But in the longer term, Adidas could benefit from the lower cost of robot-driven factories, which has implications for manufacturing overall. If robots can consistently make things faster and more cheaply, the advantage of using low-cost labor in emerging markets like China and Brazil potentially disappears. Companies could start building factories closer to home or in more developed markets like the U.S., where there’s a higher quotient of workers who could build and maintain robot factories.
Due to worker shortages and rising wages in China, Adidas isn’t the only company moving parts of its manufacturing operation closer to major markets. Last year, Ford brought about 3,200 manufacturing jobs back to the United States, and Nike announced a partnership with Flex, a high-tech manufacturing firm, to bring automation and customization into its supply chain, too, although no timeline has been announced.
After Adidas opens its second robot-staffed manufacturing operation in Atlanta in 2017, the number of robot-built shoes is set to increase. The company projects the new Atlanta factory will produce 50,000 pairs of shoes in the second half of next year. Still, that figure doesn’t even account for half of 1 percent of its supply.
In a couple of years, Adidas says, its robot-staffed plants will produce a million pairs annually, if all goes to plan. The Atlanta factory is expected create 160 new (human) jobs when it opens.
The idea with robot factories is to make fully customized shoes on demand at remarkably faster speeds with the help of robots. In Adidas’s current factories, it can take weeks to complete a pair of sneakers. By automating the majority of the manufacturing process, Adidas can make a pair of shoes in about five hours.
More than 70 percent of Adidas’ sales comes from products less than one year old. Although this is only the beginning of the company’s robot shoemaking factories, the ability to make products on demand and as needed, as opposed to creating large stockpiles of inventory, could upend and decentralize current manufacturing processes.