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, environmental and chemical) into PGS, ensures these focus areas are part of our day to day business.

This year has been exceptionally challenging for almost all parts of our business and not least for our supply chain, especially in the first half of the year. When the COVID-19 pandemic first hit China and other parts of Asia, our suppliers had to close their factories or could only operate at reduced capacity. We immediately focused our efforts on tracking and restoring production capacities with our partners. As the supply chain situation in Asia improved, Europe, America and the remaining parts of the world were impacted by COVID-19 and consequential lockdowns. Many stores of our wholesale partners, as well as our own retail stores, had to close temporarily and therefore no longer accepted new products. From the beginning we emphasized the responsibility to find solutions in such exceptional circumstances together with our partners. We wanted to sustain the entire value chain and get through this crisis together. PUMA cancelled very few orders with suppliers, in total less than 1% of the total order volume 2020. We agreed with some suppliers on longer lead times in order to react to the decreased demand in the sales markets. We were in close conversation with our manufacturers, customers, lessors, banks, logistics partners and other partners to find solutions and, for example, to extend payment terms in order to spread the burden of the COVID-19 pandemic across the entire value chain.

Another key aspect to mitigate the impact on the supply chain was the PUMA Vendor Financing Program, which has been in place since 2016 and saw increased adoption among our partners during this year. The program allows vendors to be paid earlier and is based on PUMA's credit rating. The International Finance Corporation (IFC), the banks BNP Paribas and HSBC, as well as our newest partner Standard Chartered, offer our suppliers attractive financing conditions and the opportunity to maintain their own credit lines under this program.