{"id":23524,"date":"2017-11-15T12:37:00","date_gmt":"2017-11-15T17:37:00","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/adidas-speedfactory-impossible-is-nothing-with-automation\/"},"modified":"2017-11-15T12:37:00","modified_gmt":"2017-11-15T17:37:00","slug":"adidas-speedfactory-impossible-is-nothing-with-automation","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/adidas-speedfactory-impossible-is-nothing-with-automation\/","title":{"rendered":"Adidas Speedfactory: Impossible is Nothing with Automation"},"content":{"rendered":"

Can the Sports Shoe Industry Keep Pace?<\/strong>
\nThe timeline of a sneaker, from the initial sketch, prototyping, testing, material ordering, production, and finally shipping takes 18 months [1]. 75% of sneakers, however, are on sale for less than a year [1]. A sold-out sneaker can take 2 to 3 months to be restocked, by which point demand may disappear [1]. Simply put, the sports shoe industry has not kept pace with fast fashion and changing consumer demand.
\nIn addition, rising prosperity in Asia, where sneaker production has typically been outsourced, has resulted in higher labor costs. These factors demand a revolution in sneaker production and supply chain management. Adidas, like many other German manufacturers, has brought production back home as part of a wave of Industry 4.0, a push by German companies to remain innovative and competitive with automated \u201csmart\u201d factories and shortened supply chains [2].<\/p>\n

The Race is On<\/strong>
\nAdidas is building two Speedfactories, one in Ansbach, Germany, and one in Atlanta, Georgia. Adidas\u2019 Speedfactory is one of the new \u201csmart factories\u201d being built in Germany. The shoe design process is digital, with shoes styled on a computer and then tested for fit and performance. In parallel, another computer will test the production process to make it as efficient as possible. The factory will make the majority of the materials in house, using raw goods such as plastics and fibers. Once the design is complete, the machines will use computerized knitting, robotic cutting, additive manufacturing, and 3D printing to quickly assemble the shoes directly from the computer\u2019s design. This minimizes the setup times and switching costs that typically come with producing multiple shoe designs, which can save hours, if not days, in labor time. The new production system will allow for speed and customization, with the design process taking 6 months, one third of the typical time, and production taking days with the hope of eventually reducing it to hours [3].<\/p>\n

\"\"<\/a><\/p>\n

Because the Speedfactory creates the materials and controls the complete process, it will use data-driven production to \u201cminimize waste, remove glue completely from the product, increase energy efficiency, and significantly reduce the carbon footprint of all product elements\u201d [3]. The data and process can be visually shared with the consumer, increasing transparency and consumer involvement with the design and production.
\nThe factory will not be fully automated, with certain precision jobs still being completed by humans. The Speedfactory will create 160 production jobs, versus the typical thousands in a factory in Asia [4]. Though current output per factory is small (500,000 shoes out 301MM sold in 2016), Adidas hopes that by bringing the shoe closer to consumers, it can increase speed of its supply chain and flexibility in production [5]. The factories can also produce batches as small as 500 shoes (versus the usual 50,000 \u2013 100,000 pairs), enabling Adidas to better control its inventory and react to consumer demand [6]. If these factories are successful in Germany and America, Adidas will roll them out to more geographies [5].<\/p>\n

In Practice<\/strong>
\nUsing its German Speedfactory, Adidas is launching a limited line of 6 sneakers made for 6 cities (Paris, Los Angeles, Shanghai, Tokyo, London, and New York). Adidas traveled to these cities to collect data on the habits of local runners (running routine, sensors for their strides, gait analysis using motion capture) [7]. As a Speedfactory design, these shoes leverage data on fit, function, biometrics, personal preferences for materials and colors, and usage requirements based on geography and weather. Using simulations and computer testing, Adidas iterated and improved on previous designs based on user data. Accordingly, Adidas used the data to create small batches of city-specific shoes. The London shoe, for example, is more reflective and rugged, because Londoners love to run to work, often in the dark with lower visibility and in rainy conditions [7].<\/p>\n

\"\"<\/a><\/p>\n

The Finish Line<\/strong>
\nWhile this new line is generating buzz, Adidas needs to determine whether its Speedfactories are actually scalable, the company\u2019s timeline for expansion, and the changes required in its supply chain and delivery to match the factories\u2019 new speed.
\nAdidas also needs to make sure it keeps pace with its top competitor, Nike, who is experimenting with computerized knitting to make high-tech fabrics like Flyknit and automated production that can assemble the upper part of a show 20x faster than a human employee [8].
\nAs these sports companies race to automation, they need to remember and re-think the human component in forward-thinking design and technology changes. Will our future be fully automated?<\/p>\n

Word Count: 774 Words<\/p>\n

[1] \u201cAdidas\u2019s high-tech factory brings production back to Germany,\u201d Economist, January 14, 2017, [https:\/\/www.economist.com\/news\/business\/21714394-making-trainers-robots-and-3d-printers-adidass-high-tech-factory-brings-production-back], accessed November 2017.
\n[2] Christopher Alessi & Chase Gummer, \u201cGermany Bets on \u2018Smart Factories\u2019 to Keep Its Manufacturing Edge,\u201d Wall Street Journal, [https:\/\/www.wsj.com\/articles\/germany-bets-on-smart-factories-to-keep-its-manufacturing-edge-1414355745], accessed November 2017.
\n[3] \u201cEnter the Speedfactory\u201d, Mashable, [http:\/\/mashable.com\/2017\/11\/03\/adidas-speedfactory-future-tech\/#LtDxMg8g0ZqH], accessed November 2017.
\n[4] David Meyer, \u201cWhy Adidas is Turning to Robots in Germany and the U.S.,\u201d Fortune, [http:\/\/fortune.com\/2016\/05\/25\/adidas-robot-speedfactories\/], accessed November 2017.
\n[5] J\u00f6rn Poltz, \u201cAdidas to Return Mass Shoe Production to Germany in 2017,\u201d Reuters, May 25, 2016, [https:\/\/www.reuters.com\/article\/us-adidas-manufacturing\/adidas-to-return-mass-shoe-production-to-germany-in-2017-idUSKCN0YG0X6], accessed November 2017.
\n[6] Stephanie Pandolph, \u201cAdidas uses Speedfactory to localize shoe designs\u201d, Business Insider, [http:\/\/www.businessinsider.com\/adidas-uses-speedfactory-to-localize-shoe-designs-2017-10], accessed November 2017.
\n[7] Jake Woolf, \u201cAdidas Is Changing the Way It Makes Sneakers\u2014Again,\u201d GQ, October 5, 2017, [https:\/\/www.gq.com\/story\/adidas-made-for-london-speedfactory], accessed November 2017.
\n[8] Richard Weiss, \u201cAdidas Brings the Fast Shoe Revolution One Step Closer,\u201d Bloomberg, [https:\/\/www.bloomberg.com\/news\/articles\/2017-10-05\/adidas-brings-the-fast-shoe-revolution-one-step-closer], accessed November 2017.<\/p>\n","protected":false},"excerpt":{"rendered":"

With fast fashion, consumer demand and preferences change daily. 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