OM in the News: German Robots to Make Adidas Running Shoes in 2016
A 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:
- Why the move to Europe?
- Discuss the implications of mass customization at Adidas.