Is adidas’ new business model leaving competitors far behind?


(Published in The Produktkulturmagazin issue 4 2016)

Whether a product fulfils its purpose, whether it’s trendy and stylish, and above all whether it has its finger on the pulse of time — these factors are increasingly being decided by the customer in the digital age. It is he who not only discusses and shares brand content with others but meanwhile also creates it himself. But only few brands are able to successfully exploit so-called open source branding for their own purposes. adidas is now taking this concept to the next level, providing consumers with greater influence in the development of products. The clear objective here is to create the ultimate, personalised product for each and every consumer.

Speedfactory is the name of the latest innovation from adidas, with which the enterprise is heralding a new era of manufacturing shoes and challenging the hitherto idea of centralised production. This business model is the very first of its kind to drive a consumer-oriented product creation approach forwards, decentralise manufacturing and respond to customer demands more swiftly. Add to this the fact that the equipment at the planned production facilities will feature innovative technologies with which it will in the future be possible to manufacture sports shoes in constantly rising volumes and with progressive complexity in terms of colours, materials and sizes. With this development, the company is opening the door to unparalleled customisation for high-performance products that are unique with regards to fit, comfort and appearance. “For years, our industry has been playing by the same rules, manufacturing product remotely in Asia,” said adidas Group Executive Board Member Eric Liedtke, responsible for Global Brands. “As the creator brand that challenges convention and looks to co-create the future with our consumers, we are obsessed with bringing all steps of the creation process home to America. We’re fuelling design at the ground level of creativity in Brooklyn and reinventing manufacturing. This allows us to make products for the consumer, with the consumer, where he lives in real time, unleashing unparalleled creativity and endless opportunities for customisation in America.” 

The first Speedfactory was opened as a pilot plant in December 2015 in Ansbach, Germany. The factory was not only used to test this innovative production method but also to manufacture the first 500 pairs of shoes – which were unveiled to the public for the first time last September, successfully concluding the pilot phase in the process. Next year will see the launch of large-scale production, also in Ansbach. The building has already been erected – with the focus now on equipping it correspondingly. And there are big plans for this project in America as well, where the first Speedfactory site is expected to commence operations in the second half of 2017. The Atlanta-based plant will exceed 6,900 square metres. In the medium term, each of the Speedfactory facilities in Germany and the USA is scheduled to manufacture approximately 500,000 pairs of shoes. “Every day, our teams come together to bring speed to life, and with the adidas Speedfactory, we have a game changer in our hands. It enables us to combine speed in manufacturing with the flexibility to rethink conventional processes. Our goal is to give consumers what they want, when they want it,” pointed out adidas Group Executive Board Member Glenn Bennett, responsible for Global Operations. “This marks the beginning of a new era in the development of shoes – with even greater precision, unique design possibilities and superlative functionality. The products of tomorrow will look different to those available today.” He adds, “Speed is far more than a business strategy for us. Speed is all around us. It’s what athletes train for, and it’s essential to our consumers who live in a world of immediacy. With the first US-based Speedfactory, we’re combining some of the world’s best technology and manufacturing processes to give our consumers access to constant newness. This is another big step in our ambition to become the world’s first true fast sports brand.” 

In order to position itself as broadly as possible upon commencement of the Speedfactory activities, adidas has already set up a pilot plant with just under 300 square metres in Germany which will also begin large-scale production in the coming year. “As a sports company, we know that speed wins. That’s why we defined speed as one of the key choices of our strategic business plan ‘Creating the New’. We are revolutionising the industry. It’s a constantly changing world out there and our consumers always want the latest and newest product – and they want it now. That’s what adidas Speedfactory delivers, starting right here in Germany, with best-in-class German technology,” said Herbert Hainer, CEO of the adidas Group. “It combines the design and development of sporting goods with an automated, decentralised and flexible manufacturing process. This flexibility opens doors for us to be closer to the market and to where our consumer is. Ultimately, we are at the forefront of innovation in our industry by expanding the boundaries for how, where and when we can manufacture our industry-leading products.”

Gradually, the company will open similar facilities in various places throughout the world, all of which will be simultaneously linked to each other. This is designed to enable the exchange of information between the individual Speedfactory operations with regards to production, trends and product availability, among other things. A global network of automated production will deliver state-of-the-art technology to cities and towns across the world. The aim is to ultimately create a know-how platform to which everybody has access and which drives the future of product personalisation and customisation forward.

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Picture credits © adidas

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