(Image source: ART STREIBER)
Nike has elaborated on plans to use technology and automation to increase the speed at which it brings products to market.
In an investor meeting, the sports and apparel manufacturer said it would deploy 1,200 new automated machines by the end of the financial year and nearshore production in Asia and North America. This is part of its plans to make its supply chains more responsive and bring manufacturing closer to its consumers.
Eric Sprunk, chief operating officer at Nike, said the company was increasing the use of digitisation, automation and robotics across its entire source base.
“We're digitising our end-to-end supply chain and creating a model with shorter lead times to deliver what consumers want, when they want it, where they want it,” he said.
Professional services firm Morgan Stanley had previously predicted 20% of both Nike and rival Adidas’s products would be made in automated factories by 2030.
Across the business, Nike announced a new “triple-double” strategy. The borrowed basketball term refers to Nikes aims to double its rate of innovation, double its manufacturing speed and double its number of direct consumer contact points.
Sprunk told investors the company was both digitising and vertically integrating its apparel supply chain with its business partner Tegra, to create an “onshore and nearshore network” that would make manufacturing more responsive to the market.
Onshoring would allow Nike to shorten lead times in North America, he said. The firm has already opened a purpose-built footwear factory in North America that will deliver 3m pairs of shoes in 2018, and by 2023 Sprunk said Nike aims to be producing tens of millions of shoes from nearshore factories in North America.
A quarter of these would be sold direct to customers via a “short lead time response model”, he added.
Nearshoring has allowed Nike to reduce its standard manufacturing-to-market time to 10 days or less, down from about 60, said Sprunk.
Sprunk said Nike was also working with its Asian based partners to increase innovation across its regional supply base there.
Source (CIPS): https://www.cips.org/en/supply-management/news/2017/november/nike-onshoring-manufacturing-in-north-america/