Sourcing 4.0 in sports business: the future of procurement is digital

The sports industry needs a realignment of the process chain with much more speed and a stronger focus than before on the actual trends and needs in the market. Just continuing to turn the cost screw will not help in the long term. This realization is gradually gaining ground among many sports companies and retailers.

While production in the Far East is often difficult to control and manage today, digitalization will become a game changer for sourcing as well. At the Ispo Digitize Summit, Mammut and the Berlin-based start-up Foursource, a digital B2B sourcing platform that connects manufacturers with buyers worldwide, talked about why we need a realignment and how it can be realized.

The market demands ever faster customization times and the customer is more informed than ever before. "Predicting what customers want is increasingly becoming a guessing game," explains Oliver Pabst, CEO of Mammut. Today, when trends can emerge within days and achieve global significance thanks to the Internet and social media, product development in the sports industry, which alone consumes 80 to 150 days, seems hopelessly outdated. Twelve months can easily pass before the product is finally produced and delivered. As a result, by the time the consumer is supposed to buy the product, it's actually already old hat.

It's no wonder that many collections look more and more alike. Everyone is playing it safe, because no one knows what will be popular in a year's time. What's more, it's not possible to replenish production quickly enough if surprising bestsellers emerge. Everyone knows that this months-long process chain does not work well: market saturation is increasing, margins are falling. It only works anyway because there have been no alternative sourcing models so far. At the same time, consumers want more individualized products. The demand is therefore obvious: we need new solutions to finally be able to react faster and more flexibly to new trends in the market.

"If, like many big brands today, you know just 50 percent of your supply chain," explains Jonas Wand, CSO of Foursource, "you can't react quickly to trends. You don't have control over your process chain." To change that, Jonas Wand and Godecke Wessel founded Foursource in 2016 as "a kind of parship for the textile industry." Both come from the apparel business, Wessel was at Falke for a long time, Wand at Bogner. With the digital B2B procurement platform, they connect manufacturers with buyers worldwide.

They want to use it to create more transparency in the global, highly fragmented procurement markets and establish better standards. "Suppliers and brands can connect via the platform, brands can post orders and producers can offer free capacities," Wand continues. An algorithm brings together suitable partners, while Foursource ensures the correctness of the information by validating the respective partner profiles. Wand is convinced that this will make the entire process chain simpler and more efficient. 1,500 producers and more than 350 brands from the entire textile industry are already active on the platform.

It's not just about enabling more transparency. "We have to completely reorganize purchasing," the Mammut CEO continues. Instead of aligning purchasing with the planning process as before, he wants to make it demand-oriented. While today expensive trend forecasts often still form the basis for the lengthy product development process, in the future development will only begin when the need actually becomes apparent.

His vision: "From trend to retail in 30 to 40 days." That's huge for the sports industry, but no longer a big deal for the fashion industry. Inditex, as a fast-fashion pioneer, already manages product development and production within a week.

In the long term, the digitization of the supply chain will also mean that competition among production companies will grow and there will be more fluctuation within the sourcing partners. Moreover, only those companies that join or can join digitization will be able to survive.

More transparency and competition can also accelerate progress on the production side in the area of sustainability. In the past, quick changes were hardly possible because each new production partner meant a great deal of effort for the company. Pabst: "So far, we have been relatively limited in sourcing to our existing partners; in the future, the whole world will be open to us."

“If, like many major brands today, you only know 50 percent of your supply chain,” explains Jonas Wand, CSO of Foursource, “you can’t react quickly to trends. You have no control over your process chain.” To change that, Wand and Godecke Wessel founded Foursource in 2016 as “a kind of matchmaker for the textile industry.” Both come from the clothing business, Wessel being a long-time Falke employee, Wand with Bogner. With the digital B2B procurement platform, they connect manufacturers with buyers worldwide.

They want to use it to create more transparency in the global, highly fragmented procurement markets and establish better standards. “Suppliers and brands can connect via the platform, brands can tender contracts, and producers can offer free capacities,” Wand continues. An algorithm brings suitable partners together, with Foursource ensuring the correctness of the data by validating the respective partner profiles. Wand is convinced that, this way, the entire process chain can be made simpler and more efficient. 1,500 producers and more than 350 brands from the entire textile industry are already active on the platform.

It’s not just about facilitating more transparency. “We have to completely reorganize purchasing,” the CEO of Mammut explains further. Instead of aligning purchasing with the planning process like before, he wants to make it demand-oriented. While today, expensive trend forecasts often still form the basis for the protracted product development process, in the future the development should only be started when the demand actually becomes apparent.

His vision: “From the trend to retail in 30 to 40 days.” This is huge for the sports industry, but no longer a big deal for the fashion industry. Inditex, as a fast-fashion pioneer, manages product development and production within a week.

In the long run, the digitalization of the supply chain will also mean that competition among production companies will grow, and there will be more fluctuation amongst sourcing partners. In addition, only the companies who will join or be able to join digitalization will be able to survive.

Greater transparency and competition can also accelerate progress in sustainability on the production side. Until now, rapid changes were barely possible because every new production partner meant a great deal of effort for the company. Pabst: “Thus far, we’ve been relatively limited in sourcing to our existing partners. In the future, the whole world is going to be open to us.”