German sports-goods company Adidas is running as fast as possible to win over the hearts and feet of its consumers. In its latest annual report, Adidas declared its ambition to achieve 50% of its net sales (approximately 20 billion euros) through “speed enabled” manufacturing by 2020. Reaching this lofty goal will require a drastic transformation of its global supply chain: Adidas will move away from advanced, seasonal merchandise planning and labor-intensive assembly, towards in-season product development and robotics-enabled manufacturing.
Though digitization is not new to the footwear world – in 2016, Nike partnered with multinational information technology company HP to prototype footwear using 3D printing, and New Balance released a shoe with a 3D-printed midsole – Adidas seems to be marketing 3D-printing as its new, widespread manufacturing strategy.
Ready, Set, Go…
In September 2016, Adidas unveiled the Futurecraft M.F.G (“Made for Germany”), the first running shoe created at a manufacturing facility coined by Adidas as a “Speedfactory”. This Speedfactory, located in Germany, replaces manual tasks such as stitching and gluing with mechanized molding and bonding performed by 3D printers. Adidas’ primary motivation for Speedfactories is in the name: speed to market. Currently, the development process for running shoes – from design sketch to retailer shelf (with intermediate steps such as raw materials procurement and factory retooling) – can take up to 18 months in total. With the Speedfactory, Adidas hopes to shorten its time to market to less than one week, and eventually even one day. At the core of this creation process is the belief that digitalization will enable consumer-driven innovation and customization. Imagine a world where the consumer can design shoes to the exact size, shape and gait of each foot, creating a unique design that only she will have, and walk out the door with a bespoke pair that same day. This futuristic world may soon be a reality, according to Adidas.
…Ready, Set, Wait.
Mass production of customized goods is recently imaginable due to the expanding capabilities of information technology. However, imagination can be expensive. In the apparel industry, 3D body digitizers are beginning to play the role of “electronic tailors”, allowing the consumer to be sized based on automatic measurements from a digital scanner. These machines are still incredibly costly (one very basic digitizer, produced by the company Size Stream, is quoted at $15,000). In the short term, mass customization of shoe sizing does not seem like a financially viable option for Adidas – at least not on a large scale. Each of Adidas’ Speedfactories (of which the company plans to operate two by year-end 2017) are designed to produce 500,000 pairs of shoes annually, a mere 0.1% of Adidas’ current annual shoe volume of 360 million pairs.
Over time, however, as technology advances and diffuses, prices should fall. Adidas could serve its customers and shareholders well in the long term by closely monitoring the innovations in 3D body imaging, and becoming a mass adopter when the price is right.
Adidas has announced plans to launch city-themed, 3D-printed shoes within the next two years, designed to meet the particular needs of city-dwellers in London, Paris, New York, Los Angeles, Tokyo, and Shanghai. For instance, the “AM4LDN Adidas Made For London” shoe will emphasize reflectors and waterproofing for Londoners who tend to jog in the dark and rain, while sneakers for Shanghai will be adapted for performance on indoor tracks. With each new specification, though, Adidas must acquire deep knowledge of the relevant 3D printing landscape. Contrary to popular belief, there are major differences between 3D printing processes (also known as additive manufacturing) for various materials. Plastic additive manufacturing differs from metal additive manufacturing, which differs from knitted materials additive manufacturing, and expertise in one does not imply expertise in another. In the short term, Adidas should focus on building its supply of high-skilled labor, such as engineers with training in various 3D printing technologies. To beat the world’s toughest competitors – Nike, Under Armour, New Balance, and a wealth of Silicon Valley startups – in the digitalization race will require more than just speed. It will require brains!
Is Adidas Running a Race to the Bottom?
In addition to concerns regarding cost levers, it remains to be seen whether 3D printing will have any topline implications for Adidas and other brand powerhouses. It isn’t hard to imagine a world of the future where people will print shoes – with or without an Adidas logo – in the comfort of their own homes. Will 3D printing eventually be the death of brands as we know them today, or can this manufacturing system serve as a sales catalyst, as Adidas is wagering?
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 Adidas, 2016 Annual Report, p. 62, https://www.adidas-group.com/en/investors/financial-reports/#/2016/, accessed November 2017.
 Nike, Inc., “At Nike the Future Is Faster, and It’s 3-D,” https://news.nike.com/news/nike-hp-3d-printing, accessed November 2017.
 New Balance, “The Future of Running Is Here,” https://www.newbalance.com/article?id=4041, accessed November 2017.
 Richard Weiss, “Adidas Brings the Fast Shoe Revolution One Step Closer,” Bloomberg Businessweek, October 5, 2017, https://www.bloomberg.com/news/articles/2017-10-05/adidas-brings-the-fast-shoe-revolution-one-step-closer, accessed November 2017.
 “Adidas’s High-Tech Factory Brings Production Back to Germany,” The Economist, January 14, 2017, https://www.economist.com/news/business/21714394-making-trainers-robots-and-3d-printers-adidass-high-tech-factory-brings-production-back, accessed November 2017.
 Laurent Grimal and Philippe Guerlain, “Mass Customization in Apparel Industry – Implication of Consumer as Co-Creator,” Journal of Economics & Management 15, (2014): 112. ABI/INFORM via ProQuest, accessed November 2017.
 Chris Gayomali, “Here’s What It’s Like To Step Into A 3-D Body Scanner For A Custom-Made Suit,” Fast Company, September 3, 2014, https://www.fastcompany.com/3035092/heres-what-its-like-to-step-into-a-3d-body-scanner-for-a-custom-made-suit, accessed November 2017.
 Adidas, 2016 Annual Report, p. 65, 68, https://www.adidas-group.com/en/investors/financial-reports/#/2016/, accessed November 2017.
 Weiss, “Adidas Brings the Fast Shoe Revolution One Step Closer,” Bloomberg Businessweek.
 Joana Mendonça, M. Granger Morgan, Jaime Bonnín Roca, and Parth Vaishnav, “Getting Past The Hype About 3-D Printing,” MIT Sloan Management Review 58, no. 3 (Spring 2017): 58-59. ABI/INFORM via ProQuest, accessed November 2017.