Quote of the day

“I find economics increasingly satisfactory, and I think I am rather good at it.”– John Maynard Keynes

Wednesday 25 May 2016

Re-shoring & robots - great example:

Very useful context on rising cost of production in Asia - highly relevant for next stage of economic development, and progress of globalisation:


Reboot: Adidas to make shoes in Germany again – but using robots

Company unveils new factory in Germany that will use machines to make shoes instead of humans in Asia  Wednesday

More than 20 years after Adidas ceased production activities in Germany and moved them to Asia, chief executive Herbert Hainer unveiled to the press the group’s new prototype “Speedfactory” in Ansbach, southern Germany.
The 4,600-square-metre plant is still being built but Adidas opened it to the press, pledging to automate shoe production – which is currently done mostly by hand in Asia – and enable the shoes to be made more quickly and closer to its sales outlets.


The factory will deliver a first test set of around 500 pairs of shoes from the third quarter of 2016.


Large-scale production will begin in 2017 and Adidas was planning a second “Speed Factory” in the United States in the same year, said Hainer.


Hainer insisted the factories would not immediately replace the work of sub-contractors in Asia. “Our goal is not full automatisation,” said Gerd Manz, head of innovation and technology.


Adidas produced 301m pairs of shoes in 2015 and needs to produce 30m more each year to reach its growth targets by 2020.
If robots are the future of work, where do humans fit in? Six subcontractors of Adidas in China declined to comment on the new factories or said they were not aware of them.


In the longer term Adidas is planning to build robot-operated factories in Britain or in France, and could even produce the shirts of Germany’s national football team in its home country, said Hainer.


The shoes made in Germany would sell at a similar price to those produced in Asia, he said.
Adidas is facing rising production costs in Asia where it employs around one million workers. Arch-rival Nike is also developing its robot-operated factory.

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