The World Cup’s global supply chain

July 12, 2018 Matt Vermeulen

The World Cup. Every four years the entire world turns its lonely gaze on the beautiful game of futbol (soccer!). The tournament goes on for an entire month. Nations watch transfixed, pinning their hopes on their chosen 11 heroes running on the pitch. The prize? The ugliest trophy in modern sport, and the adoration of millions.

As you might imagine, it’s quite the undertaking for FIFA (the governing body of the tournament) and the host nation to organize a successful event for the millions of fans traveling to watch the games. The World Cup is winding down, with 62 out of 64 matches played in 12 stadiums across Russia.

From the footballs to the beer, the World Cup supply chain is global in scale and complex in execution.

The footballs

All good footballs go to the World Cup. And they get there from Pakistan, courtesy of a local sports company, Forward Sports, located near Sialkot city. Forward Sports is an industry veteran in the world of sports equipment, making them a worthy supplier for all the footballs for the Russia World Cup. And while they’re not telling how many they’ve made for this tournament, they produced over 3,240 footballs for the 2014 World Cup in Brazil. That’s almost 50 footballs per game.

Like every transaction in a supply chain, visibility into working conditions is crucial, and sporting goods have been under scrutiny before. Accusations of child labor in hand-stitched soccer balls have been around since the late 90s in Pakistan. In fact, Nike canceled hand stitched football orders back in 2006 after being accused of child labor violations.

Because of the increased scrutiny into Sialkot’s sporting goods market by international labor rights groups, there hasn’t been a major complaint since 2006.

Upgrading the system

Hosting a World Cup often requires infrastructure improvements and new state-of-the-art facilities. For host countries, this can cause growing pains and unforeseen costs. This was the case in Brazil in 2014 and holds true in Russia as well. Since bidding on the opportunity to host the World Cup back in 2007, Russia has spent over $14 Billion USD to get ready for the global event. The money’s gone into building or repairing infrastructure: they built a new airport, laid new high-speed rail lines, renovated stadiums, erected a score of new hotels, and built new stadiums.

And while much of the financing is accounted for, including new stadiums, 12 new roads, 11 new airport terminals, and three metro stations, much of the financing has been murky. Krestovsky stadium, a talisman for the scheduling woes of this year’s world cup, was finished eight years behind schedule and 540% over budget. Adding to rampant cost overages and long delays, worker rights violations have shown up in the construction for these myriad projects. The Guardian reported that most of the construction projects relied on immigrant workers, many from North Korea, toiling in “slave-like conditions” to complete the projects ahead of the World Cup. Accusations of corruption and poor working conditions tarnish the luster of the historic tournament.

Thirsty fans drain the supply chain

Summertime and soccer action is hot in Russia. And all the soccer fans want is beer. You can prepare and plan for a host of problems in the supply chain, but sometimes, a hiccup will come out of nowhere. And in this case, many hiccups are stemming from an unexpectedly large amount of beer consumption. Turns out the fans’ thirst for beer is nigh unquenchable in Russia, and the hosts are caught off guard.

For Russia, beer doesn’t make the alcohol pantheon; in fact, only since 2011 have they even classified it as an alcoholic beverage. And maybe because of that dim view of suds, Russia didn’t see the demand coming. According to one waiter, “We just didn’t think they would only want beer.” And the beer sponsors of the World Cup already report sales several times higher than expected.

Lessons learned

The World Cup is one of the best sporting spectacles in the world, and hosting it is a challenge. Just like running a top-of-the-line business, it takes planning, insight, and agility. Even in the best of times, the supply chain can be murky, and staying on top of your suppliers to make sure they’re the sort of people you want to do business with is crucial. Investing in systems to meet goals successfully is critical. And staying agile and open to change can keep you on pace when the unexpected happens.

Germany might have crashed out of the World Cup in the Group Stage, but DHL is still a global champion logistics company. See how fast DHL was able to onboard their suppliers.

 

About the Author

Matt Vermeulen

Matt Vermeulen writes about B2B commerce for Tradeshift. Whether he's writing about Accounts Payable best practices or debunking AI myths, Matt enjoys making complex topics easy to understand and fun to read.

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