Introduction: Adidas Futurecraft 4D
Until recent years, the concept of additive manufacturing has largely been associated with prototyping and low-volume production. Rapid advances in research and development have moved forward the technology, and as additive manufacturing methods become cheaper and faster, 3D-printed parts are becoming more ingrained in retail and consumer goods.
In footwear, Adidas is one such organization at the forefront of this evolution. Last year, Adidas announced the introduction of its Futurecraft 4D shoe – a sneaker that uses a midsole formed with 3D-printed material. The Futurecraft midsole is a lattice structure created from liquid resins hardened by “digital light synthesis” technology. The sneakers are currently priced at $300, placing the shoes as a more premium product among Adidas offerings.
Adidas’s Additive Manufacturing Strategy
For Adidas, a shift towards additive manufacturing translates to reduced production costs throughout the supply chain. In manufacturing, reduced costs come from eliminating expensive steel-molds used in traditional sneaker production. On the distribution side, additive manufacturing allows for a more localized approach to delivery – Adidas currently manufactures most of its shoes in Asia, whereas its Futurecraft 4D line can be produced closer to point of use due to the comparatively lower fixed costs of production for 3D-printing. Bringing production closer to point of use means that Adidas can cut down delivery times and shipping costs for its consumers.
Additive manufacturing also shortens up the production development cycle of Adidas products. Compared to the 15-18 months it takes from ideation to store sales in normal factory production of sneakers, it took just 11 months for the Futurecraft 4D release earlier this year. Product introduction cycles can further be shortened to 2 months as capabilities continue to develop. In a highly diversified market, shorter product lifecycles allow Adidas to maintain lower inventory levels, rapidly iterate, and effectively stay ahead of consumer trends.
In the short term, Adidas plans to scale up its bandwidth to produce Futurecraft 4D sneakers at higher volumes. Demand has vastly outpaced production, and the limited release versions of the sneakers have appeared on resale markets at almost $3,000 per pair. To meet demand requirements, Adidas has secured enough 3D-printing capacity to produce one million sneakers per year, a drastic increase over the most recent annual production release of 5,000 shoes. In the meantime, Adidas is continuing to offer multiple small-scale product releases each year.
For the long term, Adidas plans to use 3D-printing solutions to generate customized Futurecraft sneakers based on individual physiological and performance needs . The shoe will have a different geometry and lattice structure based on each athlete’s build, foot structure, and use of the shoe. The personalized shoe would then be manufactured at local “micro-factories” to allow for shorter delivery times .
With recent investments into manufacturing capacity, Adidas should hold off on introducing Futurecraft shoes to the mass market until due diligence in testing the product is fully completed. As mass customization creates room for error, producing a high-quality product and maintaining credibility is especially essential when competitors like Nike are developing their own 3D-printed offerings . Updates to the software used in the additive manufacturing process can be rolled out without compromising investments on the hardware side. In other words, Adidas can continue building up the capacity to produce while tweaking the design and formula of the lattice structure. Adidas already has an early-mover advantage by building brand awareness through limited releases of the product – the company just needs to make sure to prove out large-scale manufacturing capabilities, especially regarding customization, before a larger release.
Moving forward, Adidas should also consider creating the “upper” (or top) part of the sneakers through additive manufacturing. As the shoe is currently designed with only the midsole part of the shoe being 3D-printed, the product is still somewhat constrained since manufacturing the rest of the shoe occurs via a different production process. Having a consolidated manufacturing platform would allow for more customization and localized production. Customizing the “upper” would allow Adidas to catch up with Nike, who already produces a shoe with a 3D-printed upper portion.
With rivals like Nike developing their own customizable 3D-printed offerings, how will Adidas keep a competitive edge? With lower costs of production, the development of additive manufacturing technology arguably creates a more crowded competitive landscape in footwear. How will established retailers compete with emerging players?
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