Adidas "Speedfactory"

I, ROBOT: Following the introduction of 3-D printed soles from recycled ocean plastic, Adidas has unveiled its first Speedfactory for a greener and faster manufacturing process.

The new facility uses automated, intelligent robotic technology, which is slated to speed up production and have a positive impact on the environment as it cuts down on shipping emissions while reducing the use of adhesives.

The group said the first concept shoes comprising 500 pairs of running footwear would be revealed in the first half of 2016, with large-scale commercial production set to launch in the near future.

This will allow each consumer to “locally get what they want, when they want it, [and] faster than ever,” explained Gerd Manz, vice president of technology and innovation at Adidas.
Herbert Hainer, the group’s chief executive officer, added that Speedfactory’s “automated, decentralized and flexible manufacturing process opens doors for us to be much closer to the market and to where our consumer is.”

Set up in Ansbach, Germany, a small town about 45 minutes away from the Adidas group headquarters in Herzogenaurach, the pilot plant jibes well with Adidas’ desire to provide unique design, in-store customization and interactive digital technology.

The reorganization comes at a point when Adidas is pressured by macroeconomic headwinds. The group, which sources products from more than 30 different countries, is up against double-digit increases in labor costs in emerging markets, higher costs for cotton, nylon and EVA as well as currency volatility.

Sourcing costs are expected to rise “significantly” over the next five years, it said on Wednesday. This and the exchange rates are to weigh on the group’s gross margin in 2016, pushing it down by 50 and 100 basis points compared to the 2015 level.

Operating margin, meanwhile, is projected to “at least remain stable” in 2016 compared to 2015. In absolute terms, operating profit is forecasted to improve at a high single-digit rate.

The group said it would be able to partly offset pressures by greater supply chain efficiencies, price increases in several regions, over-proportionate growth in higher-margin markets as well as a more favorable category, product and channel mix, while remaining committed to higher marketing spending, which currently stands at between 13 percent and 14 percent of sales.

Hainer further confirmed that he is to remain chief executive officer of Adidas AG until his contract expires in 2017 – “to give the board time to find the best candidate for my succession,” he explained.

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