How Technology is Shifting NIKE’s Manufacturing Back Home

Innovation and technology are becoming drivers of profitability, rather than cheap labour and materials.

347
13020
How Technology is Shifting NIKE’s Manufacturing Back Home, crowdink.com, crowdink.com.au, crowdink, crowd ink
How Technology is Shifting NIKE’s Manufacturing Back Home

Last month, NIKE announced a new strategic partnership with Apollo Global Management – what was the world’s leading sports apparel company doing with a global alternative asset manager best known for managing private equity and hedge funds?

Their joint press release stated that the partnership “will increase regional manufacturing capabilities, enable quicker delivery of more customized product to consumers, and drive investment in sustainability.”

The partnership has established a new supply chain company, which has already acquired two existing businesses – New Holland, an apparel manufacturer (with manufacturing facilities in Central America) and ArtFX, a warehousing and logistics operator.

So why in particular is NIKE doing this?

Manufacturing Comes Back to the U.S.

Manufacturing has been perceived as a low margin, labour intensive industry best outsourced to regions with cheap labour such as Asia. However, with labour costs rising in Asia and inefficiencies in the global supply chain, global apparel manufacturers are re-thinking the way they have done business for the last half a century.

They are questioning the established idea of centralised manufacturing and heading down a more localised route, which allows them to source raw materials in the same region, reduce shipping costs, and better serve local markets by being nimbler to fickle consumer tastes and refreshing product styles more often.

It also comes in an age where issues such as sustainability, waste reduction, workers’ rights, increasing local employment, and responsible sourcing are becoming increasingly important for socially conscious consumers.

The strategic partnership with Apollo intends to build up NIKE’s manufacturing infrastructure in the U.S. with a view to deliver a broader and more advanced product offering, including technical and customised apparel, and delivering it to customers in a speedier fashion. It intends to invest in new technology as well as additional textile and apparel suppliers in North and Latin America to “create a more vertically-integrated apparel ecosystem – from materials suppliers and apparel manufacturers”.

A significant amount of the investment in technology is expected to be in automating both the design and manufacturing process to increase efficiency and ultimately, reducing costs.

With almost half of NIKE’s sales still coming from North America, localising some production back into the region is not too surprising.

How Technology is Shifting NIKE’s Manufacturing Back Home, crowdink.com, crowdink.com.au, crowdink, crowd ink
How Technology is Shifting NIKE’s Manufacturing Back Home

NIKE is not alone in this trend of building a manufacturing base in the U.S. Adidas announced plans to open its first U.S. production plant in 2017 in Atlanta, which will also rely heavily on automation and production robots. Under Armour has also recently opened a new manufacturing facility, focusing on automation as well as product and process innovation such as 3D printing.

Logistics Is the Other Key in the Supply Chain

In recent years, NIKE has been criticised by some retailers of product delays due to logistical issues. This strategic partnership with Apollo is the latest step in addressing the increasing speed to market demanded by today’s consumers.

Of course, the strategic partnership is in its infancy and NIKE will continue to heavily rely on its existing manufacturing and logistics arrangements. However, it does point to a world now where innovation and technology are seen to be key drivers of profitability than simply cheap labour and materials.

Although NIKE has invested no upfront capital into the strategic partnership, time will tell whether any benefits will come to fruition and at the right cost to NIKE to make it a sustainable strategy.

One or more of AtlasTrend’s managed funds own NIKE shares.

SHARE
Previous article6 (Incredibly) Easy Canapés to Impress Your Friends
Next articleTaylor Swift Ends Steaming Boycott
AtlasTrend is a global equities fund manager that makes it easy for anyone to invest in the world’s most thriving trends. The team brings a wealth of investment insights and access to smart and hassle-free global investing through an engaging and fully transparent online investment platform. To gain more actionable investment insights from the AtlasTrend team on profitable world trends (such as the growth of online shopping or rise of big data) and the listed international companies benefitting from these trends, register today for a free trial here. (https://www.atlastrend.com/register/?group=CrowdINK)

347 COMMENTS

  1. Rates

    […]we like to honor several other net websites on the net, even though they aren?t linked to us, by linking to them. Under are some webpages really worth checking out[…]

  2. robert

    […]very couple of sites that come about to become in depth beneath, from our point of view are undoubtedly well really worth checking out[…]

  3. real estate school

    […]Wonderful story, reckoned we could combine a handful of unrelated data, nevertheless truly really worth taking a search, whoa did one particular study about Mid East has got additional problerms too […]

  4. glass lamp shades

    […]we like to honor a lot of other web websites around the net, even when they aren?t linked to us, by linking to them. Beneath are some webpages really worth checking out[…]

  5. Website

    […]just beneath, are numerous absolutely not associated web sites to ours, having said that, they’re certainly really worth going over[…]

  6. Sermon Series

    […]we like to honor quite a few other world-wide-web sites on the net, even though they aren?t linked to us, by linking to them. Below are some webpages worth checking out[…]

  7. Hotels

    […]Wonderful story, reckoned we could combine several unrelated information, nevertheless definitely really worth taking a look, whoa did 1 understand about Mid East has got extra problerms at the same time […]

  8. The Alps Residences

    The Alps Residences is a new and upcoming condo located in Tampines Ave 10. The Alps Residences Condo, a 99/103-year Leasehold Property. View quality listings, recent transactions, pricing information. For Sale – The Alps Residences (D18).

  9. singapore escot

    […]we like to honor several other net websites on the web, even if they aren?t linked to us, by linking to them. Beneath are some webpages really worth checking out[…]

  10. outdoor traditional sauna

    […]Wonderful story, reckoned we could combine a number of unrelated information, nevertheless really worth taking a appear, whoa did a single learn about Mid East has got more problerms as well […]

  11. Female Mumbai Escorts

    Mumbai Independent Escorts is high profile Female Mumbai Escorts, Get her contact no online and spend a Full night. Hire services of independent Escorts in Mumbai.The best thing about Mumbai Independent Escorts agency is that you get affordable escort…

  12. XBOX one s

    […]Wonderful story, reckoned we could combine a couple of unrelated data, nevertheless genuinely really worth taking a search, whoa did a single master about Mid East has got far more problerms also […]

  13. Yoga Perth

    […]although web-sites we backlink to below are considerably not related to ours, we feel they are essentially really worth a go by, so have a look[…]

  14. medspa

    […]that could be the finish of this report. Right here you?ll uncover some sites that we believe you?ll value, just click the hyperlinks over[…]

  15. factory to lease

    […]we prefer to honor several other world wide web web-sites around the internet, even when they aren?t linked to us, by linking to them. Underneath are some webpages really worth checking out[…]

  16. San Diego Security Guard

    […]we like to honor numerous other world-wide-web internet sites on the web, even though they aren?t linked to us, by linking to them. Beneath are some webpages really worth checking out[…]

  17. Food Reviews

    […]we prefer to honor numerous other web websites around the net, even when they aren’t linked to us, by linking to them. Below are some webpages worth checking out[…]

  18. games

    […]although internet websites we backlink to beneath are considerably not connected to ours, we feel they may be in fact really worth a go through, so have a look[…]

  19. scr888

    […]that may be the end of this post. Here you?ll come across some internet sites that we think you?ll enjoy, just click the hyperlinks over[…]

  20. cricbuzz live streaming

    […]Wonderful story, reckoned we could combine a couple of unrelated data, nonetheless definitely really worth taking a appear, whoa did a single find out about Mid East has got extra problerms also […]

  21. Disabilities

    […]we like to honor numerous other online sites on the internet, even if they aren?t linked to us, by linking to them. Under are some webpages worth checking out[…]

  22. Hardware Kickstarter

    […]although internet sites we backlink to beneath are considerably not associated to ours, we really feel they are essentially really worth a go by means of, so have a look[…]

  23. Add To Cart

    […]Wonderful story, reckoned we could combine a couple of unrelated information, nonetheless really worth taking a search, whoa did one master about Mid East has got much more problerms also […]

  24. pliers set

    […]we like to honor quite a few other internet web pages around the internet, even when they aren?t linked to us, by linking to them. Beneath are some webpages really worth checking out[…]

  25. Agen Casino Online

    […]we like to honor quite a few other online sites around the web, even though they aren?t linked to us, by linking to them. Under are some webpages worth checking out[…]

  26. ReMe UK

    […]Wonderful story, reckoned we could combine some unrelated data, nonetheless really worth taking a search, whoa did 1 find out about Mid East has got far more problerms at the same time […]

  27. Truck tire

    […]that could be the end of this article. Right here you will uncover some internet sites that we think you will appreciate, just click the hyperlinks over[…]

  28. kurta

    […]that would be the finish of this report. Right here you will find some web sites that we believe you will enjoy, just click the hyperlinks over[…]

  29. evolução espiritual

    […]Wonderful story, reckoned we could combine a handful of unrelated data, nonetheless actually worth taking a look, whoa did one particular discover about Mid East has got extra problerms too […]

  30. Architect

    The process of designing the exterior of the building. This includes facades, walls, door & window detailing, roof etc. Our 3D Renderings will help bring your project to life.

  31. cannabidiol cbd

    […]Wonderful story, reckoned we could combine several unrelated information, nevertheless really really worth taking a search, whoa did a single learn about Mid East has got additional problerms too […]

  32. Tempobet

    […]Wonderful story, reckoned we could combine a few unrelated data, nonetheless genuinely worth taking a look, whoa did a single master about Mid East has got extra problerms as well […]

  33. amazon

    […]that could be the finish of this article. Here you will obtain some web sites that we consider you will enjoy, just click the links over[…]

  34. pure foods

    […]Wonderful story, reckoned we could combine a couple of unrelated information, nonetheless seriously really worth taking a appear, whoa did one discover about Mid East has got more problerms as well […]

LEAVE A REPLY

Please enter your comment!
Please enter your name here