Nike Gears Up for a 'Manufacturing Revolution'

In the midst of rising labour and logistical costs and the speed of innovation across all manufacturing fields, sporting goods behemoth Nike has set out a raft of measures in what it terms a ‘manufacturing revolution’.

The supply, or value chain has already witnessed streamlining of around 15 percent over the last two years by cutting factories used from 910 to 785, though despite this production and sales is improving.

But rather than continue this promising trend at the same pace, the company is ramping up its efforts to reduce waste and use what it has more effectively, generating yet more profitable growth at the same time.

Nike’s Sustainable Business Performance Summer for the 2013 financial year outlines this refreshed mantra, and indicates that workers are a key source of innovation and improvement. The report states Nike’s intention to become a catalyst for positive change across the whole industry.

Three major pillars underline the new revolutionary approach. First is ‘manufacturing excellence’, which involves waste reduction and more efficient use of water. ‘Manufacturing innovation’ focuses on entirely new ways of making products and ‘manufacturing modernisation’ looks at the value added process, making it more effective through things like automated cutting.

What this means for workers is a shift to those with higher skills and able to adopt newer techniques with more complex tools.

The sportswear giant is now demanding a commitment to lean principles from all of its source factories, with an eventual goal of using companies achieving bronze or higher in its own Sourcing and Manufacturing Sustainability Index (SMSI).

Two pilot studies in Indonesia have already shown positive results, with Nike looking to roll this out. 

See the infographic below to find out more about Nike's SMSI.