The Future of Footwear Manufacturing

Another potentially disruptive force with which Nike’s production and distribution models will have to contend is automation. The high cost of labor in the United States is the primary factor pushing manufacturing overseas, but as robotics technology improves, companies like Nike have the opportunity to circumvent these untenable costs and reshore many of their manufacturing operations.

According to Morgan Stanley forecasts, “Nearly 20% of production for Nike and Adidas shoes will move to more automated factories by 2023 due to a ‘buy now, wear now’ shopping environment forced by the shift to ecommerce.”

While many overseas factories will successfully adjust to the automated future, those that do not risk losing their cost advantage over domestic facilities. If automation proceeds as predicted — an International Federation of Robotics report claims that some 1.3 million new robots will be installed in factories over the next three years — companies like Nike might strongly consider restructuring their manufacturing strategies.

Regardless, an enterprise as expansive as Nike’s footwear division must continue to find ways to minimize production and distribution costs across all of its manufacturing channels. This will require a great deal of responsive logistical planning, as well as a firm commitment from Nike to be as innovative in its supply chain operations as it has been for decades in its product design.

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