{"id":29647,"date":"2018-11-12T20:43:59","date_gmt":"2018-11-13T01:43:59","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/additive-manufacturing-and-the-future-of-nike\/"},"modified":"2018-11-12T20:43:59","modified_gmt":"2018-11-13T01:43:59","slug":"additive-manufacturing-and-the-future-of-nike","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/additive-manufacturing-and-the-future-of-nike\/","title":{"rendered":"Additive manufacturing and the future of Nike"},"content":{"rendered":"

Nike is the largest seller of athletic footwear and apparel in the world. The industry is highly competitive, with Adidas, New Balance, Puma, and Under Armour being frequently sited key competitors of Nike. These players competed on the design, development, marketing and selling of athletic footwear, apparel, equipment, accessories, and services.1<\/sup><\/p>\n

Additive manufacturing (also known as 3D printing) is a method of translating a digital design to produce physical objects by adding successive think layers of materials. It poses 4 sources of competitive advantage for Nike:<\/p>\n

    \n
  1. Easier product development and testing, since additive manufacturing allows for fast iterations of design<\/li>\n
  2. More efficient production process, from flexibility to implement design changes, reduced waste of materials, and ability to produce locally instead of having to centralize production in low cost locations (reduced waste and carbon footprint also fit with the company\u2019s zero waste pledge and Considered Index)2<\/sup><\/li>\n
  3. Better quality of products, as 3D printed shoes could be better fitting, more durable, and lighter<\/li>\n
  4. Ability to customize, since unit cost of making a single piece or many is about the same, and new additive manufacturing technological advances now allow for minor design tweaks without changing global (overall) design of a product<\/li>\n<\/ol>\n

    Current state<\/strong><\/p>\n

    Historically, Nike and its competitors have used additive manufacturing in their prototyping process. The application to mass production was limited due to high cost and the fact that it took two hours to 3D print a single sole in 2013.3<\/sup> This changed in 2015, when competitors New Balance and Adidas launched limited-edition shoes made with 3D printed midsoles.4<\/sup> In the following years, Nike explicitly make additive manufacturing a core part of its strategy. In its 2017 analyst call, CEO Mark Parker commented: \u201cwe’re continuing to scale our transition from cut and sew, where precision is at the stitch level, to digital design, where precision is at the pixel level.\u201d The goal is \u201cgetting product to the consumer faster. It’s about lowering our product cost, as we talked about, really trying to drive greater labor productivity, less waste in the system, new design capabilities.\u201d5<\/sup><\/p>\n

    Nike partnered with various 3D printing companies, including HP and ProdWay, and in 2018, launched Nike Flyprint \u2013 the first 3D-printed textile upper in performance footwear. The benefit was multitude: Nike was able to prototype with Flyprint 16 times faster than in any previous manufacturing method; the shoes are lighter and more breathable due to increased interconnection between parts; and it was able to translate athlete data directly into textile geometries.6<\/sup><\/p>\n

    Medium term speculation<\/strong><\/p>\n

    Going forward, Nike saw the technology a key component in increasing the \u201cspeed to market\u201d, as well as a source of potentially longer-term benefits including customization for tailor-made footwear solutions.7<\/sup> According to additive manufacturing consultant Alan Guyan, the opportunity of additive manufacturing is in customization, beyond efficient manufacturing, and all of the leading footwear companies are investing in customizable programs. 8<\/sup> A key challenge is to ensure that design is not compromised for anatomical fit, since design is still the key driver for customer purchasing decisions.9<\/sup> Therefore the companies need to decide on the parts of designs that are most valuable for customization and least susceptible to design compromise. (primary research) James Carnes, VP of strategy creation at Adidas further suggested that, making additive manufacturing fully-customized requires the cost of material to further decrease.10<\/sup><\/p>\n

    Recommendations<\/strong><\/p>\n

    Given the potential additive manufacturing has on manufacturing efficiency, product quality, speed to market, and general brand equity of Nike, it should consider going further than relying on partnerships with specialty additive manufacturing technology companies, and develop proprietary technology and methods in-house.<\/p>\n

    In the long term, Nike could also use similar technology to prototype and produce its other products, including apparel, equipment, and accessories. Shoes have seen more application of additive manufacturing since the material (resin or power) and design (organic, stable shape) of soles are more conducive to the technology. However, recent advancement in additive manufacturing allows it to be used with other materials, and have more variability in design.11<\/sup><\/p>\n

    Open question<\/strong><\/p>\n

    If Nike uses additive manufacturing to customize its shoes for customers based on customers data, would it diminish the value of design? Nike has a brand built around the tradition of building each design for a star athlete, would this become obsolete as each pair of shoes is now made for a specific customer? What does Nike need to do to proactively manage its brand, value proposition, and relationship with those star athletes?<\/p>\n

    (743 words)<\/p>\n

     <\/p>\n

    References<\/strong><\/p>\n

      \n
    1. NIKE, Inc. Form 10-K, 2018. https:\/\/s1.q4cdn.com\/806093406\/files\/doc_financials\/2018\/ar\/docs\/nike-2018-form-10K.pdf<\/a>.<\/li>\n
    2. Kell, John. \u201cNike Now Uses Recycled Materials In Most Of Its Gear.\u201d May 11, 2016. http:\/\/fortune.com\/2016\/05\/11\/nike-recycled-materials-gear\/<\/a>.<\/li>\n
    3. Jopson, Barney. \u201cNew stamping ground for Nike and Adidas as 3D shoes kick off.\u201d Financial Times.<\/em> June 9, 2013. https:\/\/www.ft.com\/content\/1d09a66e-d097-11e2-a050-00144feab7de<\/a>.<\/li>\n
    4. Allen, Rachel. \u201cAdidas Launches 3D-Printed Performance Footwear.\u201d Footwear News. <\/em>October 9, 2015. https:\/\/footwearnews.com\/2015\/focus\/athletic-outdoor\/adidas-futurecraft-3d-printed-sneakers-technology-photos-161298\/<\/a>.<\/li>\n
    5. NIKE, Inc. FY 2017 Q1 Earnings Release Conference Call Transcript. https:\/\/www.sec.gov\/Archives\/edgar\/data\/320187\/000032018716000376\/a8-kq1fy17erccexhibit9911.htm<\/a><\/li>\n
    6. \u201cWhat is Nike Flyprint?\u201d Nike News.<\/em> April 17, 2018. https:\/\/news.nike.com\/news\/nike-flyprint-3d-printed-textile<\/a>.<\/li>\n
    7. Chochrek, Ella. \u201cNike Is Getting Into the 3D Printing Game.\u201d Footwear News.<\/em> June 7, 2017. https:\/\/footwearnews.com\/2017\/focus\/athletic-outdoor\/nike-3d-printing-sneakers-prodways-368238\/<\/a>.<\/li>\n
    8. Primary research: interview with Alan Guyan, Director of Design & Manufacturing Innovation at Under Armour, Guest Speaker at Additive Manufacturing User Group and IMTS International Machine Tool Show.<\/li>\n
    9. Spahiu, Tatjana. \u201c3D Printing as a New Technology for Apparel Designing and Manufacturing.\u201d<\/em> International Textile Conference.<\/em> November 2016.<\/li>\n
    10. Cheng, Andria. \u201cHow Adidas Plans To Bring 3D Printing To The Masses.\u201d May 22, 2018. https:\/\/www.forbes.com\/sites\/andriacheng\/2018\/05\/22\/with-adidas-3d-printing-may-finally-see-its-mass-retail-potential\/#1ed543af4a60<\/a>.<\/li>\n
    11. R Melnikova, A Ehrmann and K Finsterbusch. \u201c3D printing of textile-based structures by Fused Deposition Modelling (FDM) with different polymer materials.\u201d IOP Science.<\/em><\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

      Nike Mission Statement: To Bring inspiration and innovation to every athlete in the world (if you have a body you are an athlete).<\/p>\n","protected":false},"author":11719,"featured_media":29648,"comment_status":"open","ping_status":"closed","template":"","categories":[4102,3340],"class_list":["post-29647","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-3dprinting","category-additive-manufacturing","hck-taxonomy-organization-nike","hck-taxonomy-industry-consumer-products","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2018\/","yoast_head":"\nAdditive manufacturing and the future of Nike - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/additive-manufacturing-and-the-future-of-nike\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Additive manufacturing and the future of Nike - 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