Adidas’ speed factory experiment was a bold initiative to revolutionize the footwear supply chain. The idea was to transform shoe production with robots, 3D printing, and local manufacturing.
And the goal was to bring production closer to the consumer by drastically shortening lead times and enabling unprecedented customization. However, it fell short due to high costs and operational challenges.
So, what exactly prompted this experiment, and why did it fail? Continue reading to find out all about it.
The Story Behind the Adidas Speed Factory Experiment
Adidas wanted to reshape how shoes reach stores and customers. So the company sought to upend the traditional model of manufacturing shoes in bulk at distant Asian factories by creating hyper-local “micro-factories” that could respond rapidly to local market needs.
The issue of rising labor costs in Asia and long shipping times made the company rethink its entire supply chain. Launched in the mid-2010s, the Adidas Speedfactory experiment sought to bring production closer to consumers and cut delivery time from months to weeks.
The plan was to build high-tech factories in Germany and the U.S. These plants used robots, 3D printing, and digital design to make shoes faster. Adidas believed they could produce shoes customized for local tastes with fewer delays.
The Speedfactory was built on three promises:
- Speed: Make shoes from design to store in weeks.
- Customization: Tailor shoes to different cities, like New York or London.
- Local Production: Reduce shipping and make shoes near big markets.
According to one analyst, “the shoes in the Speedfactory were made entirely by robot,” highlighting that the manufacturing process was completely automated. By using robots instead of human workers, Adidas aimed to achieve new levels of precision and speed in shoe manufacturing.
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What Went Wrong With Adidas Speed Factory Experiment?
The supply chain innovation meant new machinery, such as 3D-printed parts, and robot arms working together. Adidas thought they could outsmart the slow, traditional factories in Asia.
Initially, the result was great. The company launched shoes like the AM4 series, sneakers designed for specific cities. Each shoe matched local runners’ needs, like quick turns in busy city streets. The Production time also dropped from 12 months to about 4 months.
However, the Speedfactory was not immune to supply chain challenges, only this time, they were very expensive problems. Adidas found that building shoes with robots wasn’t that simple. Each shoe needed many steps, like cutting, sewing, and bonding.
Changing a robot to make a different shoe design took time and money.
The experiment couldn’t scale. Adidas planned to make one million pairs per year, but that was less than half a percent of their total production. Ultimately, it became clear that the cost of running the Speedfactory, especially in high-wage countries, was too high.
Automation couldn’t beat Asia’s scale and efficiency.
In 2019, Adidas shut down both factories. They moved some technology to their Asian suppliers instead, where labor is cheaper and factories are more flexible.
Lessons from the Adidas Speed Factory Experiment
Adidas’ Speedfactory experiment teaches supply chains everywhere hard lessons about supply chain innovation, automation in manufacturing, and balancing cost with technology.
1. Innovation Must Fit the Budget
Building fancy robots doesn’t guarantee savings. Adidas learned the hard way that automation is costly to set up and run. The Speedfactory couldn’t make shoes cheaper than Asian plants, even with fewer workers. A lesson that costs matters even if automation is cool.
2. Keep Processes Simple
A shoe can take up to 80 steps to make. Adidas found that automating each step still meant a complex process. Changing from one shoe model to another needed reprogramming and tweaking robots, which took time and money.
The lesson here is that simplifying the product design can make automation more practical. More factories can start by picking simple products to automate, like plastic items or standardized garments, and then gradually scale from there.
3. Local Production Needs the Right Scale
Producing close to the customer is great for speed. And Adidas wanted to make shoes for New York in New York, which made sense on paper. But the Speedfactory’s output was too small to matter financially. It made less than 1% of Adidas’ total shoes.
Local production should focus on products with local demand that justifies the factory size. Think fresh food packaging or small-batch apparel.
4. Pilot First, Then Expand
Adidas built two big Speedfactories simultaneously, and the company’s problems multiplied.
Robots didn’t work for every shoe style. If Adidas had started smaller, maybe with a test line in an existing factory, they could have learned and fixed issues before spending so much on expansion.
More manufacturers and supply chains looking to adopt technology or automation should consider pilot projects to test new tech without risking too much money.
5. Combine New Tech with Old Skills
Speedfactory was high-tech, but Adidas forgot how valuable skilled workers can be. Humans can switch tasks faster than robots, which is why a hybrid model, machines for boring jobs and humans for tricky ones, works better.
Always combine new machinery with local labor to get the best mix of cost and speed.
Read more: Lessons from the Ford and Firestone supplier collapse.
Applying These Lessons to African Supply Chains
Africa’s supply chains face unique challenges: high costs in some areas, low skills in others, and a growing need to serve local markets fast. The Adidas Speedfactory failure shows the risks and rewards of innovation, which is why getting it right is so critical.
Here’s how African business leaders can apply these lessons:
1. Start Small
Don’t build a mega-factory with full automation from day one. Start with a small line or pilot project. Test the automation process for simple tasks like packing. Prove it works before expanding.
2. Simplify the Product
Products with fewer parts or simpler designs are easier to automate. Adidas tried to automate complex shoes, which is part of the reason it failed. African factories can start with simpler items, like plastic components, furniture, or straightforward clothing lines.
3. Use Local Advantages
Labor costs in Africa are often lower than in Europe or the U.S. Combining that with targeted automation, like machines for sewing or cutting, can improve productivity without losing jobs.
4. Focus on the Right Products
Local production works best for products with local demand. Shoes might be tough due to many steps. But items like fresh food, packaging, and some textiles can benefit from quick, local manufacturing.
5. Build Partnerships for Skills and Tech
Adidas worked with companies like Carbon for 3D printing. African firms can partner with universities, tech suppliers, and logistics experts to get the knowledge needed for new technology.
6. Use Data to Decide
Robots and automation can transform the entire supply chain process, but the cost only makes sense when there’s clear demand. African supply chains should use sales data to know what’s popular and make those products first. This avoids waste and overproduction.
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Wrap Up
The Adidas Speedfactory experiment aimed to bring speed, customization, and local production to shoe manufacturing. However, it failed to scale because of high costs and complex processes. Nevertheless, there are valuable lessons.
African supply chains can learn to innovate carefully, combine tech with human skills, and focus on products that justify local production. Supply chain innovation is hard, but with the right approach, you can build supply chains that are both efficient and ready for the future.
Obinabo Tochukwu Tabansi is a supply chain digital writer & ghostwriter helping professionals and business owners across Africa explore various strategies that work and learn from the success and failures of various supply chains across the globe. He also ghostwrites social content for logistics & supply chain businesses
