1. Derek Mitchell
Ecco Supply Chain & Operations Analysis
Policy & Strategy
Atlanta Module-Summer 2012

2. ECCO Vertical Integration
Cow to Shoe
• Ecco value chain is actually rawhide to shoe
• Purchases raw hides and transforms into leather used in shoe production
• Owns tanneries in Netherlands, Indonesia and Thailand
• Processes 3,500 raw hides a day equalling 1 million cows per year

3. ECCO Value Chain
What is the future of ECCO's leather manufacturing?
Full Bench Laboratory
Prototype Ramp-up Production
Scale marking
Product
Leather Shoe
Development Design Distributing
Manufacturing Production
(R&D)
Post
Raw Tannery Tannery Finishing
Operations Operations Operations
hides
Discontinue-"blow it up" Sell it

4. ECCO Value Chain
What is the future of ECCO's leather manufacturing?
Full Bench Laboratory
Prototype Ramp-up Production
Scale marking
Product
Raw Material Shoe
Development Design Distributing
Procurement Production
(R&D)
But let's stop to reconsider.........

5. ECCO Value Chain
What is the future of ECCO's leather manufacturing?
Full Bench Laboratory
Prototype Ramp-up Production
Scale marking
Product
Raw Material Shoe
Development Design Distributing
Procurement Production
(R&D)
Leather manufacturing Value Add
Global top five leather producer
Leather centre developing leading technology
Supplies automotive and furniture industry

6. Quality Materials
Leather
Resources Strategy
Manufacturing
Quality Products

7. VRIO Analysis
Leather
Manufacturing

8. VRIO Analysis
Valuable
R are Leather
Manufacturing
Imitable
Organization

9. VRIO Analysis
Reframe Leather
Manufacturing
Resources

10. Bolster Brand Recognition
M
P
Q QA
R
U UT
O
A Leather
AE
D
L Manufacturing L R
U
I I I
C
T TA
T
Y Y L
S
S
Increase Perceived Consumer Value

11. ECCO Value Chain
What is the future of ECCO's leather manufacturing?
Full Bench Laboratory
Prototype Ramp-up Production
Scale marking
Product
Raw Material Shoe
Development Design Distributing
Procurement Production
(R&D)
Leather manufacturing Value Add
Global top five leather producer
Leather centre developing leading technology
Supplies automotive and furniture industry

12. ECCO Value Chain
What is the future of ECCO's leather manufacturing?
Full Bench Laboratory
Prototype Ramp-up Production
Scale marking
Product
Raw Material Shoe
Development Design Distributing
Leather
Procurement
(R&D)
Production
Leather manufacturing Value Add
Leather Manufacturing Restructuring Plan
Remove "blow up" leather manufacturing from value chain
Global top five leather producer
Restructure operations as an ECCO subsidiary
Leather centre developing leading technology
Supply ECCO and competitors in shoe industry
Supplies automotive and furniture industry

13. Industry/Competitor Value Chain
Sporting
Rubber,
Shoe Goods,
Fabric and
Manufacturing Marketing Department
Other Raw and assembly and Shoe
Materials Stores
Customers
Online,
Product
Catalog and
Development
Other Retail
Customers
Company
Branded
In-house Specialty
Outsourced Store
Customer Feedback

14. Industry/Competitor Value Chain
Sporting
Shoe Goods,
Manufacturing Marketing Department
Leather and assembly and Shoe
Stores
Customers
Rubber,
Online,
Product Fabric and
Catalog and
Development Other Raw
Other Retail
Materials
Customers
Company
Branded
In-house Specialty
Outsourced Store
Customer Feedback

15. Leather
Introducing...............
Co- Branding

16. Co- Branding

17. Co- Branding

18. Co- Branding

19. Supply Chain &
Operations Breakdown

20. ECCO Divisions
• Product Development (R&D)
• Design
• Leather Manufacturing
• Shoe Manufacturing
• Distribution

21. Product Development
Locations
• Bredero
• Tonder
• Indonesia
• Portugal
Value Add
• Development of products, prototypes, laboratory
production technology, processes, materials
• Laser technology development in Portugal facility

22. Design
Locations
• Bredero
• Indonesia
Value Add
• Design in manufacturing facility to foster practical, high-
quality product design

23. Leather Manufacturing
Locations
• Netherlands
• Indonesia
• Thailand
Raw Hide Suppliers
• Germany
• Finland
• France

24. Leather Manufacturing
Value Add
• Amongst five largest leather producers worldwide
• Leather research centre with 15 specialist developing new technology
and tanning techniques
• Developing less polluting tanning methods
• Processed 3,500 raw hides per day equaling 1 million cows per year
• Sells excess to automotive and furniture industries
Potential Subsidiary Value (see IBIS report)
• Buying industries: footwear industry, automotive, furniture, Luggage
manufacturing, Gym & exercise equipment, Athletic & sporting goods
• U.S. Leather industry value: $1.2 billion
• Key Success Factors: Economies of scale, Effective quality control,
guaranteed key input supply (raw hides)
Disadvantage
• Leather quality does not add to perceived customer value

25. Shoe Manufacturing
Locations
• Slovakia
• China
• Thailand
• Indonesia
• Portugal
Value Add
• Established production systems, streamlining processes and specific volume
materials
• Perform small tasks making quality and production methods hard to imitate
Disadvantage
• Procurement of raw materials to Indonesia facility takes 13 weeks from
order to delivery

26. Distribution
Locations
• United States
• Tonder
• Denmark
Transportation Methods
• Harbor of Aarhus
• Denmark vans and freight planes for emergency
shipments

27. Distribution
Value Add
• Tonder warehouse capacity: 2 millions pairs
• Bar code system can facility shipment of
60,000 pairs per day to 25 countries
Disadvantage
• Distribution system may not be able to
handle replenishment orders with short
lead times

28. Finland
Denmark
France
Slovakia
United
States
Portugal China Japan
Germany
Thailand
Indonesia
Main Markets
(U.S., Germany, Japan)
ECCO Supply Chain Rawhides
Distribution
Leather Manufacturing
Shoe Manufacturing

29. Thank You
Contact info.
Derek Mitchell
dlmitchell3001@gmail.com
www.linkedin.com/in/dereklmitchell