Business

Adidas Shifting its Speed Factories to Asia

Adidas

German sportswear brand Adidas is shutting down two cutting-edge footwear factories in Germany and the United States and moving production to Asia. The company announced this week that it would be closing plants near Ansbach, Germany, and Atlanta, Georgia. The facilities, which Adidas calls “Speedfactories,” use automated tech to produce sneakers.

The Adidas factories were part of a drive to meet the demand for faster delivery of new styles to its major markets and to counter rising wages in Asia and higher shipping costs. It originally planned a global network of similar factories.

Adidas had hoped to bring shoe production closer to consumers and cut shipping emissions but is now choosing to deploy its Speedfactory technology to two suppliers in Vietnam and China.

When deployed elsewhere, the technology will continue to enable short production times and the production of other types of footwear, not only running shoes, Adidas said. The company said it will continue its collaboration with Oechsler, the operator of both Speedfactories, in the area of 4D printing.

The German sportswear company did not give details for why it was closing the facilities, which have proved expensive and difficult to extend the technology to different products.

Martin Shankland, Adidas head of global operations, said the factories had helped the company improve its expertise in innovative manufacturing, but applying what it had learned with its suppliers would be “more flexible and economic”.

Adidas started production of shoes largely by robots at its “Speedfactory” in the southern town of Ansbach near its Bavarian headquarters in 2016 and opened another near Atlanta in 2017.

The Speedfactories “have been instrumental in furthering our manufacturing innovation,” he said in a statement. The company said that production at the two existing Speedfactories, which were targeting 1 million pairs of shoes between them annually, will come to an end by April 2020 at the latest.

Founded by German cobbler Adi Dassler in 1949, Adidas has shifted most of its production from Europe to Asia and now relies on more than 1 million workers in contract factories, particularly in China and Vietnam.

“In the future, Adidas will concentrate its resources and capacities even more on modernizing its other suppliers and using 4D technology in footwear production,” it said.

Adidas is not eschewing the 3D printing technology it was lauded as a superior way to produce shoes, but it is demonstrating that location for this tech still matters to the bottom line. With the production move, Adidas suggests the business case is still better in Asia, even with advanced technology and despite the distance from target consumers.

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