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Adidas and Nike Believe in Smart Factories

Nike and Adidas are planning to increase the output of speed factories in the US and Germany, making sure that the data generated in its Far East sites also helps to further optimise future design and production processes.

A report by Deutsche Bank has shown that the Adidas factory in Germany can produce a pair of shoes in five hours, which is the speed of light, considering producing the same pair of shoes in Asia and shipping them to Europe will take over a month. The pursuit of lower manufacturing costs has been a crucial part of textile and footwear manufacturing since at least the first industrial revolution.

“The nature of cost reduction is changing, though. In the past decade, most cost optimisation took the form of geographic relocation as firms moved production to China and then Vietnam as they sought lower-wage workers,” states the report. “But despite the rise in labour costs in these countries, a migration to new lower-wage nations is unlikely. It is true that a lot of noise has been made about reshoring to developed countries, particularly the US.

Adidas has already invested in its Speedfactory programme taking place in Vietnam; however, the ultimate goal within the industry’s eventual transition to automation is to track data throughout a consumer good’s lifecycle – from design, to manufacture, to retail.

This has become even more important with internet shopping making customers more used to a greater array of designs. Successful stores are those that quickly bring to market new designs. In this regard, the potential is already starting to be seen.

Nike’s Flyknit shoes are made with a highly automated process, as the knitting machines, located in China, feedback production data to help designers and engineers located in the US. This allows more rapid upgrades and changes to be made to the product. The data generated also helps Nike further optimise future design and production processes.

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