Faced with a fast-changing landscape, shoe companies are stepping up efforts to advance overall production efficiency in their China-based factories and reduce the level of handwork required to make merchandise. But it remains to be seen whether these efforts will successfully combat the impact of soaring labor costs and the migration of manufacturing to alternative regions over the long term.
Firms including Nike Inc., Under Armour Inc. and VF Corp., among others, are transforming their systems as they seek to transition from a labor-intensive process to one that is more automated. In addition, companies are improving production efficiencies — while addressing the Chinese government’s recent crackdown on pollution — with sustainable technologies, stitchless designs and waterless dyeing processes.
“In terms of technology, our focus at the moment is to introduce new machines [and processes] that can increase automation, reduce waste and ensure consistent quality,” said Stephen Chi, CEO of Stella International’s women’s footwear and retail divisions. Chi said the firm has employed management consultants to help it pinpoint ways to upgrade factory operations and continue to offer the innovation, craftsmanship, flexibility and short lead times demanded by its customers.
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Although the move to fully automated production may be a long way off, this current push to build new factories and adopt better technologies presents an opportunity to improve manufacturing processes and raise standards, according to Cyan Cooper, managing director of Pioneer Sourcing, a footwear manufacturing agency based in Fujian, China.
Still, while the industry is striving to reduce some of the labor in footwear production, the need for a skilled workforce remains — at least for now, Cooper said.
“There’s a reason why shoes are still made in Asia: You still have to do it by hand. There are innovations in the development and assembly portions, but conventional footwear as we know it will remain heavily dependent on labor for years to come.”
Added Matt Priest, president of the Footwear Distributors and Retailers of America, “It’s not quite lasers cutting fabric and robots sewing thread just yet.”
Nevertheless, the heat is on for footwear and apparel players to lead the charge for innovation. Here, Footwear News takes a closer look at the groundbreaking ways brands are making shoe manufacturing smarter, faster and leaner.
Lean & Mean
One key innovation impacting the production process has been the implementation of lean manufacturing, now an industry standard.
Lean, first pioneered by the automotive industry in the 1930s, aims to create more value for customers with fewer resources and less waste. Wolverine World Wide Inc. and Deckers Outdoor Corp. are among the many companies that have adopted this model to ensure more efficient factory environments and supply-chain operations. “It seems common sense, and that’s because it is,” said Mark Fegley, VP of supply chain for Deckers. “Being more efficient helps us introduce new materials, like Ugg Pure, [a natural wool woven into the linings and footbeds of Ugg Australia footwear].”
Fegley said Deckers teaches its factory owners lean concepts and will continue to do so as the company expands production in Latin American countries such as El Salvador. He cited lower tariffs, faster response times and more expedient consumer deliveries as key drivers behind the company’s decision to diversify its manufacturing operations globally.
Mike Jeppesen, Wolverine’s president of global operations, said his company is making progress in adapting to the new manufacturing landscape. “We are helping factories and their workers take waste and downtime out of the equation on the production lines. We’re also working on technologies such as auto-stitching, where we use computerized machines to reduce the number of people working on the process.”
He added that Wolverine is looking at its design functions to find ways to reduce the labor content required in the production of its shoes.
In their quest to add more automation into the production process, brands are increasingly innovating with shoes that are stitchless and lightweight.
“If you’re able to strip that away, you’re able to lower labor costs, which is the name of the game,” said Laurent Vasilescu, an analyst for global investment bank Macquarie, who covers brands including Under Armour, Nike, The North Face and Timberland.
Nike, in particular, has led the way with lightweight innovations, beginning in 2005 with the introduction of its Free sneaker series. Most recently, the athletic giant debuted its sock-like Flyknit technology, which eliminates the stitching of the shoe’s upper to the sole, reducing the number of workers needed on the production line and helping factories to cut costs.
In January, Under Armour launched its lightweight Speedform Apollo running shoe, with upper and midsole perforations for breathability, as well as ultrasonic seams and silicone grips on the soles for support.
The North Face has its Ultra Airmesh technology, designed to protect from dust and debris, while Wolverine has created its No-Sew technology, where upper components of shoes are produced without stitching.
Companies also are experimenting with new digital technologies. Wolverine, New Balance and Hi-Tec all utilize three-dimensional printing to reduce the need for hand-stitched overlay constructions. “Processes like 3-D modeling and printing show interesting potential and are likely to introduce new areas of change,” said Sharon Jones, SVP of sourcing and logistics for H.H. Brown. “These processes speed up the product development process, allow for less sampling and can prove to be more cost-effective.”
Priest said the digitalization of manufacturing processes in China will continue to gain pace in the coming years. “Some of the smartest minds lead the industry, and their teams are constantly striving to make the work process smoother, shortening the supply chain, as well as the time between the order placement and the footwear actually [reaching] the customer.”
A Sustainable Footprint
With the push for a more technologically efficient future in China comes a sharper focus on sustainability.
“For many years, the enforcement of environmental standards had not been as strong as it should be. The recent environmental clampdown [by the Chinese government] will have an impact,” Priest said. “As companies build new factories, it’s kind of a fresh start, so standards rise.”
When it comes to sustainable manufacturing practices, Timberland has long been a trailblazer. According to the company’s most recent social responsibility report from 2012, its footwear was composed of 77 percent recycled materials, a figure that nearly tripled from 2008, highlighting the shift toward total environmental consciousness. Over the years, Timberland has created a variety of products specifically designed with sustainability in mind, including its water-repellant Radler Trail Camp foldable hiking shoes and its Earthkeeper boot series.
Another sustainable initiative being explored by footwear brands looking to reduce handwork is waterless dyeing, a process that utilizes recyclable CO2 in place of water. This method reduces energy usage and eliminates the need for chemicals. It also provides a solution to the severe water shortage in China that has forced some companies to relocate their factories.
“A lot of footwear and apparel manufacturing is anchored by the fact that it has to be next to a river and basically along the coastlines of China,” Vasilescu explained. “If you’re able to remove that water process, you can actually move production more inland.”
Nike announced plans last year to collaborate with DyeCoo and Far Eastern New Century Corp. at a Taiwanese factory to create the waterless ColorDry technology. According to a DyeCoo report, ColorDry produces brighter colors while shortening the dyeing time by 40 percent and reducing overall energy use by 60 percent. The first Nike ColorDry products are slated to hit retail this year.
Adidas utilizes low-waste initiatives such as Formotion, a free-moving heel system that is separated from the sole and allows sneakers to adapt to an individual’s running gait for a smoother ride. The environmental benefits of Formotion shoes include the use of less glue, which means fewer toxic emissions and half the amount of normal material waste. Adidas has set a goal of shrinking its environmental footprint by 15 percent by 2015.