Before we take a look at how Under Armour is reinventing its supply chain by adopting digital technologies, it’s important to note a few facts –
- In even the most advanced footwear manufacturing facility, ~150-200 people touch a pair of shoes as it moves down the production line 
- On average, a running shoe is manufactured using 55 different pieces 
- In the traditional manufacturing model, it takes about 12-14 months to move from ideation to full production for running shoes 
The apparel and footwear industry has not seen much innovation around its manufacturing processes in the last century. However, the emergence and adoption of technologies such as 3D-printing, scanning, and imaging are changing the way Nike, Adidas, New Balance, and Under Armour design shoes. These technologies are essentially disrupting the footwear design and production process by enabling customization and reducing lead times and time in transit. 
Figure 1 below provides a snapshot of the supply chain model before and after the introduction of 3D-printing.
Figure 1 – How 3D-Printing is disrupting footwear manufacturing
OPERATING MODEL CHANGES
Prior to 2015, Under Armour’s footwear and apparel were produced by 29 different manufacturers across 14 countries, with 65% of products made in China, Jordan, Vietnam, and Indonesia.  With rising labor and energy costs in China and other developing markets, complications with international shipping, and significant advancements in manufacturing technology (e.g., robotics, automation, 3D-printing), Under Armour began to reevaluate the 100-year old manufacturing model.
“To develop and discover ways to use advanced manufacturing processes to make products on a smaller scale in local markets while improving products’ performance.” 
To achieve the above goal, Under Armour launched the “local-for-local” manufacturing model, helping manufacture products closer to the markets where they are sold.
How is Under Armour implementing this new model?
Earlier this year, Under Armour unveiled the UA Lighthouse, its new center for manufacturing and design innovation in Baltimore. The center will focus on developing cutting-edge manufacturing processes and leveraging advanced technologies to design high-quality products locally with minimal amounts of raw materials.
Specifically, this new innovation center in Baltimore has –
- 3D Design and Body Scanning – Takes volumetric body scans and outputs specifications for designing custom footwear and apparel.
- 3D Printing and Prototyping – Five-axis machining center with fabrication tools that help convert scans and ideas into tangible products.
- Apparel and Footwear Prototyping – Area within the center where designers and engineers will collaborate to design products and processes in ways beyond the traditional cut-and-make methods.
- Apparel and Footwear Pilot Lines – Proving ground for manufacturing processes and concepts to see how they’ll perform in full-scale production environments. 
Here’s a video that provides a sneak peek into the UA Lighthouse:
And here’s a video showcasing Under Armour’s first 3D-printed shoe (UA Architech). 
Potential impact of Under Armour’s new operating model
Benefits to Under Armour:
- On-demand manufacturing – Imagine walking into an Under Armour store, scanning your foot, and receiving a custom shoe within a few hours. That creates significant customer value, reduces time-to-market by removing intermediaries, eliminates shipping costs, and simplifies inventory management.
- Waste reduction – The new processes and technologies are already helping Under Armour reduce wastage and raw material costs. Their SpeedForm shoe is manufactured using 14 pieces versus the industry average of 55 pieces per running shoe. 
- Increased agility – The biggest drawback of the traditional model is that by the time retail stores receive the products (~15 months after ideation), the styles may be out of style. In a recent interview, Randy Harward, Senior VP of Advanced Materials and Manufacturing at Under Armour, said: “You’ll still have some things taking 12 to 14 months, but you’ll have 30 to 50 percent of your product made within three weeks.” 
- Creation of local jobs – By deploying the local-for-local manufacturing model, Under Armour is essentially “onshoring” jobs.
Looking to the future, Under Armour will need to take actions to address the following:
- Consumer perception – Large majority of consumers still perceive 3D-printing products to be a hype or marketing gimmick. Under Armour will need to spend a significant amount of time to educate consumers about the performance of 3D-printed shoes and apparel.
- Economies of scale – While 3D-printing significantly compresses the supply chain, the costs of proprietary raw materials (usually sold at high profit margins) are high. Under Armour will need to work with their raw material partners to drive down costs. 
- Intellectual property – 3D-printing is expected to grow by 330% between 2012 and 2020 with a 48% adoption rate across manufacturing companies . With such high adoption, anyone with the 3D scan can produce an Under Armour designed shoe.
- Hiring skilled workforce – As new technologies disrupt the traditional cut-and-make model, Under Armour will need to invest in upskilling existing and potential employees by providing training for operating new technologies (3D-scanning, 3D-printing, etc.).
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