Peter Burrows, CIO Emeritus, Talks About High Performance Product Innovation with PLM.
Adidas Group is a global company that designs and manufactures sports clothing and accessories, employing more than 46,000 people in over 160 countries. They produce a vast number of products, including many different lines and seasons. With a complex portfolio of products, adidas wants to keep things simple.
A big step towards achieving this simplicity has been implementing a single system to support many of their business processes, including a single repository for materials management. By moving from Excel to a comprehensive PLM solution, adidas now has a single source of information and visibility into product, supplier, and regulatory information across all regions.
Implementing PLM has also helped adidas accelerate their time to market, from product development through in-store delivery. As market and consumer demands increase and the number seasons and styles expand, adidas has made reducing time to market and production a focus. They have been able to meet these targets without reducing product quality and enhance their overall supply chain agility through better visibility and earlier and continuous involvement with merchandising, design and product development.
Announcer: Ladies and gentlemen, please welcome CIO Emeritus and Head of Enterprise Architecture Global IT, Adidas Group, Peter Burrows.
Peter Burrows: Good morning, everyone. I have to explain – one of the things everybody keeps asking me is is it called a-di-das or Adidas? And it's actually called both. In the United States, most people refer to it as Adidas; in Germany, we refer to it as a-di-das.
In the video, you saw a video clip about Puma and Adidas, and I probably should explain for those of you who don't know that the original company was founded by a gentleman by the name of Adi Dassler, which is the origin of the name. He had a brother, and they had a big fight many, many years ago, and his brother wanted to focus on fashion, and Adidas wanted to focus on performance footwear. So the brother moved across the river in a small town called Herzogenaurach in Northern Bavaria, and he started a company called Puma. And Puma and Adidas have been fighting ever since, and this past year was the first time they ever got together in a soccer match. So that was kind of an exciting moment for us.
I'd like to start by saying that in a meeting like this in our company, we normally would start with a sporting event. We might do a 5-mile run, we might do a downhill ski race or perhaps a soccer or football match, and I obviously can't do that today. But what I can do, just to get everybody out of their seats, is I really would like to know who is rooting for my Boston Celtics? Would you please stand up? All right. Thank you. And how about – should we give equal time to LA? Is anybody here rooting for LA? You guys want to stand up? Nobody stand up, please. And by the way, the match is on tonight.
But that's what our life is like. Our company is about sport, and it's an exciting place to work. We strive to be a global leader in the sporting industry, where sports brands built on passion for sports and sporting lifestyle. I think that it's a fun place. We like to work hard, we like to play hard, and we like to go fast.
Now, some of us commute to work at 150 mph on the Autobahn. I happen to commute to work at 550 miles an hour on an airplane, because I live in Boston and I work in Germany. However, when we get to work, we also like to go fast, and it's a very fast-paced environment. I can't tell you how much fun and excitement it really is, but I'm going to show you a little bit of what we do in product development, and you'll get a sense of that.
First of all, you saw in the video that we have four main brands, but we also have a lot of sub-brands that you're probably not that familiar with, things like Y-3, Stella McCartney, classics brands like Reebok Classics, Adidas Originals. We create lots of brands all the time to meet particular market requirements.
We have a company division called Mitchell & Ness for example that has all the rights to all past uniforms. If you felt that you really had to have an original Babe Ruth uniform, you could actually get that through Mitchell & Ness. So it's constantly looking at the marketplace and opportunities to expand.
We're just a little bit more €10 billion in sales, about 40,000 employees, and we're located all over the world, with 177 subsidiaries. So you can imagine from an IT point of view the governance associated with that broad an organization is somewhat of a challenge.
The revenue is equally distributed around the world. You can notice there’s a couple of places, emerging markets like greater China and emerging markets in Europe like Russia, which are probably our fastest-growing marketplaces. We've been early in those markets, and we've been able to capture significant market share.
So, I've been listening to the conference yesterday and looking at all of the technical products on the floor. No one is surprised by the engineering required in these complex products. It's not a surprise to any of you guys who do this kind of work. However, consumer products engineering is simple, right? And not much coordination is required in an organization like ours, right? Obviously, the answer is ‘wrong’.
I want to show you a little bit of the complexity that occurs in a consumer product company and with the number of products that we happen to have. Now, start by just looking at a typical footwear inline calendar. It takes about 18 months to bring a new shoe to the marketplace. So we're trying to guess 18 months from now what you might want to wear, what sport you might want to play, what color you perhaps would like, what fabric would probably work in terms of the choices that are coming.
So there's a constant view to the future, and we have to bring these products to marketplace. There's a lot of gates that products have to go through, and this happens to just show the gates associated with the development of the product itself.
When you see something called ‘commercialization’, it also means we have to get a marketing story behind products, where we have to pick an athlete perhaps who's going to wear or test the product. We have to get catalogs printed. We have to be able to put signage in particular stores in retail. So it's a very, very complex environment, and we have thousands of products going through this at the same time.
So just to kind of recap a little bit of what goes on, thousands of new products every 180 days. We have two main seasons a year, spring and Christmas, or back to school. Everything is organized around collections or seasons. So even though we might have 3,000 products coming out, they all have to come out at the same time. They have to meet retail introduction dates. They have to meet sporting events, like World Cup this month.
A new season actually replaces about 80% of the products that were introduced just six months ago. So we have constant churning of product, and we're working on 5 to 7 or even more seasons at the same time. A product developer in our environment is perhaps working on a product that's just ready to launch at retail, but they're also working on a concept that's maybe 18 months into the future. And we have special needs where we'll see something in the marketplace that we think is going to be hot; we can push product through the same process in less than 90 days.
Our industry requires physical samples to be able to test, approve, and sell, and the logistical needs of handling samples to the entire sales force all over the world is pretty significant.
We outsource 99.9% of our manufacturing in 1,000 partnership factories in Tier 1 and 1,500 Tier 2 material suppliers. We have 100,000 active articles at the same time. We're producing 750,000 bulk PO's on factories every year and 800,000 sample PO's.
The challenge of dealing with outsourced manufacturing when you're a well-known brand, we’ve also have to deal with the issues of making sure that our factories are complying with human rights, environmental requirements. We’ve done quite a bit of work and been a leader in establishing new standards in our industry, and that was part of the reason, if you look in the background, that we actually started a nonprofit collaborative cloud platform for competitors to actually collaborate around factory inspection called the Fair Factories Clearinghouse.
All of our materials have to be tested and approved before being included in any product. No material is allowed into any product without us saying it belongs there. We have to produce these physical or virtual samples six months prior to the order acceptance. So we have to finish the prototypes, we have to get all of the engineering work done, get those into the hands of the salesforce, and then of course we have to coordinate with marketing and for advertising and athlete connections.
So if you think it was just complex on that basis, I want to tell you a little bit more about what happens. Products and footwear are designed around a sample size; size 7 for women, size 9 for men. So they start as a single size. We then have to expand those to additional sizes, colors and materials. A typical footwear product could have 30 different sizes, and there is no mathematical formula unless you go from a size 9 to a size 10. All of that work has to be done by engineers who understand the differences between sizes in the human foot. That is why it was very important for us to have technology that could inherit the characteristics of a sample size and then move that up and down a size range without an awful lot of rekeying.
We also expand products that will start in a particular category. They might start in walking. The next thing you know, they'll end up in running. They may start as an adult product, and be taken down to kids. The technology could move over to a walking shoe, dress or casual.
We also have special makeups for retailers, and all the time we're continuing to proliferate the number of SKUs that we’re dealing with. The retailer will say, I love this new concept, but I want to have a special color just for me, or, I want to have a special material just for me, or, a special bottom just for me, so I can differentiate myself in the retail marketplace.
And then the last expansion is we also – if you go to our websites, you can actually build a product just for yourself, and it's very popular today for young people to do that. You can actually customize the color, materials, and actually have that shipped directly to your home just in a matter of days.
Apparel goes through a similar process. Products start as a single men's or women's sample size; again, expands through sizes, colors, fabrics. We then take many of those same things into uniforms, home, away, sideline, off the field. We do customized apparel for specific retailers or for specific individuals or teams, like team shirts or player names, even all the way down to a high school team. Corporate country club, a lot of country club customization of embroidery of logos onto shirts or golf shirts. Fast response graphics for special events – I'll show you one more slide on that in a minute. And again, obviously customization at the individual level.
We're also global in terms of product development. We have 9 product creation centers close to the markets. We have sourcing locations all using the same sourcing systems, but located also closer to markets. 10 manufacturing hubs, and about 85 places that we actually have to deal with product information for distribution to customers.
I'm going to give you a couple of examples, and then I'll tell you the story of how we started with PLM and where we are right now.
The first example is a product called EasyTone from Reebok. One of the things that's interesting in our environment is engineers will sit around and say, gee, let me think out of the box, and somebody was saying, you know, when we engineer footwear, one of the primary things you're trying to do is put stability into a product. People want to be stable when they're walking. But somebody said, what would happen if we took the stability out and put instability into the product? And they all of a sudden discovered in terms of the measurements that you can actually produce better toning, and they found that the toning benefits of having a shoe that is somewhat like a balance ball is very significant. So while you're exercising or walking or running, you're actually improving your toning.
There’s a case where the product was introduced just a year ago, already sold over 5 million pairs in 2010, and the volume is growing absolutely incredible right now. This thing has really hit a point where it's created an entire new category called Toning.
But the complexity that went into this shoe is 24 months in development. It's unique two-part air moving systems, internal component is manufactured in the U.S, it has to be moved to Asia for manufacturing, and over 20,000 hours have to be devoted to wear testing the product to get it right. So you can start seeing the complexity of just one product, and of course, there's many, many other products going through the process at the same time.
Another product from Reebok is called ZigTech, and this is the exact opposite of EasyTone. EasyTone takes more effort to wear the shoe. ZigTech came out of interviewing with some athletes, particularly NFL running backs, who said, after I've been beaten up in a game, I want to continue to exercise during the week, but I've got to have something that has less strain on my muscles and joints and yet still lets me perform my workout.
So here's a case where a product was invented, again, out of the box thinking around a totally different concept. It was introduced in April of this year, already sold 1 million pairs, being introduced globally. This is also taking off, and it's called ‘an energy drink for your feet’. The bottom was actually kind of envisioned around the idea of a slinky, that you have cushioning when you step on the heel, and that transfers that energy to the toe to help you push off.
A couple more examples. You probably didn't know that we make every uniform for every NBA team, every NFL team, and every NHL team. I can tell you that there's a great example of what it means to get product on time. Can you imagine football season opening in training camp and the uniforms are not there in the sizes the players needed? It is a really tough business to be in, supplying that much apparel, but I'll tell you, it's a very rewarding business.
We also produce 12 team uniforms for this World Cup that's kicking off this month. We have professional sports teams in almost every sports category, very prestigious teams like Liverpool or All Blacks, and we produce the Olympic uniforms to numerous countries.
One of the things that’s interesting about this business is we have to have a completely new data model within PLM. It's a three-tiered product hierarchy. We have styles, we have colors, and we have graphics, and a graphic can be associated with many styles. So we had to create kind of a whole new configuration around the PTC products to be able to handle this, and yet it's been able to help us accelerate the speed in which we can actually deal with the product development around teams, and it's been pretty exciting. It’s a recent development. We just went live probably about in the last 12 months in this entire area.
Also, we have to be able to respond quickly to winning teams and athletes. While some of you may be enjoying a cocktail after watching an NFL playoff, we have people that go to work. We have winning team jerseys, hats and standard graphics sitting on the sidelines when a team wins a championship. Right now, I'm sure we have people that are already printing and creating Boston Celtics and LA jerseys, and they will have enough quantity at the game to make sure that the players are seen wearing the hats as the final team wins. By the way, the team that loses, those are destroyed. I think they had a couple leak out a few years ago, so if you could find one, it's probably worth a lot of money.
But we also have to look at – and one of the things that we chase every single week during any particular professional sport is which player is having a fantastic game. And we know that emotionally, if somebody can find a player's jersey with his name on it, within two weeks of whatever that person did, they will probably have a high probability of buying that jersey. So we also create demand around certain players. We'll manufacture their product and have it in retail by Monday morning.
During the Super Bowl or any of the big playoffs, like the NBA, we actually will shift manufacturing to local facilities because we want to make sure we have product at the airport when people are flying home from the match.
And the last thing we have to do is we actually create customized shirts with graphics that really capture the emotion of a game. We'll have people sitting – for example, I'm sure in LA the other night, watching the game, they were looking at what signs people were holding up, looking for clever graphics, looking at what people are emotional about. They'll create and design overnight new T-shirts or graphics. We actually have to route those using PTC to leagues for approval and to lawyers to make sure that we can use slogans and other things, and actually have that product manufactured and in retail within 24 hours. I noticed the other day there were quite a few people sitting at the game wearing the same T-shirt at LA. So I think it probably had something to do with what we were doing.
One last example – TaylorMade. We make a lot of equipment, not just TaylorMade. We make golf clubs, we make balls, but we also make hockey skates, sticks, helmets; we make baseball gloves. You can't imagine the type of equipment business we're in. But here's another case where our company is all about product and it's all about innovation on product.
This product was launched just in January of 2010, and with all of its settings in terms of weights, it's actually 24 drivers in one. It's already probably become right now the #1 driver on the PGA Tour, just right after launch. So people really pay attention when TaylorMade comes out with a product. It uses an awful lot of complex engineering to be able to produce this type of a product.
I was really staggered when I talked to the guys about it. I was saying that it took five years to develop the flight control technology, and they have to test this product with golfers that have a handicap anywhere from 0 to 36. Well, I guess I wouldn't have been asked to participate in the test because my handicap is not less than zero and it’s probably greater than 36, but they're great clubs.
So again, I think you start seeing the diversity of the products that we’re dealing with.
Let's talk a little bit about PTC background. PTC began in Reebok in 2002 when I was CIO of Reebok, and at that time, we had islands of information. Probably, as some of you might recognize some of this in your own company, some technologies made factory participation very difficult. There was no single repository in the company for materials management, no system to support many of the business processes. They were Excel, they were paper, they were fax or Telex or old communication methods, and it was very difficult to have employees move from one part of the company to another without having to spend an awful lot of time retraining them on the way that people worked in each of the brands or each of the locations.
We defined a vision for PLM that said it would be great if product was the center of everything, and that's what it is in our company. Product is the center of everything. We wanted to have a single database for all product information. We wanted to be able to collaborate easily with external partners. We wanted to have a single repository for materials, we wanted to be able to focus on getting costs out of products earlier in the process, not after they’re at retail, and we wanted to support multiple business models and product calendars that are different, by product type or by brand, and flexible workflows, without making it difficult for people to be able to get their job done.
We had some challenges back then in 2002. First of all, it was a very high-volume process. So we're talking about making improvements to a process that has got an enormous amount of volume going through it. At that time, there was no exact fit off-the-shelf industry software. Again, the size problem in our industry is very significant, and companies that don't deal with size really cannot support the kinds of things we're doing.
We have a geographically-dispersed user base, including hundreds of people who are not employees of the company that are actually involved with the development of our products.
The management wanted to put more structure around product development. They wanted to try and get things done more on time, product coming out faster. At the same time, we wanted to try to reduce cycle time. So it's kind of a conflict when somebody wants more structure and they want to reduce cycle time. It was a great challenge for us to figure out how we were going to do that.
And we had the differences between footwear apparel and development for equipment. No common workstations in our IT environment. We had people working on Macs, people working on UNIX workstations, people working on PCs. So it was also one of the things we had to look at in terms of our technology platform.
Employees also wanted to work offline. We have a lot of guys spending time in factories. They're flying on planes. They've got a 12, 14 hour flight; they want to be able to work while they're sitting on the flight. So being able to check out things, being able to work offline is really important.
Everyone was extremely busy, with very little time for training or change management. I think one of the biggest challenges we faced was saying that we could not introduce anything that caused more time for the employees, or they would not use it. They would vote and just simply say, I won't do it.
Now, in our case, because there was not a product in the industry, we had selected PTC as what we thought was the right technical architecture to be able to support us. But we first had to work with them to create a specific version of their product for the footwear and apparel industry and retail industry. And that I guess came out and was finally called FlexPLM.
In our methodology, because we're a multi-branded, multi-country organization – and this is not just with PLM, but with everything we've done within IT – IT in our company has to compete with money for 1,000 other things that the company could possibly do. I knew very early in this industry that if the company had one more dollar to spend, they'd rather spend it on running an ad or signing an athlete or signing another team. So, IT really has to focus on value. We have to demonstrate to the business that we are doing things that have value, and we have to really focus on getting that value by driving adoption rate and also driving user acceptance of the changes that we're making.
So we've been very cautious about how to do that. One of the things we'd come up with, we kind of called it ‘the global one-time’, and when we design any new application, we really focus on trying to understand what is the same for everybody. And that's what was really time box design. We had to put in place a governance process around PLM. We did not want to try to reach consensus. People can get all tied up on trying to define a global template and never get anything done. We wanted to keep it simple, but we also typically will do prep work.
We never go to the business and say, tell me what you need. We go to the business with a prototype and say, what you think of this? And I can tell you, people find it very difficult to give you requirements in abstract, but when you can show them something, they can tell you whether they like it or they don't like it. And it's worked for us. We ended up getting through that process.
We then picked the first place we used something. Where we pick to do something is really important. If you're going to pilot something, you want to be able to do it in a place that they really want it. They really want to be able to demonstrate a significant improvement in their business. So we're very careful about where we pick for the first place we do anything, and we're risk-averse. We'll try and do a pilot. We'll try and do something in parallel. We did not want to shut down the product development process when we were applying PLM for the first time.
Then the next step is then we, after being successful in the first, we then replicate. And in replication, we continue to focus on this global one-time. We look at gaps in the model. We go to a new brand and we say, okay, here's our model. They say, I don't like it, we have a governance process where they say, if it's a great idea, then we'll build it into the model. And then we'll go back and retrofit the first guy who went live. If it's a lousy idea, you're going to change your process, and we have the management backing to be able to bring that standardization across the business.
Every replication we do, the goal is to make global one-time less and less difficult. It should get smaller every time because the model is getting better, and the project implementation should actually be getting faster.
That's one of the things I use when I judge the success of a supplier is do we see this replication experience curve? Can we actually do it faster with less changes? And that's the sign of a great supplier. I think in the case of PTC, we've been extremely pleased that – we don't want to customize their product, we get them to customize their product and build it into the product.
I think the other thing that was important to us was getting the architecture right in a multi-branded, multi-product environment so everybody has a common vault. A vault is a common technology across all brands. However, as we get into footwear, apparel, equipment and hard goods, there are different modules, but those are also standard for all people who use that type of thing.
So if we’ve got TaylorMade making equipment and we have the hockey company making equipment, they'll use the same modules. The governance around that is very important, because again, we're trying to drive value. We're trying to continue to make our cost of ownership very lean in IT.
PTC was selected back by Reebok. It did support all of our four data model types. It did enable collaboration with our suppliers. We have as many suppliers on our application as we do employees. The configuration framework did support most of our requirements. It was easily upgradable, given the core functionality. We really focused on out-of-the-box features, and again, we were driving with PTC. I have to say, their management have been very attentive to what we've been asking for and actually building that into each release of their product.
Workflow engine for lifecycle management, it does accommodate unique product timelines and milestone tracking. Like I said, we can put product through the same process with fewer gates in less than 90 days, or we can go for a full 18-month cycle.
Personalized line sheets and filters based on people's roles, so they only see what they need to be able to see. Interface and report framework, executive dashboards. One of the important things that we wanted to be able to get across to the management is to actually see the product in any report, and that was really an important feature for the management to kind of get an idea of what this PLM was all about.
Timelines can be managed as a collection. So again, there are individual products that have to be developed, but they all have to come to market on the same timeline.
Experience, we implemented successfully in many Reebok divisions, and then in 2006, Reebok was purchased by Adidas, and we went through a process of trying to rationalize all of the technologies the two companies brought. At that time, I was asked to actually be the program manager of the Reebok integration for the two companies, and we went through a process in actually rationalizing every single piece of technology and IT. We had to kind of merge our organizations. We had some additional challenges brought on us by the integration of the merger. We ended up picking about, I think it was 80 new projects at that time. It was a very exciting time in the company, and we initially confirmed that PTC was the right product for all new requirements, but not the right product necessarily to retrofit all of the existing Adidas PLM installations.
What's next? Well, one of the things that's happened as we get more and more experience is we've now said we're going to retrofit Adidas into the same environment, and we're in the process right now. We just got the first approval and sign-off on the blueprinting to migrate the entire apparel organization for Adidas to the PTC platform. That project is underway. It's a very, very big project and involves about 3,000 users, and it's going very well.
The next thing we did was we also identified what we thought was another market requirement. Our product information has to get pushed to about 600 downstream applications, and we started getting the vision that said, if PTC is managing our product information, why can't they manage our product distribution information? We created a new product called the ‘single product master’. It is kind of an MDM product that we think might be a potential future product with PTC, and that product went live two weeks ago, very successfully, doing the first multiple-brand consolidation of product information.
Part of what we saw was the need was we continue to buy small companies or other brands, and we don't want to have to necessarily convert their entire product development process to a full PLM until we have an opportunity to rationalize their processes and harmonize them, but we do need to get their product information into our sales and ordering systems so that we can actually sell those products in any country. So we saw an opportunity to create this master data management solution, and we're very pleased so far with the initial results.
The last big thing we're doing is virtualization of physical samples. We're taking a leadership position in the industry of trying to drive virtual 3-D samples in the hands of the salesforce and in the showrooms around the world. I can tell you, the technical challenges are significant because of the size of the files. A lot of proprietary development around how you can actually create a 3-D model. It's very popular in automotive, but nobody is doing it in footwear and apparel. And then to be able to push that to a showroom or to a salesman's laptop with the issues of color calibration and some other things. But I can tell you, if we can cut down on physical samples, that is a significant benefit to our organization from the number of samples we have to produce.
I'd like to kind of close with some lessons learned, and then we'll have some opportunity at the end for any questions you might have.
One of the things that we found, as I said, IT in our organization is driven by producing value, and it's not just with PLM, but we always try to avoid long-duration, big-bang implementations. I drive my guys crazy sometimes when I would turn around and say, I want to be live on PTC in three months. I don't care where, I don't care how, just get that done. Because I know that by confronting the technology and putting it in, they will be more confident as a team than if they sit there for 12 months doing a blueprint with nothing to show for it that the business can physically see.
So that's one of the key things that we try to do is always drive some benefit that's very visible to the business every 3 to 6 months, because the management will forget what the program is all about if you don't continue to remind them that we are delivering benefit to the business.
We also focus on low-hanging fruit to make sure we're gathering support and momentum. Speed, we like to go fast. We want to show results. We're not patient when we don't show results.
We also try and defer the most complex technology challenges until the team has mastered the technology and gained confidence.
Again, it sounds very simple to do that, but it's not. If you look at what you have to do to accomplish the transformation of product development in a big, high-volume process, it is very, very difficult work, and if you don't get the adoption rate up, you will not be successful. So you have to be careful around making sure you can continue to build momentum and confidence.
We also were brutal about retiring legacy modules along the way because we want to increase the compliance on new processes and we want to simplify maintenance. The minute you go live with your new environment, it's now a legacy environment, and you also have to have a team to support what is live if you're going to continue to make progress on moving ahead on additional people you want to capture.
We wanted to avoid multiple data entry. In many cases, we would have to do extra effort on the part of IT to simplify the data migration or any kind of a communication between systems, but it pays off, again, in that user acceptance and adoption rate.
Any document specific to creation had to go into the vault. We wanted to get the single version if the truth. The vault was one of earliest wins we could have because many of the people were already familiar with a vault. It happened to be a G: drive or a public directory, and all we were doing was switching into a different technology. So they got it very easily. They started becoming familiar with the technology, and it was an easy win in the early phases of the projects.
We also wanted to obtain executive leadership at the highest possible level, and in our case, that’s the CEO of the company. We're talking about changing the product process in a company that lives on product, and if he's not aware of what's going on, believe me, you're going to be in trouble if you're not getting the leadership in support of your programs at the highest possible level.
The next thing we wanted to do is balance top-down objectives for change with ample benefits to the people who work in the process. So we would gather requirements two ways. We were listening to the management of what they wanted to change, how did they want to improve the process? We were also listening to the people who do the work and trying to understand what would be the greatest thing we can do for you? Just change the screen so I only enter something once. If you can balance the top-down and the bottom-up view of your programs, you're going to get better results.
We try and keep things simple, utilize out-of-the-box wherever possible, and if we do have customizations that are required because of the industry, let's go back to the supplier and get them to build it into the product. We may need it urgently, and we'll take a chance and risk and building it with PTC, but our expectation is they will put it into a future release.
We let users experience the new platform for a certain period of time before making enhancements, and that's product governance. When somebody goes live, you always get this pile of requests that say, can we change this? Can we change that? And we say, you know what? We're not going to change anything for 90 days. You have to use the platform. And half the time, in 90 days, the first things they ask for, they don't want anymore, and yet, that's just part of our governance. We simply say, you have to use the technology before you can ask to enhance it.
That's different than if it's not working. If it's not according to what you are promised, obviously we put a high priority on fixing things that may not be working properly.
Again, I mentioned that we prototype things to show a business a solution to ask what's missing as opposed to going with a blank piece of paper. We want to steer the outcome to something that is a common platform, and we've been very successful. Again, it takes more work. You have to develop these prototypes; you have to understand the business. But the business, I can tell you, really appreciates it. When you go in and you show them something that's working and they can tell you, I don't like that. I like this, that's what I want to do.
Last couple of ideas. One of the things we learned early on was funding full-time business team members in the project cost. When we estimate our projects – and it's not just in PLM, it's on anything we do – we will hire into the project team the best people we can find in the business. The fact that we funded those people meant that they can be backfilled in the business. If you don't do that, you don't always get the best people on your project. You end up getting people who are available, but not necessarily the people who will make a significant change and improvement of a process.
You've got to pay close attention to the system's technical architecture, particularly with the size of files. I think probably you guys all know this yourselves, but moving large files around the network requires some real tuning and performance, paying attention to those kinds of things. And where we have to have so much collaboration going on outside the firewall, we also have specific requirements around security.
Because of the seasonality of our calendars, we have to adjust our project schedules. We would never go live in the middle of a product launch, you know, back to school. We have to kind of work our project teams around the calendars of the business.
We put an awful lot of attention on cleaning up master data. Every time we do a PLM implementation, it's an opportunity to go back and install best practices around master data; get people off of speaking numbers on the standardized company numbers.
Then finally, adhering to a strong project methodology and a focus on attention on issues and off-plan results. That's again, part of our project governance that we really are pretty tough on how we run these projects, because it's really important for us to be able to make commitments. That's part of the branding. IT is a brand, and we have to demonstrate that we complete things as we promised and on time. So we have a very strong project organization.
I think that's the last prepared remarks about the story of what's happened. I'll be happy to answer any additional questions. We've got about eight minutes left.
Questioner: How did you get started with IT?
Peter Burrows: Believe it or not, I was drafted in 1968 in the largest draft call-up of the Vietnam War. At that time, I had a degree in computer – at that time, I think it was called Data Processing Management, and I didn't realize the military had a thing called a ‘civilian-achieved skill’. So they sent me to Texas after basic training to be part of a unit that was testing the first minicomputers. We actually put them in trailer trucks, we were floating them out of airplanes or dropping with parachutes. We were trying to test the first possible distributed data processing.
Of course, I didn't realize I was also part of a plan to send all those little minicomputers to Vietnam. So I ended up in Vietnam in 1969 as a programmer, of all places. And that was – it was really one of those life-changing moments, because I probably worked, I would say, 14 hours a day, seven days a week. It was one of those situations where it developed skills that you keep to this day. When somebody comes to me and says, oh, I don't have enough resources, I go, well, do you know what it's like when somebody got killed last night? Let me tell you. It's like, you get an idea of what's the mission, how do I get it done, and how do I get it done quickly?
When I came back, I actually worked for six years in public welfare, public assistance, doing large software development. Then worked for a company called the FoxPro Company. They did process control. I was CIO there, transformed that organization. It was an old-fashioned manufacturer that we transformed into a digital company, got to go through downsizing from 12,000 employees to 4,000.
I got recruited by Reebok to do a reengineering there, and then I ended up going through the merger with Adidas and managed to survive somehow. I can't ever seem to retire. Every time I try to leave, I'm – but I actually did hire my replacement last July. He followed me around for six months. He took over as CIO at the end of the year, and I'm now looking forward to hopefully retiring sometime maybe in a year or so. We'll see what they say.
But I think it's – IT is a wonderful profession, and I’ve really enjoyed it.
Any other questions?
Questioner: Yes. How many CAD users do you have, and how are they distributed globally? I'm also curious about how your infrastructure is created or laid out for PLM?
Peter Burrows: The question was how many CAD users do we have globally, and how have we structured the PLM environment?
We try and run everything on a single instance. It's not always possible. In some cases, some brands perhaps have their own.
In terms of CAD users, it depends on the brand. We obviously share a lot of work with factories, and so we will tell factories that they must install certain types of technology. We had – in the past 10 years, we've watched, like everybody, the evolution from 2-D to 3-D CAD. So there were a lot of people who were, I'm never going to change. I'm 2-D. I'm not going to go to 3-D, and yet, when you hire people right out of school, they only want to work in 3-D.
We have a lot of designs start on a Mac and then have to be transferred into a CAD environment. We also have a lot of specialized equipment that does patent engineering. So you have to – obviously in apparel, you have to develop patents that are actually used for cutting fabrics.
So there's an awful lot of this specialized equipment in this industry. In the footwear side, we have to make molds. We have complex technology around molds. Everything has to be manufactured on a [last 40:09], which is actually a physical representation of a foot. So there's quite a bit of engineering that goes into the development of this stuff. It's scattered all over the company. It's in every brand, and it's in all of our partnership factories, and we have to coordinate all of that through one kind of infrastructure, which makes it kind of exciting.
And it's a very small team. If you looked at how big our PLM team inside the company is, I bet it's not more than 12 people supporting thousands of users, both inside and outside the company.
Questioner: Do you use Pro/Engineer for TaylorMade in some of your mechanical things, and then what kind of CAD system do you use for Apparel CAD? Is it like Gerber CAD, or…?
Peter Burrows: Yeah, they've got Gerber. They do use Pro/Engineer at TaylorMade.
Questioner: Okay. Do you manage all those with PTC Windchill?
Peter Burrows: Yeah. Yeah, it's all managed through PTC Windchill. The latest company that we’re looking at moving in that direction is The Hockey Company, and we just recently moved the IT manager of The Hockey Company under the manager of TaylorMade, and we're seeing tremendous benefit of the synergy now between those two brands.
That's one of the techniques that we have to do. We have to mirror the organization in the sense that we can't just have an ideal organization from an IT point of view, but we can look for combinations of IT leadership that really helps us get synergy across brands. And just by having The Hockey Company now follow kind of TaylorMade, they're much bigger, they're much more sophisticated. I mean, we're just making tremendous progress now in Hockey following the same technology that was used for TaylorMade. TaylorMade is all PTC, both on Windchill and on Pro/Engineer.
Questioner: You said your company provides all the sports uniforms for NBA?
Peter Burrows: Yeah.
Questioner: Have you considered using your influence to stop providing them to the Lakers?
Peter Burrows: I figure they're just going to lose anyway, whether they get the uniforms or not. But it would be kind of funny to see Kobe Bryant playing in his boxer shorts. It would be pretty funny.
But I can tell you, the happiest people that we deal with are the team equipment managers. Those are our friends. You're dealing with the team owners, obviously, and they can be difficult guys. They're all multi-billionaires and they all want a sweater made for their wife or something special. But the guys that we really thrive on satisfying are the team equipment managers who really appreciate things delivered to them when they need it, and that they’re right.
But it's a fun business. It's very rewarding to actually be able to see – you know, watch both teams playing tonight and they're both wearing a product that we created.
Well, thank you very much. I hope you enjoyed it.
Hear CIO Emeritus and Head of Enterprise Architecture Global IT at adidas Group, Peter Burrows, describe the company’s implementation of a Retail PLM solution that has allowed for strategic collaboration across the multi-brand, multi-product type, customer-focused organization.
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