Adidas AG plans to idle experimental “speed factories” in the U.S. and Germany, redeploying techniques developed there to suppliers in Asia, where the vast majority of its products are already made.
The decision is a setback for anyone who hoped that projects like the speed factories represented the dawn of a new era of manufacturing in Europe and North America. The facilities were pitched as a way for Adidas to profitably produce footwear in high-cost, developed economies.
The move reflects Adidas’s need to bridge the often conflicting goals of catering to customers’ changing whims ever faster while holding down production costs. Outsourcing the next-generation techniques it developed for the factories, including enhanced 3-D printing, is sensible for a company that makes only a tiny fraction of its own products, Cedric Rossi, an analyst at Bryan Garnier, said by phone.
“They developed expertise and will now teach suppliers how to use it,” Rossi said.
The German sports company plans to expand its offering of footwear that’s designed and sold within weeks -- rather than needing months or years -- beyond just the specialty sneakers that have been made at the speed factories in Atlanta and Ansbach, Germany, according to a statement.
The Ansbach facility, which is as large as half a soccer field, has needed only about 160 people to make 1,500 pairs of shoes a day, or 500,000 annually. The highly automated process has largely replaced manual stitching and gluing with molding and bonding done by machines, making running shoes in a day compared with the two or three months needed in China and Vietnam, where components are typically shuttled among suppliers that produce individual parts.
Adidas is still studying other projects for making products in Europe and North America, including inside company stores, if the manufacturing process can be simplified further.
German company Oechsler AG, which operated the speed factories, said it understood Adidas’s move but regretted it. “We have gained extremely valuable insights which have already been and will continue to be incorporated into the production of other Oechsler Group divisions,“ the company said in the statement.
Adidas’s decision also comes against a backdrop of rising global tensions affecting the footwear industry, which does much of its production in Asia. In May, Adidas signed an open letter to President Donald Trump warning of the risks of tariffs between the U.S. and China. That document said new levies on shoes made in China would be “catastrophic for our consumers, our companies and the American economy as a whole.”
Later, Adidas Chief Executive Officer Kasper Rorsted said the company hasn’t been affected significantly by the tariffs, since very few of its products get made in China and sent to the U.S.