a desire to deliver the best possible value
for money by working closely with each other using a common framework based on respect, team
development, quality and environmental protection. Besides, suppliers can also be manufacturers of
products because they are a group that works closely together and manufacturers expect suppliers to
sell multiple items (Oberlo n.d.). Based on Decathlon's online lecture, they said that the essential role
of connectivity in the supply chain is that manufacturing is done and has a high degree of control by
the company's production team. For instance, the variety of manufacturing processes involved in their
diverse products (textiles, seams, electronics, metal equipment, etc.) means the supply chain of a
company is extremely complex, such as when it comes to controlling volume, quality and
accountability extensions. We recommend that Decathlon should address this complexity by 2026 as
they hoped through increased cooperation and transparency with 150 partner suppliers who will
produce 80% of their product to achieve an efficient supply chain and currently have 45 partners by
the end of 2018 (Decathlon Sustainability 2018).

4. Technological changes’ effects on the supply chain

The development of technology in modern society has been breaking the limit and alternating
how the world runs business generally and in Logistics and Supply Chain Management (LSCM)
particularly. In reality, there is more number of logistics companies having invested in technology
adoption to establish a seamless, successful supply chain collaboration. Thus, the utilization of
disruptive technology in the LSCM industry not only improves the quality and quantity of production,
but it also minimizes the operating costs and failures, which could become beneficial to the entire

15
logistics and supply chain (triskelogi 2020). It is essential for Decathlon Vietnam to adapt technology
to retain a veritable competitive edge. Recently, according to Pranav 2018, Decathlon is using IoT
technology for all of its stores in all over the world, such as RFID (radio frequency identification
device), from Checkpoint System in more than 400 of its stores (including Vietnam) and plans to
extend this technology to millions of products across the world. With the assistance of RFID,
Decathlon’s products can be delivered to vendors with 100% accuracy and items arrive shelf-ready so
that it could save employees time by not checking manually each delivery. Thus, by applying Quechua
to IoT in the company’s warehouse, the company products’ quality can be improved because the
warehousing condition is qualified (IoT For All 2020). However, there are some weaknesses in IoT
technology, especially RFID. Security threats are the priority considerations for Decathlon to improve
their IoT. According to Pranav 2018, IoT networks also have various security challenges that need
tackling head-on. Cybercriminals can hack into the device to change products’ information, prices to
control and steal the finance or benefit from selling these products. Furthermore, cyber-attacks could
damage the reputation as well as erode customers’ trust, which results in negative impacts on
relationships between firms and partners, investors, clients or even other third parties. As a
multinational company, Decathlon should use the massive data effectively and efficiently by
implementing Big Data analytics to analyze and extract information from complicated and large data
sets (Kiran 2019). Hence, it supports firms to fulfill the requirement of the information age by
enhancing the logistics resources’ allocation, stimulating the improvement, and the logistics industry’s
transformation.

Discussion B

Challenge 1:
Due to the distant occurrence of an abundance of unexpected events, the distribution of goods
among nations is still being negatively affected.
According to the Import and Export Department (Ministry of Industry and Trade of Vietnam),
in 2021, Vietnam's distribution of goods is forecast to grow more positively than in 2020 after many
countries begin to loosen control of the disease and begin to speed up the recovery process with the
opening of transactions (Phan Trang 2020). However, the report highlighted that despite the fact that
Vietnam is excellent acquired a high reputation for dramatically controlling the spread of Covid-19,
the nation's exports and imports may continue to encounter unpredictable factors in the future;
especially when the pandemic situation has not been thoroughly controlled like in the current period
and probably be much more difficult to achieve positive results like the previous year. Therefore, as a
16
subsidiary of a multinational company, Decathlon Vietnam has also encountered a wide range of
problems related to cargo transportation (Kieu Anh 2020). First of all, Vietnam has assumed the role
of Decathlon's second-largest production country for the past period, where import-export is
indispensable for businesses to distribute finished products to the other Decathlon company
throughout worldwide, but because of the pandemic, countless restrictions, conditions, and testing are
required to be strictly obey throughout the transaction that has made their lead time in the time to
market increase remarkably as well as the transportation cost too (Decathlon 2020). Moreover, in
addition to the 'lockdown and shutdown event', 2020 is also the year with many historical events
negatively affecting the distribution of goods in Decathlon transport flow. For instance, from the end
of 2019, there was a strike in France (the location of Decathlon's parent company) that dramatically
occurred for roughly three months, causing the delivery of goods from Vietnam to France to be
stagnant for more than a month, which interrupted the distribution process flow between Vietnam and
France, as well as creating a host of timing and expense losses ( Amiel 2020 ). However, up till now,
Decathlon still has no better solution to this problem other than tighter collaborating with DHL,
Decathlon's delivery partner, in order to plan in more detail about shipping steps during this volatile
period ( not reached their expectation of lead time in the time to market yet) ( Decathlon 2020 ).
Hence, in my perspective, Decathlon could be more efficient in the future if they could collaborate
with more third-party logistics throughout their supply chain in order to stay focusing more on their
core competencies and decrease the time to market while still having the 3PLs implement their field of
expertise throughout the business operation process ( Trentin 2020 ).

Challenge 2
Difficult to sustain the trend due to the rapidly changing consumer behavior and owing to the
limited number of official stores, Decathlon Vietnam has not wholly reached the potential
customers' satisfaction in other regions.
Customer's need changes can also be a challenge for logistics supply chain management.
Changes in consumer trends and rapid economic globalization have affected consumer behavior. A
brand that fits into a superior value has a much higher chance of success because companies often
need significant lead time to launch a new product or reposition an existing one, which is important to
track the consumer's position to catch up with the customer's buying trend (Michael Solomon n.d.).
This has led to some difficulties as Decathlon manages its supply chain. Firstly, it is difficult for the
company to maintain trends due to rapidly changing consumer behaviors even though they have
approached the market from a user-observing perspective. Therefore, it is essential that they should set
17
up a demand forecasting department to identify future consumer trends to predict consumer demand
for a company's products. Moreover, using consumer trends makes Decathlon always able to track
changes in the market and use the data they collect from those observations that can add to its
customers' personality to make better decisions about future product development (Heather Redding
2020) contributing to increased agility and flexibility in SCM. Secondly, owing to the limited number
of official stores Decathlon Vietnam has not wholly reached the potential customers' satisfaction in
other regions. To improve this restriction, Decathlon needs to survey the market in neighboring areas
outside Ho Chi Minh City and Hanoi such as Da Nang and Can Tho in order to explore new
opportunities to generate more sales. In a mass production environment, the decision to grow the
business by branching into another area of the market based on the changing market trend is extremely
important, it will help Decathlon reach out and quickly adapt to the market and expand its customer
base when the time is right (Heather Redding 2020).

Challenge 3:
China–United States trade war has had a significant impact on Vietnam's logistics costs.
Over the past period, the dispute of trade among the two world's top economies, the United
States of America and The Republic of China, which has continuously used tariffs as a way to retaliate
against each other, make a remarkable impact on the trade markets of the rest of the world; in which
Vietnam is not an exception since the US and China are the leading trading partners of this nation
(Tien et al. 2019). Therefore, in the case of Decathlon, they have reported that one of their
backlogging problems that is directly affected by the trade war between the US and China is Vietnam's
logistics costs are rising higher compared to the general level of the world as well as neighborhood
regions (Decathlon 2020). Specifically, Decathlon informs that their statistical import costs in Vietnam
are outnumbering the figure for the import cost in Thailand by roughly 2 to 1, which is the difficulty
that the company identifies while bringing goods to Vietnam (Trí Thức Trẻ 2019). Moreover, raw
materials from China tend to be transported in large quantities to Vietnam in order to avoid US
taxation (Das 2018), which is considered a disadvantage for Decathlon. Because up till now, all
materials using for produce Decathlon's products are just under controlled by themself, which means if
the higher number of material that require to be tested and check before officially manufacturing, the
slower the lead time since the testing product process need a quite long time in their operation flow
(Decathlon 2020). Therefore, to cope with this problem more effectively, Decathlon in current is
planning to leverage the know-how of their suppliers and manufacturers to maximize the goods'

18
timing as well as increasing the diversity and the availability of Decathlon's product to customers
(Decathlon 2020).

Conclusion
To recapitulate, there are three potential issues that affect Decathlon's efficient supply
chain strategy analyzed by this report. Firstly, given a lot of unanticipated events such as
pandemics, conditions and testing that were required to be strictly followed throughout the
transaction, which made their lead time in time to market has increased significantly as well
as shipping costs, so the distribution of goods between countries is still being negatively
affected. Moreover, 2020 is also the year with many historical events that negatively affect
the distribution of goods in Decathlon transport flow. In this case, if they could collaborate
with more third-party logistics throughout their supply chain to continue to focus more on
core competencies and reduce marketing time while remaining having the 3PLs practice their
area of expertise throughout the course of their business to be more efficient in the future.
Finally, it is difficult for Decathlon to maintain the trend due to changes in consumer trends
and rapid economic globalization affecting consumer behavior. Therefore, this report
recommends that they establish a demand forecasting department to identify future consumer
trends to predict consumer demand for company products. In addition, this report also
suggests Decathlon needs to survey the market in the surrounding areas outside Ho Chi Minh
City and Hanoi to find new opportunities to generate more sales. Finally, they are directly
affected by the trade war between the US and China, causing Vietnam's logistics costs to rise
higher than the general level of the world and the vicinity of the regions. It suggests that
Decathlon is currently planning to leverage the know-how of their suppliers and
manufacturers to maximize the lead time of the goods as well as increase the variety and
availability of Decathlon products for customers.

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