Blue Ribbon Sports, co-founded by Phil Knight and Bill Bowerman in 1962, began as a US distributor for Japanese shoe manufacturer Onitsuka, selling merchandise from the backs of cars at local track meets.\u00a0 Over 50 years later, we now know Blue Ribbon Sports as Nike \u2013 the top manufacturer of athletic footwear and apparel in the world, with a market cap of $120+ billion and annual sales exceeding $36 billion [1].\u00a0 The backbone of Nike\u2019s transformation over the last half century lies in its core competencies: product innovation, performance optimization, and savvy marketing.<\/p>\n
Nike operates in the highly competitive sports apparel and footwear industry, comprised of a small number of global companies that dominate the market.\u00a0 The challenges of the industry are apparent; constantly changing consumer preferences, demand for frequent innovation, and management of a complex, global supply chain.\u00a0 Additive manufacturing has the potential to alter this competitive landscape, and the major players have recognized the need to get in front of this megatrend.<\/p>\n
Additive manufacturing is quickly making inroads into the sports apparel and footwear industry, and for good reason.\u00a0 First, it enables rapid prototyping, saving development and lab time, which is ideal in an industry that requires constant tweaks to optimize product performance.\u00a0 Second, it has the potential to transform what was once a highly labor intensive process to one that is highly automated, which would allow for supply chain simplification and a shift back to local production.\u00a0 Third, 3D manufacturing provides opportunities to produce items economically in smaller quantities, enabling high levels of customization.\u00a0 Lastly, it gives manufacturers the ability to use new types of material that improve comfort and performance.\u00a0 The need for Nike to be at the forefront of additive manufacturing is evident, particularly with Adidas already allocating significant resources to develop capabilities in the area.<\/p>\n
Both Nike and Adidas have partnered with 3D manufacturing houses (Nike with HP, Adidas with Carbon), but with seemingly different strategies [2, 3]. \u00a0While Adidas has already launched the Futurecraft 4D and has plans to mass market the shoe in 2019, Nike has had a more targeted approach, making custom shoes for elite runners.<\/p>\n
Nike first collaborated with Olympian Allyson Felix during the 2016 Summer Olympics, designing a high end sprinting shoe based on Felix\u2019s biomechanics and individual specifications [4].\u00a0 More recently, Nike developed the \u201cFlyprint\u201d for Eliud Kipchoge, a professional long distance runner, where the benefits of 3D manufacturing were apparent.\u00a0 Nike described the process on their website: \u201cThe process of solving expressly for Kipchoge\u2019s needs began in earnest in early 2018. \u00a0Designers kicked off a rapid-fire prototyping phase (where they went through thousands of possibilities).\u00a0 Based on Kipchoge\u2019s initial feedback, designers made updates to the shoe in hours, and it took only nine days to get the next round of samples to Kenya (most of this time due to shipping). \u00a0Shortly after that, Kipchoge tested and approved the next version [5].\u201d\u00a0 3D manufacturing enabled this rapid prototyping, enhanced customization, and production speed, but thus far, Nike has limited its focus to elite athletes.<\/p>\n
On the other hand, Adidas has plans to aggressively scale its 3D manufacturing capabilities, with the goal of becoming the world\u2019s largest producer of 3D printed products.\u00a0 By the end of 2017, they had produced 5,000 pairs of 3D manufactured shoes; the goal is 100,000 by the end of 2018 and over one million by the end of 2019.\u00a0\u00a0To further cement its position in the space, Adidas has made significant investments in Carbon, one of the pioneers in the industry: “Adidas is helping Carbon, a startup with more than $200 million in funding but just over 200 people, build up its industrial supply chain\u2014printing is currently being done at Carbon\u2019s headquarters, in Redwood City, California.\u00a0 By the end of this year, Adidas will begin installing the machinery in its Speedfactory in Germany.\u00a0 Eventually, Adidas plans to distribute these printers across the globe, using Futurecraft 4D technology to achieve the holy grail of shoe design: footwear customized to the intricacies of someone\u2019s individual foot shape and gait [6].”<\/p>\n
Nike management should mimic Adidas\u2019 playbook. \u00a0Rather than focus on a small subset of elite athletes, Nike should focus on achieving mass market scale by ramping up its production capabilities and more broadly marketing a line of 3D products.\u00a0 Before long, consumers will have the ability to get a physical assessment in store, and have custom shoes 3D printed on site, completing transforming the customer experience.\u00a0 At this point, it looks like those shoes will be Adidas, unless Nike quickly shifts its strategy in the space.<\/p>\n
Do you think mass customization is the future of the footwear industry (and apparel more broadly)?\u00a0 If so, how can Nike bridge the gap with Adidas, who is years ahead from both a production capability and technological perspective?<\/p>\n
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Additive manufacturing within footwear and apparel has the potential to completely alter the customer retail experience as well as supply chain design for the largest players in the industry. How are Nike and Adidas deploying resources to capitalize on this shift?<\/p>\n","protected":false},"author":11211,"featured_media":31801,"comment_status":"open","ping_status":"closed","template":"","categories":[],"class_list":["post-31751","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","hck-taxonomy-organization-nike","hck-taxonomy-industry-apparel-and-accessories","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2018\/","yoast_head":"\n