Adidas opened a "Speedfactory" in 2015, which uses robotic technology to manufacture its shoes © Adidas
Adidas opened a "Speedfactory" in 2015, which uses robotic technology to manufacture its shoes © Adidas

Fifth of Nike and Adidas products 'will be made by robots'

15 June 2017

Nearly 20% of Nike and Adidas products will be manufactured in automated factories by 2030, according to a report.

The report, by Morgan Stanley, said growing consumer demand for fast “buy now/ wear now” fashion would spur the athletics companies to speed up supply chains by moving towards automation.

With companies such as H&M and Amazon offering two-day delivery, the fashion calendar has been abandoned and the old model where wholesale decisions were made months in advance of when they hit the shelves is becoming obsolete, the report said.

It added that the factories would likely be owned by the brands, cutting out the need for outside manufacturing and potentially giving the companies a leg up over their competition.

“As brands and their retail partners get faster, they basically can offer a service level similar to what Amazon has, so the brands won’t need Amazon as much as other vendors will,” they said.

“Plus brands will offer much better product on their own websites and with their best retail partners.”

According to MarketWatch, Adidas has forecast it will generate half of its sales from products made with help from technology that increases manufacturing speed, allowing stores to rotate inventory more quickly to keep up with demand trends.

The sportswear giant opened a “Speedfactory” in Germany in December 2015, which uses “intelligent robotic technology” to manufacture shoes, and in April the company announced it would make 5,000 of its Futurecraft 4D shoes with a 3D-printed midsole, available to buy by winter 2017.

Adidas is also constructing a second Speedfactory near Atlanta for its US market, forcing arch-rival Nike to take similar action to decrease manufacturing time. 

One of Nike's initiatives is a form of computerised knitting, called Flyknit, to make the upper parts of a range of trainers. The company has also set up an Advanced Product Creation Centre at its headquarters in Oregon to explore other automated production methods, including 3D printing, according to The Economist

Morgan Stanley analysts predict the future supply chains will be able to cut lead times by 66% or more, which will make products available to consumers more quickly but will also cut down on the number of discounts that are used to clear old, unwanted inventory.  

“We think this helps companies not just cut back on ‘bad’ inventory purchases, but also more importantly, capture the sales upside on hot products in season,” the report said. 

“We think both factors add another 15% to top-line growth.” 

Currently trainers are made mostly by hand in giant factories, often in Asian countries with people assembling components or shaping, bonding and sewing materials.

Morgan Stanley’s report cited an International Federation of Robotics report, which said 1.3m new robots would be installed in manufacturing factories over the next three years.

As a result of increased automation, the International Labour Organization say about 56% of Southeast Asian salaried employment is at risk of displacement by technology over the next 20 years.

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