Adidas rescues e-commerce project after Pandesic shutdown

Faced with the sudden collapse of its e-commerce application service provider (ASP) when Pandesic LLC folded last summer, Adidas America Inc. was ready to pull the plug on a budding initiative to sell its sporting goods via the Web. But that didn't happen.

Instead, the subsidiary of Herzogenaurach, Germany-based Adidas AG was able to find a new ASP that quickly customized a set of enterprise resource planning (ERP) applications for managing warehouse and retail operations. Dieter Schoenegger, chief technology officer at Adidas America in Beaverton, Ore., said the company launched a pair of e-commerce Web sites in late January, one month ahead of schedule and at a cost of less than $2 million.

Replacing the Pandesic applications that Adidas America had planned to use was still a "big job," Schoenegger said. The company has to keep track of about 25,000 separate items across more than 25 product lines -- a task so daunting from a technology perspective that Schoenegger initially was ready to discontinue plans for the two e-commerce sites.

The project was thrown into doubt when Intel Corp. and SAP America Inc., which jointly owned Pandesic, decided last August to pull the plug on the Sunnyvale, Calif.-based ASP (see story). Schoenegger said executives at Adidas America were shocked by the Pandesic shutdown, which came just six months before the Web sites were due to go live.

But Adidas America regrouped and decided to sign on with Cutsey Business Systems Ltd., a software vendor and ASP in North Bay, Ontario. Cutsey's FDM4 wholesale distribution applications, based on an embedded database from Progress Software Corp. in Bedford, Mass., were able to manage the complex style, color, and size processing requirements of apparel and footwear makers such as Adidas, Schoenegger said.

The applications did require extensive customization work by Cutsey before Adidas America could implement them, according to Schoenegger. But the entire project took just three-and-a-half months, allowing the company to move forward with its plans for both a consumer storefront and a business-to-business site aimed at soccer teams.

The deal with Cutsey "made the difference between a kamikaze landing and a soft landing," Schoenegger said. "This was a migration for survival. Without it, we would have had to shut down the operation and start from scratch."

The applications were also integrated with Adidas America's distribution center system, which is run by United Parcel Service Inc.'s UPS Logistics Group in Atlanta. That gives users of the two Web sites almost real-time visibility of the inventory available at the distribution facility, Schoenegger said.

The Adidas project shows that ASPs can provide big companies with enterprise applications in a rapid and safe manner, said Amy Levy, an analyst at Summit Strategies Inc. in Boston. The implementation is particularly interesting when compared with the problems that Adidas rival Nike Inc. has had installing supply-chain management applications internally, she added.

Nike, which is also headquartered in Beaverton, disclosed last month that difficulties with the installation of software from Dallas-based i2 Technologies Inc. are playing a big role in an expected profit shortfall (see story). ERP and supply-chain projects involving retail and apparel/footwear companies can be especially complex, Levy said, adding that those industries have "a burning need" for packaged software that goes beyond homegrown applications.

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