Tag: Adidas

OM in the News: Why Is It So Difficult for Robots to Make Your Nike Sneakers?

It took Nike 8 months to figure out how to automate a way to put the Nike swish on a shoe, only to move onto a new shoe line for which the method no longer worked.

A yearslong effort by Nike to shift part of its manufacturing from China, Indonesia and Vietnam to North America illustrates how tough it is for U.S. brands to wean themselves off the flexible, low-cost contract manufacturers.

In 2015, Nike poured millions into an ambitious effort to partly automate what has always been a highly labor-intensive industry. At the time, rising labor costs in China and advances in manufacturing techniques opened the possibility of finding a new way to make shoes that would rely on fewer workers. The goal: Make tens of millions of sneakers at a new high-tech manufacturing site in Mexico, by 2023.

The plant would still include thousands of workers, but far fewer than are needed in Asia to make the same number of sneakers. Nike’s competitors also sensed an opportunity to rethink a manufacturing model built around hand stitched fabrics and glued soles. The same year, Under Armour announced “Project Glory” using automation to make shoes in Baltimore. And Adidas launched “speedfactories” in Atlanta and Germany, with high-tech machinery to quickly spit out shoes, which we blogged about then.

Nike aimed for large-scale automated production in under a decade, which would save on labor costs and allow it to deliver new models of shoes to Americans faster. It established new production lines that used machines commonly seen in electronics manufacturing. The machines were supposed to build the upper part of a shoe, knit fabric, add logos and glue the sole.

The effort quickly ran into trouble, reports The Wall Street Journal (April 22, 2025). The robots struggled to handle the soft, squishy and stretchy parts that are integral to shoemaking. Another problem was the huge variety of shoes Nike produces. As a result, factory production never became as automated as envisioned. As shoe production increased, the factory personnel swelled to 5,000, twice as many as originally planned and costing more than a similar workforce in Vietnam.

All three firms surrendered in 2019 and stuck with their original Asian locations.

Classroom discussion questions:

  1. Will the threat of new tariffs mean they will ultimately have to bring shoe production back to the U.S.?
  2. Why the failure for all three firms?

OM in the News: America Is Back in the Factory Business

Manufacturing has always been an integral part of American life. Paul Revere opened a foundry that produced bells and cannons following his famous midnight ride. Ford’s assembly line made cars affordable to the masses. And U.S. industrial might helped win World War II, when nearly half of private-sector employees worked in factories. That portion plunged after the war, thanks to automation and U.S. companies seeking lower costs overseas.

Here is the good news. The Wall Street Journal (April 8-9, 2023) writes: “Record spending on manufacturing construction heralds a made-in-the-U.S. rebound, stoked by green-energy incentives and concerns about foreign supply chains; this is here to stay.” New factories are rising in urban cores and rural fields, desert flats and surf towns. Much of the growth is coming in the high-tech fields of electric-vehicle batteries and semiconductors, national priorities backed by billions of dollars in government incentives. Other companies that once relied exclusively on lower-cost countries to manufacture eyeglasses and bicycles and bodybuilding supplements have found reasons to come home.

Retailers don’t want to carry excess inventory in their stores, and the U.S. factory allows the company to quickly replenish stock. Time is also of the essence for companies like FutureStitch, which sells socks commemorating events like the NBA Finals or the Kentucky Derby. It has factories in China and Turkey, but just opened a new one in California–the company’s first in the U.S. “There is more and more equity around Made in the USA,” said FutureStitch’s CEO.

Nearly 800,000 jobs were added in the manufacturing sector over the past 2 years. But the industry is actually hurting for workers—about 800,000 more are needed, which has lead to concerns that labor shortages and other bottlenecks could short-circuit the boom.

An despite the surge in factory building, many industries are unlikely to create entirely homegrown supply chains. An automated shoe factory Adidas built in Atlanta so it could get its products to market faster shut down in 2019, two years after its opening. (See our 2017 blog announcing its opening.) The firm moved production to Vietnam and China to achieve what it called “better utilization of existing production capacity and more flexibility in product design.”

Classroom discussion questions:

  1. What factors are driving the manufacturing in U.S. resurgence?
  2. What factors are working against it?

OM in the News: Clothes and EU Recycling Regulations

The EU imports 3/4 of its textiles. Above, garment workers cut fabric to make shirts at a textile factory in India

Clothing companies will start selling more garments made from a single material this coming decade, a major shift in response to a European Union plan to require apparel to be longer lasting and recyclable.

Clothes often contain a mix of fibers, including organics, such as cotton grown on farms, and synthetics, such as polyester refined usually from petroleum. Garments with multiple materials—such as a T-shirt made from 99% cotton and 1% spandex—are difficult to recycle because separating the fibers is tricky.

Currently, less than 1% of the world’s textile waste is recycled into new clothes, with the bulk ending up in trash heaps, writes The Wall Street Journal (Sept. 7, 2022). The EU wants to change this. But the relatively short time frame promises to challenge the big players in fast-fashion, which may have to retool their design processes and rethink their sourcing, a topic we note in Supplement 5.

The EU recently published a plan that aims to put “fast fashion out of fashion” by 2030, referring to the trend of people buying clothes and throwing them out in less than a year. Clothing should be “long-lived and recyclable, to a great extent made of recycled fibers,” the EU said. Sustainability experts say that single-fiber, or monofiber, clothes present one of the best solutions.

The plan will affect not only Europe’s homegrown brands, but also American Nike and Levi Strauss and Japan’s Uniqlo or China’s Shein. EU nations have already agreed to collect discarded textiles separately from other waste by 2025.

German sportswear maker Adidas, for example, launched a line of single-fiber clothes last year including shoes, coats, T-shirts and pants under its “Made to be Remade” label. “These products are created with just one material and once they reach the end of their useful life, they can be cleaned, shredded and recycled for use in new products,” said the firm. Swedish fashion retailer H&M is stepping up repair services and offering rental and secondhand clothing as part of its push to cut waste and its associated greenhouse-gas emissions.

Classroom discussion questions:

  1. Are you concerned/aware of this issue?
  2. How does the proposed change impact the 10 operations decisions discussed in Table 1.2 of your Heizer/Render/Munson text?

OM in the News: Adidas Sneaker Factory Does Reshoring in Reverse

Adidas plans to close its only sneaker factories in the U.S. and Germany, shifting cutting-edge automated footwear production to Asia and reversing an effort to make products closer to shoppers in the West. The German company, the world’s second-largest athletic gear maker by revenue after Nike  announced it would move technology developed at its so-called “Speedfactories” to two suppliers in Vietnam and China. The closure of the facilities in Germany and Atlanta—both opened within the past 3 years—raises questions about the feasibility of bringing manufacturing jobs back to developed markets.

Adidas said the move would result in the “better utilization of existing production capacity and more flexibility in product design,” writes Supply Chain Dive (Nov. 12, 2019). The company’s facilities in Germany and Atlanta were home to robotic production and 3D printing enabled by motion capture technology. Adidas is not totally  discounting the 3D printing technology it has lauded as a superior way to produce shoes, but it is demonstrating that location for this tech still matters to the bottom line.

With the production move, Adidas suggests the business case is still better in Asia, even with advanced technology and despite the distance from target consumers. Supply chain disruptions have weighed heavily on Adidas this year, which may be contributing to the company’s decreased inclination to pay for facilities and labor in expensive markets like Germany and the U.S. Recovery from the shortfalls is bound to be expensive. The company has already increased use of air freight to catch up, warning the cost for the next two quarters would be “substantial.”

Classroom discussion questions:

  1. What was the uniqueness of the “Speedfactories”? (See our post just 2 years ago)
  2.  Why move this manufacturing to Asia?

OM in the News: Adidas Automates to Make Shoes Faster

In a production hall as clean as a hospital, pea-size beads of white plastic pour into what looks like a minivan-size Adidas shoe box, complete with 3 white stripes down the side. That’s fitting, because in just a few seconds the machine heats and molds the stuff into soles of Adidas running shoes, with only one worker needed to wedge in pieces of plastic called stability bars. This is Adidas AG’s “Speedfactory,” where the shoemaker aims to prove it can profitably produce footwear in high-cost, developed economies, reports Businessweek (Oct. 9, 2017). By next fall the facility, as large as half a soccer field, will employ 160 people to make 1,500 pairs of shoes a day, or 500,000 annually.

The plant, halfway between Munich and Frankfurt, and a twin opening this fall near Atlanta, will be key to Adidas’s effort to catch industry leader Nike. It replaces manual stitching and gluing with molding and bonding done by machines, churning out running shoes in a day, vs. 2-3 months in China and Vietnam, where components are shuttled among suppliers that produce individual parts. “In the history of sneaker making, this is probably the biggest revolution since manufacturing moved to Asia,” says an industry exec.

The factories take a page from fast-fashion pioneers Zara and H&M, part of an effort by Adidas to more quickly get shoes, soccer jerseys, and other goods from designers’ sketchbooks to store shelves. Adidas says coupling speed with customization will allow it to sell more gear at full price and keep customers from defecting to rivals. Adidas’s rivals are pursuing similar strategies, with Nike investing in a company making electrical adhesion machines that can assemble the upper part of a shoe 20 times faster than a human worker can. New Balance and Under Armour have started 3D-printing parts of the soles of some shoes.

Classroom discussion questions:

  1. Will these Speedfactories replace traditional shoe production in Asia?
  2. Why is this a revolution in the industry?

 

OM in the News: Adidas Shifts Production — But Robots Get the Jobs

Adidas unveiled a prototype of a "Speedfactory" in Ansbach, Germany this week
Adidas unveiled a prototype of a “Speedfactory” in Ansbach, Germany this week

Adidas is relocating some of its shoe production from Asia to the company’s homeland — but Germans shouldn’t expect a jobs boom, reports NBC Business News (May 25, 2016). What is currently done by hand will soon be carried out by robots as part of what the firm calls an “automated revolution.”

The sportswear giant just unveiled its prototype “Speedfactory” — a 3,000­ square ­foot, high ­tech facility in the southern German town of Ansbach. The first 500 robot-­made high ­performance running shoes are scheduled to be rolled out later this year. “We believe that this is pioneer work for a fully automated production process,” says an Adidas spokesman, adding that the facility will mean the firm “will be able to get the desired product to the customer much faster.”

Adidas moved its production to Asia in the early 1990s, mainly due to rising wage costs in Europe. It kept just one production facility open in Germany, where 700,000 soccer shoes are produced annually. Overall, Adidas manufactures more than 300 million sports shoes per year. The firm initially plans to produce around 1 million shoes in Germany.

A 50,000-square-foot “Speedfactory” is due to be finished in Ansbach by the end of 2016. A second is expected to open in the U.S. next year while a third is also in the pipeline.

Classroom discussion questions:

  1. How does this relate to the return of manufacturing jobs in the U.S.?
  2. What are the advantages of having such a manufacturing facility in Germany, as opposed to outsourcing to Asia?

OM in the News: German Robots to Make Adidas Running Shoes in 2016

adidas2A German factory operated largely by robots is making its debut this year as the sportswear company seeks to cut labor costs and speed up delivery to fashion conscious consumers. Adidas had shifted most of its production from Europe to Asia and now relies on more than 1 million workers in contract factories, particularly in China and Vietnam. But Adidas now wants to bring production back closer to its major markets to meet demands for faster delivery of new styles and to counter rising wages in Asia and higher shipping costs, reports Reuters.com (Dec.19, 2015).

The new “Speedfactory,” near its Bavarian headquarters, will produce a running shoe that combines a machine knitted upper and springy “Boost” sole made from a bubble filled polyurethane foam. “An automated, decentralized and flexible manufacturing process… opens doors for us to be much closer to the market and to where our consumer is,” said the CEO.

Adidas currently makes about 600 million pairs of shoes and items of clothing and accessories a year, with a target of 900 million by 2020. The new factory will still use humans for parts of the assembly process. Around 10 people will be on the ground for testing purposes during the pilot phase, but Adidas is working towards full automation.

Almost 75% of Adidas sales currently come from products newer than 1-year-old and that figure is rising. “Our consumers become more challenging and demanding,” the CEO said. “Customization to markets and individuals will become the norm.” The ultimate objective would be to get replicas of red shoes worn by rapper-turned-designer Kanye West at a concert into the store the following morning. Adidas is also seeking to find ways to remove machine tools from the manufacturing process as they can take weeks to prepare. It has already used 3-D printing to create futuristic looking soles made from webs of crisscrossed fibers.

Classroom discussion questions:

  1. Why the move to Europe?
  2. Discuss the implications of mass customization at Adidas.