Nike and Adidas, as the world's top sports brands, have long relied on OEM/ODM models for production. So why do these giants choose contract manufacturing instead of producing everything themselves?
Cost effectiveness is one of the main reasons. Large sports brands need to produce millions of products each year, and building and maintaining such a large production facility can cost a lot of money and resources. By partnering with foundries, these brands can take advantage of the economies of scale of Oems, decentralize production on a global scale, and significantly reduce manufacturing costs. This also allows them to spend more money on research and development and marketing.
Global supply chain management is another important factor. Nike and Adidas sell their products in many countries and regions around the world, and by working with local Oems, they are able to establish an efficient supply chain network to ensure that products can be quickly transported from the factory to the consumer. Foundries are spread around the world, allowing these brands to flexibly adjust production plans according to the needs of different markets and improve market response speed.
Technology and professionalism are also a key reason for brands to choose foundry. Although Nike and Adidas have a world class level of design and branding, in some specific production technologies and material applications, Oems have more experience.
Risk diversification is also one of the advantages of the foundry model. Demand in the sportswear market is volatile, and through contract manufacturing, brands can be more flexible to respond to market changes without worrying about excess or insufficient capacity in their own factories. Brands can also use multiple foundries to spread production risk and ensure supply chain stability.
Therefore,
Nike and Adidas choose contract manufacturing not only to save costs, but also to take advantage of the global supply chain, technical expertise and risk diversification, so as to maintain the competitiveness of the brand in the global market. This is why more and more sports brands are starting to follow their lead and adopt the OEM/ODM model.
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