The Sourcing Organization

PUMA Group’s sourcing functions, referred to as PUMA Group sourcing (PGS), manages all sourcing related activities for PUMA and Cobra, including vendor selection, product development, price negotiation and production control. These activities are centrally managed by PUMA International Trading GmbH (PIT), the group’s global trading entity, with its head office in the Corporate headquarters in Herzogenaurach (Germany). In addition, PIT is responsible for procurement and supply into the PUMA distribution channels worldwide. PIT receives volume forecasts from PUMA subsidiaries and licensees worldwide, translates these forecasts into production plans which are subsequently distributed to the referenced vendors. The PUMA subsidiaries confirm their forecasts into purchase orders to PIT, which in turn consolidates these requirements and purchases from the vendors. There is a clear buy/sell relationship between the sales-subsidiaries and PIT and between PIT and the vendors, for added transparency.

The centralization of both the sourcing and procurement functions, along with the rollout of a cloud-based purchase order collaboration and payment platform, linking the sales-subsidiaries, PIT and the vendors, has enabled the digitalization of the supply chain creating transparency, operational efficiency and reducing complexity. For example, container fill rates are optimized, foreign currency risks are managed by PIT directly via a centralized currency hedging policy, and all payments to vendors are automated and paper free.

In order to meet our customers’ requirements concerning service, quality, social and environmental compliance we focus on six core strategic pillars of collaboration, product, quality, growth management, margins and landed cost, and sustainability. The centralization of sourcing and procurement allows for continuous improvements in all of these areas. Furthermore, the integration of the PUMA sustainability function (social, environment, chemical and occupational health and safety) into operations, since 2016, has ensured these areas are part of our day to day business.

In 2019 further operating improvements were realized in sourcing, in particular with regards to the centralization and standardization of processes and systems, capacity management and data analysis. To avoid production peaks and subsequent delays on product availability, sourcing has proactively coordinated ordering windows for earlier production visibility and additionally, reduced production lead time by prepositioning supply of materials. Short-lead time programs have been further increased to react on latest developments and trends in the markets. In this regard sourcing has extended its local supply chain for the China sales-subsidiary to provide the right organizational setup with a focus on design, costing and lead time. To mitigate the negative impact of the international trade environment, alternative sourcing locations have been allocated for the US market in the fourth quarter of 2019.

2019 saw the continued growth and expansion of the PUMA Vendor Finance Program for our suppliers. This innovative program launched in 2016 allows vendors to be paid earlier and the rate of interest charged is dependent on their sustainability performance. PUMA developed this program initially with the International Finance Corporation (IFC), the trade finance arm of the World Bank. The program has been expanded for the first time to include private international banks. Since the program is based on PUMA’s credit rating our vendors are able to benefit from the best possible interest rates and maintain their own lines of credit.