Since Nike was founded in 1972, they have been a leader of innovation and elite performance quality in the sporting goods industry, particularly with shoes which drove ~60% of their $31B in revenue in 2017 [1]. This innovative mindset can be seen in historical investments in shoe performance technology, with Nike being the first to develop rubber spikes and air sole cushioning for improved performance [2]. It is therefore unsurprising that they have been among the first apparel companies to invest in 3D printing, a type of additive manufacturing, to enhance their shoe prototype and production process. Compared to manual manufacturing, 3D printing can significantly reduce the time needed to iterate through different prototyping designs and costs associated with upfront investment in tools [3]. This provides flexibility and agility to create higher quality products and deliver them to the market ahead of competitors. Nike has claimed that since partnering with HP\u2019s 3D printing lab in 2012 their prototyping is now 16 times faster [4] than other manufacturing methods. This benefit is echoed by one of their core competitors Adidas, who also stated that prototyping processes reduced from 4-6 weeks to as little as 2-4 days [3]. Additionally, 3D printing was estimated in 2017 by Morgan Stanley to provide a 10% cost efficiency at Nike [5], while Forbes estimated a reduction in Nike\u2019s environmental footprint by $3.5M. [7]<\/p>\n
Nike\u2019s management team have made a few key decisions to capture value from 3D printing technology in the shorter term. Firstly, Nike has used patents to maintain a competitive and innovative edge in the industry. Nike has \u201cnearly doubled [it\u2019s design patents] since 2009 and the company has the third largest U.S. portfolio of design patents\u201d [7]. Specifically, in 2015 they received approval for a patent for affixing a shoe upper to the midsole. [6] Secondly, in 2012 Nike partnered with HP\u2019s 3D printing lab which provides valuable access to market-leading 3D printers. This is particularly important given how rapidly the technology is changing, and how influential the technology is for delivering the highest quality products. Finally, Nike has committed to innovation by expanding beyond using 3D printing solely for shoe components to an entire shoe. In 2016 they created the first 3D printed upper shoe, called the \u201cFlyKnit\u201d shoe, which uses data about an athlete\u2019s foot to determine the best type of material and composition for their shoe, then uses a 3D knitting process to create the shoe. This knitting process has been shown to create a more dynamic, breathable, higher performing shoe. [8]<\/p>\n
While 3D printing has currently focused on specific innovations and prototyping, in the longer term Nike has to consider the potential implications of mass production using 3D printing, the shift in consumer buyer behavior, the rise of home 3D printing, and how to remain at the forefront as the technology advances.<\/p>\n
Nike has committed to testing HP\u2019s mass production 3D printers, implying mass production may be on the horizon [7]. This comes at a timely moment, as in 2017 Adidas committed to mass producing 100,000 shoes through their partnership with 3D printing company Carbon [9]. Nike has also considered the implications of a shift in consumer buying behavior if 3D printers become common-place in the home or at outlet malls where customizable shoes could be created. [9] In 2015, Nike\u2019s COO stated that one goal was for consumers to no longer be \u201ctethered to in-store offerings\u201d and would be able to purchase a shoe design file to print at home themselves. [10]<\/p>\n
In addition to their current strategy, I believe that Nike should consider expanding the use of 3D printing in prototyping to apparel and other expensive equipment (e.g., tennis rackets and golf clubs) to get elite athlete feedback and deliver performance improvements at a faster pace to potential leap ahead of competitors in other product categories. Furthermore, there needs to be critical analysis of the impact of mass-production and other potential trends for this technology. While the benefit of 3D printing for prototypes seem clear, the jury is still out on mass production. There are many additional aspects to consider such as the net cost impact, the impact on workforce location, size and skill set, overall environmental impact, and consumer value perception that are more difficult to assess at this point.<\/p>\n
The outcomes of this analysis and the market trends will have rippling effects that transcend Nike\u2019s strategy, organizational design and financial results and may shift the sporting goods industry forever. Some core open ended questions are:<\/p>\n
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Sources:<\/u><\/strong><\/p>\n [1]: Revenue from footwear segment of Nike, Adidas and Puma from 2010 to 2017 (in billion U.S. dollars), from website https:\/\/www.statista.com\/statistics\/278834\/revenue-nike-adidas-puma-footwear-segment\/<\/a> , accessed 11\/13\/18<\/p>\n [2]: HBS Case, Nike Football: World Cup 2010 South Africa; authors: Elie Ofek and Ryan Johnson, revised: January 17, 2013<\/p>\n [3]: \u201c New stamping ground for Nike and Adidas as 3D shoes kick off\u201d, June 9th<\/sup> 2013, article on financial time website, https:\/\/www.ft.com\/content\/1d09a66e-d097-11e2-a050-00144feab7de<\/a>, accessed 11\/10\/18<\/p>\n [4]: \u201cNike uses athlete date to 3D print customized footwear\u201d, 17th<\/sup> April 2018, online article, https:\/\/techcircle.vccircle.com\/2018\/04\/17\/nike-uses-athlete-data-to-3d-print-customised-footwear<\/a>, accessed 11\/11\/18<\/p>\n [5] \u201cA revolution is coming in the way your sneakers are designed and manufactured\u201d, June 8th<\/sup> 2017, Quartz online, https:\/\/qz.com\/1000737\/a-revolution-is-coming-in-the-way-your-sneakers-are-designed-and-manufactured\/<\/a> , 11\/11\/18<\/p>\n [6] \u201cNike was just granted a key patent for 3D printed shoe technology\u201d, article online, 14th<\/sup> October 2015, https:\/\/www.digitaltrends.com\/cool-tech\/nike-patents-3d-printed-shoe-technology\/<\/a>, accessed 11\/11\/18<\/p>\n [7] \u201cHere\u2019s how Nike is innovating to scale up its manufacturing\u201d, article on Forbes website, May 18th<\/sup> 2016, https:\/\/www.forbes.com\/sites\/greatspeculations\/2016\/05\/18\/heres-how-nike-is-innovating-to-scale-up-its-manufacturing\/#545fa3381497<\/a>, accessed 11\/11\/18<\/p>\n [8] \u201cWhat is Nike Flyprint?\u201d, article online Nike website, April 17th<\/sup> 2018, \u00a0https:\/\/news.nike.com\/news\/nike-flyprint-3d-printed-textile<\/a> , accessed 11\/11\/18<\/p>\n [9] \u201c Adidas unveils industry\u2019s first application of digital light synthesis with Futurecraft 4D\u201d, article on Adidas website, 7th<\/sup> April 2017, https:\/\/www.adidas-group.com\/en\/media\/news-archive\/press-releases\/2017\/adidas-unveils-industrys-first-application-digital-light-synthes\/<\/a> , accessed 11\/11\/18<\/p>\n