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OM in the News: Reebok Starts Reshoring

October 27, 2016

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.
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