Adidas is using innovative manufacturing to return production to Germany, skirt rising labour costs in Asia, and most importantly, shorten its supply chain.

Germany has successfully maintained its domestic manufacturing base, largely through innovative engineering. It is not unusual for a German firm to use robots and techniques such as additive manufacturing or 3D printing. What stands out is that, with the opening of its new “Speedfactory” in Ansbach, Bavaria, German sporting goods giant Adidas will use such methods to make sports shoes. While it may not inspire a sense of wonder, this is an industry that rakes in $80 billion a year.

It is also an industry that has widely been offshored to Asia, particularly China, Indonesia and Vietnam. Most of the work is done manually; however the cost of labour is increasing, as is the possibility of labour shortages. Concurrently, advanced manufacturing is lessening the need for legions of offshore workers. But as The Economist explains, “Adidas’s motivation for its Speedfactories…goes well beyond labour cost. People want fashionable shoes immediately, but the supply chain struggles to keep up.”

The Speedfactory’s primary aim is to shorten the supply chain. Where currently it can take up to 18 months to roll out a new pair of trainers, Adidas aims to do so in less than a week or even a single day. The new production system is highly (though not 100%) automated: Once a product passes the design phase, which itself is increasingly digitised, production will include computerised knitting, robotic cutting, and additive manufacturing.

A compressed production cycle will give Adidas more leeway to try out new styles and materials, and create customised products. “This will lead to products that will look and perform differently”, says Gerd Manz, VP of Technology Innovation at Adidas.

Adidas is taking a kind of experimental approach with the Speedfactory. When it begins production later this year, the company plans to do so incrementally, eventually ramping up to 500,000 pairs of trainers a year. A second Speedfactory is being constructed in the US, and more could follow. If successful, Adidas will adapt the Speedfactory’s production methods to other new factories as well as to existing ones, including those in Asia.

Well aware of the manufacturing trends in motion at Adidas, American rival Nike will not be left behind. Amongst the initiatives it has underway is its Advanced Product Creation Centre, located at the company’s headquarters in Beaverton, Oregon. The facility focuses on exploring 3D printing and other automated production methods, which Nike has used previously to make customised shoes for elite athletes.

Adidas’s Speedfactory is a trailblazing example of pulling production out of Asia and transforming it with technology – one that will likely impact consumer goods manufacturing, and potentially the entire manufacturing sector.

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