![\"Screen](\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/Screen-Shot-2015-12-02-at-6.42.15-PM.png\")
<\/a><\/p>\nThe business\u2019s emphasis on performance and service over marketing makes it critical that its manufacturing processes are optimized to allow for high levels of quality and quick customization. In order to compete for market share in the $55B industry with the likes of Nike and Adidas, who exclusively make their shoes abroad where labor is cheap, New Balance has adopted a business model that capitalizes on the company\u2019s domestic manufacturing despite having higher costs.<\/p>\n
Jim and wife Anne Davis are committed to domestic manufacturing, as evidenced by the fact that New Balance is the only remaining major athletic shoe business that still produces shoes in the U.S. New Balance has five manufacturing facilities across MA and ME 1and one wholly-owned distribution center in the U.S, and about 25% of the company\u2019s shoes are manufactured or assembled in the U.S. using imported soles and uppers.<\/p>\n
In the early 2000s, New Balance recognized the need to optimize its labor-intensive operations to be competitive with industry giants Nike and Adidas and implemented the New Balance Executional Excellence (NB2E) program, which was modeled after Toyota Production System concepts and pushed New Balance to improve its operating efficiencies. Management received 100 hours of training in the new operations concepts, and the company switched from batch production, in which a pair of shoes took nine days to produce, to cell-based production, in which operations that were previously separated by departments were arranged in U-shaped formations. New production time for a pair of shoes has since improved to just hours.<\/p>\n The shorter production time has allowed New Balance to ship orders within 24 hours from receipt of order so that retailers are able to reduce their inventories and ensure that shoes are still in fashion when they are received in the U.S. In contrast, retailers dealing with big footwear businesses who ship from abroad must often wait months for their shipments to arrive. Additionally, domestic assembly has undoubtedly provided New Balance with insight into production and helped improve its operational efficiency in all factories.<\/p>\n By focusing on operational efficiency and promoting continuous improvement, New Balance has created a culture that its employees thrive in and that communities are proud to support. Its New England manufacturing facilities have created jobs for 1,300 employees, and the average tenure for manufacturing workers, referred to as \u201cassociates,\u201d is 13 years. NB2E encourages associates to take pride in their work, continuously ask \u201cwhy,\u201d and act as problem solvers. New Balance\u2019s domestic manufacturing also gives it the chance to play up its position as a supporter of social responsibility and local community. Finally, the company’s position as the only remaining shoe company dedicated to domestic manufacturing has given it the ability to sell its shoes for a higher price on the basis of higher quality.<\/p>\n New Balance is an example of a US-based company that has successfully connected its business and operating models. New Balance\u2019s commitment to domestic manufacturing is a differentiating factor that the brand has utilized to its advantage, pricing its shoes at a premium and providing faster delivery on custom orders. From a public perception standpoint, New Balance stands for \u201cthe little guy\u201d and a supporter of local communities and social good.<\/p>\n Moving forward, New Balance must address proposed changes in legislation in which a tariff on imported athletic footwear could be eliminated. While this change would benefit all footwear companies that manufacture abroad, as well as consumers who pay a premium on shoes, the move would put New Balance\u2019s New England manufacturers at a significant disadvantage, as it would make it nearly impossible for U.S. manufacturing to compete against low-wage foreign labor. New Balance lobbied against the change, arguing that the tariffs serve to keep its U.S. manufacturing viable.<\/p>\n New Balance\u2019s patriotism continues to work as a competitive advantage and present opportunities for the future. Since the 2014 announcement that athletic shoes would need to comply with the Berry Amendment, which requires military outfits be manufactured domestically, New Balance has invested in new equipment to produce Berry-compliant shoes. The company also opened an \u201cExperience Store\u201d New York that showcases its commitment to American manufacturing, incorporating a livefeed from a Massachusetts manufacturing floor and a live demonstration of shoe assembly. New Balance rolled out its first global advertising campaign this year in hopes of challenging the biggest players in athletic footwear.<\/p>\n https:\/\/youtu.be\/OGVcOmn9oQU<\/a><\/p>\n Sources:<\/p>\n http:\/\/assets.newbalance.com\/nb-us\/about_nb\/leadership\/documents\/factory_tour_book.pdf<\/a><\/p>\n http:\/\/www.forbes.com\/profile\/jim-davis\/<\/a><\/p>\n http:\/\/www.lean.org\/common\/display\/?o=812<\/a><\/p>\n https:\/\/www.washingtonpost.com\/business\/economy\/new-balance-struggles-as-sole-remaining-major-us-athletic-shoe-manufacturer\/2011\/07\/22\/gIQAZsq9eI_story.html<\/a><\/p>\n https:\/\/www.bostonglobe.com\/news\/nation\/2015\/05\/26\/new-balance-could-beat-back-nike-for-partial-win-pacific-trade-deal\/OECYcqEiHV3rIZcZrCfqZK\/story.html<\/a><\/p>\n http:\/\/www.newbalance.com\/press-releases\/id\/press_2012_nb_releases_first_rl_report.html<\/a><\/p>\n http:\/\/www.inboundlogistics.com\/cms\/article\/managing-domestic-supply-chains\/<\/a><\/p>\n http:\/\/www.cnbc.com\/2015\/06\/09\/new-balance-the-us-company-shaking-up-the-sneakernomics.html<\/a><\/p>\n http:\/\/www.rubbernews.com\/article\/20150218\/NEWS\/302099974\/u-s-footwear-makers-await-government-approvals<\/a><\/p>\n<\/a><\/p>\n<\/a><\/p>\n<\/a><\/p>\n
\n