After more than twenty years of overseas outsourcing, manufacturing is returning home to be closer to their customers.
“What we’ve looked at closely is using machines that build with minimal waste or zero waste”
Adidas is one of the growing examples of the rise of the machines. Twenty years ago the company moved its manufacturing facilities from its home country of Germany to Asia, where cheap labor was abundant. In a bold shift in its business model, Adidas unveiled its prototype SPEEDFACTORY in 2016 and will begin full production in Ansbach, Germany in 2017. Plants are on the drawing board for Atlanta, GA, and Western Europe.
What’s fueling this bold action? Robots—costs have decreased while capability and reliability have increased. As a result, robots have become much more economically attractive. The German robot maker Kuka estimates a typical industrial robot costs about $5.32 USD an hour.1 In comparison, the average US manufacturing worker earns $26 USD an hour,2 the average German manufacturing worker earns $53 USD an hour,1 and the average manufacturing worker in China earns $11 USD an hour.1 Interestingly, to remain competitive, manufacturers in China are increasingly turning to automation.
Inspired by bold ideas from the automotive and aerospace industry, Adidas is placing a heavy emphasis on maximizing sustainability and protecting the environment. Adidas VP of Design Ben Herath explains, “What we’ve looked at closely is using machines that build with minimal waste or zero waste. The shoes are crafted and made in a sustainable way where the aim is around reduction of waste.” Herath also notes, “By bringing production closer to the consumer, you reduce a lot of the energy that goes into transporting goods all over the world.”3
The big question is how disruptive this shift will be to human labor. Robot-operated facilities are a plus when a plant is re-shored in the developed world. For example, each SPEEDFACTOR will create 150-160 new jobs. But what happens in the developing nations when hand labor is no longer required? According to the UN, two-thirds of jobs in developing countries are at risk.4
Adidas is one of the first in the apparel industry to make the move to robots; Nike is in close pursuit. As robots take over shoe production, other apparel manufacturers will quickly follow suit.
- difiwaxxgee, “Robots Taking Over The Apparel Production,” The Blast, April 5, 2017, http://www.theblastbydigiwaxx.com/2017/04/05/robots-taking-apparel-production/
- National Association of Manufacturers, “Top Twenty Facts About Manufacturing,” 2017, http://www.nam.org/Newsroom/Top-20-Facts-About-Manufacturing/
- Ben Roazen, “An Explanation of Adidas’ SPEEDFACTORY Facility,” Hypebeast, Oct 5, 2016, https://hypebeast.com/2016/10/adidas-speedfactory-futurecraft-interview-ben-herath
- Eleazer Corpuz, “UN Report: Robots Will Replace Two-Thirds of All Workers in the Developing World,” Futurism, November 11, 2014, https://futurism.com/un-report-robots-will-replace-two-thirds-of-all-workers-in-the-developing-world/