Lessons from Adidas Speedfactory Closures

You probably already have heard about Adidas Speedfactory closures. You can read more about it here:

Adidas getting rid of Speedfactories

This is exactly why I consistently say automation and AI are not about- “We need to do it since its the new shiny thing or we need to do it because everyone else is doing it.” In my personal opinion, Adidas could have patiently used couple of years to evaluate how the automated factory fit in their manufacturing and Supply Chain network strategy, mid and long term.

It is surprising that they find after 4 years that Asia is more cost effective and the supplier base is there..that is still a universal truth. You can do total landed cost analysis using a simple clerical calculator these days. Seems like a rushed, decision at that time that they started lamenting now. It should all start with a WHY and then you drill down further and get all the answers to questions that align like (examples) :

  • Which products to manufacture in automated setups, why and where so that it integrates in the manufacturing network and strategy ?
  • Impact on end to end Supply chain (current) and alignment with mid and long term SupplyChain strategy ( Responsiveness, efficiency, resiliency etc.)
  • Dedicated or Flexi manufacturing ?
  • Raw to finished goods or raw to semi and semi to raw ?
  • What tech platforms for automation with future aspects in mind?

Even the closures seems rushed. Was holding Inventory from supplier base in Asia costlier than winding down?  Could they have converted these non Asia speedfactories into semi finished to finished, while Asia factories manufactured raw material to finished, and then synchronized these two Supply Chains ?

They probably evaluated all these options and there is something more than what meets the eye (not being shared as public info). But the key lessons here are:

  • Take time to evaluate emerging technologies and trends, even when they are near maturity
  • Take time to plan implementation so that you can tailor it around your current model, mid and long term company strategy, Industry trends etc.
  • Think about how this initial automation will serve you 5-10 years from now, not how it will serve me currently.

 

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Views my own.

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