Tag: shoe production

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: France “Reshores” Sneaker Production

After 15 years of manufacturing entirely in Asia, French sportswear firm Salomon SAS, decided it was time to start making its sports shoes at home. The challenge, in a country where shoemaking died out years ago, was how to build the necessary supply chain, writes The Wall Street Journal (May 7-8, 2022).

The Salomon Meta Cross produced in France

The first phase was to build an automated sneaker factory in France. It also redesigned its shoes, drastically shrinking its supply chain by slashing the number of components in each sneaker by 2/3. (Salomon’s redesigned shoe has 26 parts, down from over 70 in its other models). That still left the matter of sourcing materials in a region largely devoid of suppliers. Until now it has sourced soles and other parts primarily from China and Vietnam, two of the main centers of shoemaking.

For decades, Western companies have made everything from clothes to toys in Asia or Latin America, taking advantage of cheaper labor and highly developed supply chains. But the business case for that practice has eroded in recent years amid repeated shocks to the global economy, prompting many companies into a rethink. Then from 2020 onward the pandemic brought waves of factory closures, as well as port blockages and truck shortages, disrupting supply chains and pushing up freight costs. Russia’s invasion of Ukraine rattled global systems anew.

These crises have made “reshoring”— the return of production to a company’s home country—increasingly attractive. Some 2/3 of U.S. and European manufacturers say they will bring some of their Asian production home by 2025, with 1/5 saying they will bring back most or all of it.

Footwear production is particularly tricky to repatriate, because Asian shoemakers use cheap, plentiful, low-skilled labor. That model can’t be recreated in the West, prompting companies to turn to automation. The France-made shoes will be as profitable as those made in Asia, thanks to savings from lower transportation costs and the elimination of customs duties.

The new Salomon plant requires only 15 humans a shift; a typical shoe factory in Asia would require 5 times as many to match its output. Some operate sewing machines—this intricate work is still best done by hand—while others monitor the automated production lines. If the French project is successful, Salomon wants to build a similar automated plant in the U.S. to meet demand there.

Classroom discussion questions:
1. Why is this reshoring effort difficult?

2. Of the 10 OM decisions in your Heizer/Render/Munson text, which directly relate to reshoring shoe manufacturing?

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: Can Sneaker Makers Come Home?

robot“A new Trump administration has industry players who import almost all their sneakers from low-cost locales in Asia talking about their efforts to switch more production to the U.S.,” writes Businessweek (Feb. 6-12, 2017). They already know that manufacturing closer to home would lower the time it takes to get products to market. Now, sneaker makers’ efforts to manufacture here could also help deflect attention from the fact that they overwhelmingly are in the business of designing and marketing made-in-Asia footwear for American consumers.

Nike’s products are made by 1.1 million workers in 645 factories located across 42 countries. About 400,000 of the workers are in Vietnam, with 202,000 in China. Only 7,000 are in the U.S. Footwear companies are hoping for incentives for manufacturing onshore to speed up their made-in-America ambitions. But as they look to bring production back to the U.S., shoemakers are embracing a new kind of worker: robots. Sneakers, with lots of pieces stitched or glued together, are labor-intensive. That’s one reason so many plants are located in low-wage nations. So automating is key for any shift.

Still, getting U.S. production to account for more than a tiny fraction of their global totals will be tough. Nike employs 1,300 at factories in Oregon and Missouri, and says it plans to invest in advanced manufacturing to bring production to the U.S. Even if many shoe factories were to get built in the U.S., most of the jobs they’d bring would likely go to industrial robots or 3D printers, not people. Adidas, for example, says its upcoming “speed factory” in the Atlanta area will initially employ only about 160 people. And Under Armour uses just a dozen workers to make its 3D-printed shoes in New Hampshire.

Classroom discussion questions:

  1. Why does the U.S. want shoe jobs back?
  2. Will Nike ever leave its plants in China and Vietnam?

OM in the News: Reebok Starts Reshoring

reebok“Sports equipment manufacturer Reebok is bringing some of its shoemaking back to the U.S., unveiling plans to open a new manufacturing lab next year using innovative liquid material and 3-D drawing,” reports IndustryWeek (Oct. 24, 2016). Some parts of the shoes planned will come from Asia, but the most technical components will be manufactured in Michigan.

German chemical giant BASF developed with Reebok a liquid material that is drawn across the outsole of the shoe for a three-dimensional fit with the help of 3-D drawing. The material helps absorb shock. “This is the very first use of this process to make athletic footwear. We borrowed and enhanced it from a process we found in the automotive industry,” said a Reebok executive. “The Liquid Factory concept is proprietary to Reebok.”

All of Reebok’s shoes were previously made in Asia.

In the short term, Reebok will only produce a small series of the shoes at the relatively high price ($189) due to still expensive development costs. In the long term, Reebok hopes to use this technology to create a product with competitive prices. “The Liquid Factory process is very flexible in that each machine can be used to create as many different concepts as imagination allows — it’s programming, not molds,” Reebok explained. “Scaling up is a matter of installing more Liquid Factory machine setups. The local manufacturing also gets us much closer to the consumer in terms of speed to market.”

Reebok is not alone in localizing production. In May, Germany’s Adidas announced it was opening a production site operated mostly by robots in the city of Ansbach, due to begin mass production next year. An Adidas site is due to open next year in the US.

Classroom discussion questions:

  1. Why is Reebok reshoring some of its production? Why not more?
  2. Explain the Liquid Factory concept.