Customers expect quality when they pay their hard-earned money for goods of any kind. Many brands have faded into history because business owners did not recognize this one simple fact. Two brands that have stood the test of time, Adidas and Nike, are constantly enhancing their manufacturing process so that they are faster, smarter, and still provide clients with high-quality products at reasonable prices.
A Bit of History
Adidas started out as the Dassler Brothers Shoe Company in 1924. Since a split in 1949 that led to the name Adidas, the brand has become one of the most recognizable in the world. In addition to being a major supplier to sports teams, Adidas also operates over a thousand stores.
The company posted global sales exceeding $19 billion in 2014. With the aid of an ambitious 2020 growth plan, the company is poised to increase sales by 15 percent for every year between 2015 and 2020.
Nike is a bit younger of a company. Founded as Blue Ribbon Sports in 1964, the company name officially became Nike in 1971. Based in the United States, Nike has offices in 45 nations and operates a line of stores. Their products are also sold in a number of other retail outlets.
Nike is committed to reaching global annual sales of $50 billion by the year 2020. The brand itself is considered to be one of the most valuable in the sportswear industry.
Making it Faster Without Compromising Quality
Continued growth is not just about producing more products. It is also about maintaining and enhancing quality. Both Nike and Adidas have their own approaches to keep them on top.
Adidas is introducing robotic technology as a way to streamline the manufacturing process and increase production. Starting with a plant in Ansbach, Germany, the fully automated facility will be monitored closely to ensure every item produced meets the standards set by the company.
Gerd Manz, the Vice President of Technology at Adidas, sees the move as the start of something that will transform the industry.
“We’re going to run that marathon really fast, but our vision is we want to have a decentralized, flexible manufacturing network that can react locally to consumer demands […] We started looking into this quite a while ago and we’ve moved away from looking only at product innovation, which is traditionally the case in our industry. We’ve been trying to look more at innovation in experience as well, trying to start higher up the value stream,” said Manz.
If successful, the technology will make it easier for the company to anticipate customer demand and be ready to meet it.
Over at Nike, the focus has been on updating and automating plants for some time. The company has also partnered with Flex, a supply chain expert, as a way of sharing resources and streamlining the production process. As with Adidas, the aim is to know what customers want before they ask for it, have the inventory on hand to meet the demand, and deliver the goods to clients without any type of delay.
The Chief Operating Officer of Nike, Eric Sprunk, sees the partnership as an excellent way to harness resources and be more competitive in the marketplace.
“Flex’s proven expertise in design, engineering, and manufacturing in industries like automotive, medical, and consumer electronics make them a perfect partner to help us revolutionize footwear manufacturing, Together, the future of personalized, rapidly-delivered product that is made more efficiently and with less waste is well underway.”
Who Wins? The Customer.
While Nike and Adidas are using strategies that are similar in some ways, their different approaches do promise advantages for those who matter most: the customers. Not content with maintaining their client bases, both companies are building on their existing platforms and updating operations so they can reach even more buyers.
Along the way, these two giants will compete for some of the same business. For the customer, that means the opportunity to access greater variety, enjoy quicker delivery, and maybe even command better pricing for high-volume orders.
For the two companies, investing in new technology and forming new partnerships will ultimately strengthen their operations. It does mean a significant outlay of cash on the front end. If their projections are accurate, it will only be a matter of a few years before the investment is recouped and the resulting net profit will ensure the long-term sustainability of each operation.
Information sourced from Fortune, Adidas, Apparel, and Fast Co.