Risk Analysis:

Deriving a risk management plan for the reshoring efforts within the United
States of America for the Adidas Company involves an analysis of several variables.
Recall, that the reshoring initiative involves striving to maintain its manufacturing plants
and industrial resources locally near their California based headquarters. Such a project
encompasses the need to develop very honest and realistic risk profiles; within the risk
profiles we can address various questions surrounding the multiple facets and directives
of the reshoring project.
General Risk Management:
Identification: This step is all about observation and making attentive actions toward
realizing when a risk materializes.
Assessment: This step recognizes the severity of each risk and given a rating between
1 and 5; 1 being very low risk and 5 being very high risk. This score is determined by
the possible negative effects it will have on the project.
Response Prioritizing: This step categorizes risks based on their complexity, or time to
fix. The more complex the more time it will take to handle so those risks must be acted
upon first.
Control: This step is all about damage control and how a risk can be prevented in the
future. Determining the cause of a risk is also a part of this step.

Risk Matrices:
Risk Title: Project over budget
Description: The cost of the project went over the projected estimate.
Impact Areas: Cost_5_ Schedule_2_ Quality_2_ Scope_2_
Severity of Impact: _6_ Probability: _4_ Risk Factor _13_

Risk Matrices: (Table 8): Continued..

Risk Title: Poor Communication
Description: Communication has come to a halt between management and project
teams.
Impact Areas: Cost_5_ Schedule_4_ Quality_4_ Scope_2_
Severity of Impact: _10_ Probability: _4_ Risk Factor _18_

Risk Matrices: Continued..

Risk Title: Manufacturing Delays
Description: Processes in manufacturing came across too many unforeseen obstacles.
Impact Areas: Cost_3_ Schedule_4_ Quality_3_ Scope_2_
Severity of Impact: _10_ Probability: _4_ Risk Factor _18_

Risk Matrices: Continued..

Risk Title: Testing Delay
Description: Due to scheduling errors and poor weather testing was delayed.
Impact Areas: Cost_2_ Schedule_4_ Quality_2_ Scope_2_
Severity of Impact: _6_ Probability: _4_ Risk Factor _13_

Risk Profiles:

Is the risk of shutting down all foreign based manufacturing for the Adidas
Company justifiable?

The answer to this question is certainly no, for several reasons; one of the reasons
is that Adidas suggests from its 2013 data that its Sportswear total market value is
$255.1 billion; Western Europe and North America are the highest contributions to this
total value, but the presented values, do not show inflationary effects or exportation and
importation counts for all regions. Apparel and Footwear, possesses a market value of
$1771.6 billion, with the highest recorded values within Asia Pacific and Western
Europe. Yet another reason to discredit the sole movement of all non USA
manufacturing plants to the United States.

Would the reshoring of only China based manufacturing plants be a benefit to the
Adidas Company?

To address this question, we need to understand the current infrastructure set in

place for Adidas. Publicly disclosed is the companys Global Factory List of Primary
Suppliers, this information is disclosed from an industry leading website, known as the
Fair Factories Clearinghouse (FFC). Please note, that these tables and its information
will be listed in the appendix.
From the data we can see that Adidas
currently has a large and diverse list of global
locations in which they conduct their product
operations. After looking over the data we can
see that the two largest manufacturing locations
are currently within China and the United States.
This should be evidence to support the United
States reshoring project, but in fact it doesnt.
Throughout a review period during 2013, we can
compare Nikes and Adidass current standings
within the Chinese sportswear market.
Shown in the table to the left, Adidas group and
its products seem to show its dominance
throughout China, even to the extent of topping
Nikes position in the Chinese marketplace.
Thus, moving or relocation of the China based
manufacturing plants isnt justifiable with respect
to exportation and importation cost.

Overall Risk Factors:

Risks that surround the overall reshoring of China based Manufacturing plants,
should encompass events such as the closing of China based Plants, letting go or the
termination of current plant employees, and the potential loss of specific local resources
and key relationships. These actions could affect specific parameters such as quality
control and its margins, also if future possible favors from established relations within
the Chinese marketplace.
Another more important factor could be the loss of established product quality
margins; this potential loss of quality could be preserved by implementing certain
intensive preservation measures, such as securing specific specialist personnel, and an
establishment of vigorous training seminars for newly hired personnel, in the new
locations. Overall, this should be taken into consideration when determining the
necessary budget for Adidass reshoring budget.
Addressing the USA market place, should involve a minor analysis of
Environmental Standards and of course any Union based policies that could produce an
increase in budget. Also, specific manufacturing Oasis guidelines that were not
associated with in Chinas governed standards of manufacturing.
There is a potential short cut to this analysis by working with the current
established Adidas manufacturing companies that are operational within the United
States; more specifically hiring quality personnel and supplying airfare to the chosen
facilities for pre-launch date training. Another option to speed up training within the
newest manufacturing facilities could result from singling out qualified personnel from
within United States plants and offering relocation packages for expedited training
seminars for upcoming opening dates of the latest facilities. A general learning curve
can be established once the first candidates are trained and allowed to begin
manufacturing trends.
I must reveal that most of the data for the above mentioned processes are
formulated merely using theoretical measurable data; but could prove necessary if the
Chinese inflation costs that surround its manufacturing standards continue to increase.
Thus, the favorable risks seem highly hidden within the broad spectrum of the
theoretical side of a What if analysis.
Adidas has currently established a favorable business model, involving their
strategic placement of their manufacturing plants within it growing marketplaces. In fact,
currently Adidas has revealed their current facilities are nothing but efficiently placed in
relative responsive areas that promote prolific and profitable measures for their intended
geographical chosen locations.

Transportation Delays of Manufacturing Equipment:

Weather delays and poor shipment conditions could produce a budgeted delay
and loss of reserve budget, if shipping containers are poorly addressed by key
personnel. Thus, a beneficial reduction in risk and stress could be welcomed throughout
our project by the hiring of a third party company to assume the risk of our highest priory
shipments to the US plants. Of course insurance policies and shipment incentives may
be necessary to avoid damaging production losses, but overall a necessary measure to
minimize overall risk factors during the reshoring initiatives.