Shoes have been around for a long time and the basic manufacturing technique is pretty much fixed. Pieces of material — whether leather, cotton, or whatever — are cut out and sewn together form the upper body of the shoe and that upper is then attached to a sole. All pretty straightforward, but that may be about to change, at least for fancy running shoes (Is Nike’s Flyknit the Swoosh of the Future?, BusinessWeek, Mar 15).
The shoe in question is Nike’s Flyknit, an ultra-lightweight running shoe that is meant to feel like wearing a sock. To make it feel like a sock, they knit the upper like it was a sock — except it’s a real high-tech sock.
In a process Nike calls “micro-level precision engineering,” proprietary software instructs the machine to minutely alter a shoe’s stability and aesthetics. If the toe needs more stretch, the design can be digitally altered instantly to add Lycra-infused thread. For added strength in the heel, the software uses multiple layers of yarn of varying thickness. Nike plans to patent the process.
Because the upper is made in one piece, the Flyknit has 35 fewer pieces to assemble than the popular Air Pegasus+ 28 runner. That makes production quicker with less labor and larger profit margins, Parker says, though the company won’t give precise figures for either. The Flyknit process also fits into Nike’s sustainability push because the amount of material wasted manufacturing each pair weighs only as much as a sheet of paper, or about one-100th of a pound. Nike says the Flyknit produces 66 percent less waste than the Air Pegasus+ 28.
The process reduces fabricating the components of the upper into making just two pieces — basically the tongue and everything else.
That greatly reduces the amount of labor required to assemble the shoe and calls into question just where these shoes should be made. That’s right: Knitting would have supply chain implications.
Let that sink in for a moment.
Nike makes 96 percent of its shoes in Vietnam, China, and Indonesia, where labor costs are low. The downside is the time it takes for shoes to reach markets such as the U.S., says SportsOneSource analyst Matt Powell. “One of the critical issues our industry hasn’t figured out is how to get products to market more quickly,” he says. “The biggest time in the life cycle of getting a shoe to the U.S. is the time it spends on a boat coming from Asia. If you could eliminate that, that’s a huge chunk out of the time line.”
The article reports that manufacturing the shoes domestically would still cost more but less inventory, quicker response, and (presumably) more full price sales could go a long way to offsetting those costs. The article also suggests that local production and the process itself could allow for much more customization of shoes — either in terms of fit or in colors.
This a neat example of how process innovation can open up a myriad of possibilities for how to run the supply chain. Nike is certainly in a position to exploit this technology with both the marketing muscle and retail network to make it happen. One thing is clear though. This will not be a real re-birth of the US shoe industry, at least in terms of employment. Even if Nike deploys this technology in a wide range of products, the number of jobs it will create is small. Indeed, the need for minimal labor is the whole reason one could think of making these sneakers here.