Marie Wiere's Blue Sky Management Blog

Nike’s new lightweight running shoe the Flyknit exemplifies a new cost efficient manufacturing process, which could shake up the shoe industry.

The process

The Flyknit is made by computer-controlled technology, which knits the upper part of the shoe ready to attach to the sole. This process which Nike call “micro-level precision engineering” eliminates the labor-intensive process of workers assembling numerous machine cut pieces. The technology also enables detailed design aesthetic and fit adjustments to be easily made. In addition the process is more efficient, cutting production time and enhancing profitability. It’s also sustainable with wasted materials weighing in at 1/100^th of a pound (about as much as a sheet of paper).

What this means…

The labor-intensive nature of shoe making previously led to the process being outsourced to countries with cheap labor. By eliminating or significantly reducing the labor-intensive part of the process, the shoes will no longer have to be made in countries with cheap labor. As Nike president Charlie Denson acknowledged in this week’s Bloomberg Business Week:

“This is a complete game-changer, the process cuts costs so much that eventually we could make these shoes anywhere in the world.”

Thus if this process lives up to expectations Nike could do some of their shoe manufacturing here in the U.S. Though operating and labor costs would be higher here relative to Nike’s factories in China, Indonesia and Vietnam, shipping costs would be lower. Another benefit, which would help offset costs, is faster market response time allowing greater flexibility to changes in demand in the american market.

In the long run this flexible technology could result in customers being able to purchase shoes customized to fit their feet through use of a foot scanner. What I liked about this technology is that further down the line it should also offer customers the ability to design their own shoe down to a single thread.

All in all I think it will be interesting to see if this new technology lives up to its expectations.

But what do you think? Share your thoughts in the comments section below.