A look at how the recently-announced Flex partnership will ... · By 1964, Bowerman and Knight...

2/25/2016 INTELLIGENCE: Recoding the Run

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A look at how the recently-announced Flex partnership will advance Nike's Manufacturing Revolution.

Here’s one thing about lasers: They can cut almost anything. They can navigate an elaborate

preprogrammed map of twists and turns, following a “digital recipe” down to the micron. And in doing so,

they have radically optimized manufacturing.

It follows that Nike would take interest in such a technology. As part of its Manufacturing Revolution

initiative, the company is constantly looking for ways to reduce the amount of material and labor needed to

make highperformance, customized footwear and speed the delivery of its products to all kinds of athletes.

Lasercutting could scale down the amount of equipment needed to create the 20 to 30 parts of a typical

shoe. Currently, if a shoe comes in 10 sizes, the standard production involves a multitude of various tools for

crafting at least 200 different pieces for each shoe.

But here’s another thing about lasers: As they cut, the beams mix with oxygen to leave burnt edges on soft

fabrics. And Nike works with a lot with soft fabrics. “The team at Nike said, ‘No, you can’t do that. It doesn’t

work. We tried it,’” says Mike Dennison, president of the Consumer Technologies Group at Flex, “and then

they’d come in and see us making it work, and they were just blown away.”

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British Heptathlete Katarina JohnsonThompson; All artwork: Samuel Burgess Johnson

Engineers and chemists at Flex, a supply chain innovator specializing in manufacturing and computer

hardware, invented a process whereby any material, soft or hard, can be neatly lasercut into whatever

pattern is needed, when it’s needed, right on the factory floor. “We are perfecting a process that allows

precision cutting without any burning of the material in the process,” says Tom Fletcher, SVP of the

Consumer Technologies Group at Flex. “We needed to develop a lasercutting system that allows us to

create a very flexible capability that can really perform across the range of materials and products required

for this type of industry.”

Dennison thinks it’s only a matter of time before lasercutting replaces manual cutting in mainstream

manufacturing. “It’s like Paul Bunyan and the chainsaw, right?” he says. “At some point the chainsaw will

win, and that’s the laser cutter.”

Beyond the lasers themselves, Flex has developed a new way to get cloth to the cutting machines. In the

past, bolts of fabric had to be moved, unfurled, cut up, then pulled off the factory line and moved elsewhere.

Flex’s alternative: a roboticized bolt holder that automatically feeds the line based on a specific shoe model

and size.

Typically, a factory will do a big run of one shoe size at a time. But, in addition to the cutting itself, using

laser cutters allows for much greater flexibility. “Instead of having all the materials stored in a back

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warehouse and having a team of people use big hydraulic presses and tools that cut out pattern pieces for

footwear, they roll out this big laser cutter, they put the material in it, and they cut the material for the size

9, and then for the size 14, and then for the size 13, and it’s all digital,” says Eric Sprunk, chief operating

officer at Nike. “You don’t have to change a die [cutter]; it’s just a laser. It’s great; it’s going to be a huge

game changer.”

The laser and bolt holder are just two of several innovations that Flex has developed in conjunction with

Nike. Because it doesn’t have a background in footwear, Flex designated a team that would learn in great

detail what went into making a shoe and begin experimenting with techniques that could improve quality.

“We went on Nike.com and ordered about 50 different pairs of shoes with the intention of literally taking

them apart and seeing how they were made,” Fletcher says. “I even got a call from Beaverton, Oregon, from

Nike.com, asking, ‘Mr. Fletcher, do you actually want to order 50 different pairs of shoes?’ And I said, ‘As a

matter of fact, I do.’”



Following in the Footsteps of an Innovator

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In ripping the shoes apart, Flex was actually retracing the path of Nike Cofounder Bill Bowerman, the

veteran trackandfield coach who began his quest to build a lighter, more comfortable athletic shoe in the

late 1950s by deconstructing existing ones with a band saw, then scrutinizing their anatomy. By shaving

ounces off runners’ shoes, he could shave seconds off their time.

The coach’s obsession with making performanceenhancing shoes to help athletes perform at their best led

him to cobble many prototypes by hand, including a pair for Phil Knight, then a student trackandfield

athlete at the University of Oregon. Knight wasn’t wearing the shoes for long before his teammate Otis

Davis appropriated them. Davis later won a gold medal in the 400 meters at the 1960 Olympic Games.

Bowerman continued to customize shoes for his runners. He’d begin by outlining their feet, measuring their

widths, and jotting down anatomical peculiarities (a long heel, say, or slim ankle). He’d test dozens of

different materials in search of the perfect strong, lightweight, and flexible substance. As he approached his

own exacting standards, he sought a partnership with a U.S. footwear manufacturer, but there were no

takers. In a 1960 letter to a Portland, Oregon, company requesting steel for spikes, Bowerman wrote, “I

don’t think there is any question, certainly in my own mind there is not, that I now have the best shoe in

the world—if I could just find some good American shoemaker to make it.”

By 1964, Bowerman and Knight teamed up to found Blue Ribbon Sports, a footwear company using athlete

insights to design customized shoes, which would ultimately become Nike as we know it today. Knight had

forged an agreement with the Japanese company Onitsuka Tiger in 1962 to import and sell their shoes in the

western U.S., but it took more than a year for Onitsuka to deliver the first set of samples. Bowerman

traveled to Tokyo for the 1964 Olympic Games and met with Onitsuka’s founder and CEO, the late Kihachiro

Onitsuka, sketched out his vision for footwear, and toured its factories to study the cutting and stitching

machines. Several years later, he designed his first hit, the Tiger Cortez, a training shoe for the long

distance runner that introduced the concept of a fulllength cushiony midsole, soft sponge rubber in the

forefoot and top of the heel, hard sponge rubber in the middle of the heel, and a firm rubber outsole. Knight

and Bowerman began producing shoes under the Nike brand in 1971, introducing their Cortez design in 1972.

Bowerman’s next invention was a shoe that had traction on all surfaces without spikes. His eureka moment

arrived in 1970 while eating waffles for breakfast. As he looked at the pools of syrup that had collected in the

depressions of his waffle, he wondered if he reversed the pattern, would the raised nubs provide the

traction he was after. He tested his theory by pouring melted urethane, instead of batter, into the family

waffle iron. The first attempt flopped: He forgot to apply an antistick agent, and the iron glued shut. But he

continued his trials, eventually fashioning a gridded, grippy pattern out of rubber. The iconic Waffle Trainer

finally arrived in 1974, made with the signature studded, handcut sole and nylon uppers imported from

Japan. Nike still sells a version of the shoe.

Nike calls Bowerman its “original innovator,” who paved the way for designers to imagine technological

innovations such as Flyknit uppers and Free articulated outsoles. Flex is working with Nike to innovate how



the next generation of products will be manufactured. “It’s really about how do we make the product,”

Sprunk says. “So instead of focusing on where we’re going to make a product in the future, we want to

spend just as much time on how we will make it, and from what material. Then the result of that, hopefully,

is to make products closer to our consumer markets.”

Nike subscribes to the concept of lean manufacturing, a system developed by Toyota in postwar Japan that

reduces manufacturing waste. The philosophy targets all kinds of waste—from material to cost to time lost

with inefficient tools or labor methods. Sprunk has taken steps to reduce complexity where it makes sense.

In the past two years, Nike has cut the number of active materials by more than 30%, deepening and

elevating its relationships with its remaining suppliers.

As part of its Manufacturing Revolution initiative, Nike will deploy dozens of projects across its source base

aimed at reducing labor costs, improving quality, and enhancing both the performance and aesthetic of

products by the end of fiscal year 2016. In one such project, Nike’s engineers have figured out how to use

robotics to automate the process of painting a sneaker’s midsole. At Nike’s 2015 investor meeting, Sprunk

described the old method, which “literally required applying tape to ensure paint only goes where you want

it, much like if you were painting your living room. It’s wasteful and it’s slow.” The new technique doesn’t

require tape but instead “enables new aesthetic paint effects that cannot be achieved by hand,” he said.

The company has also brought 3Dprinted traction plates into football shoes with the Vapor Laser Talon




cleat, in 2014, and it’s exploring broader uses of 3D printing to make cushioning that’s tailored to an

athlete’s foot.

As Nike’s partner, Flex is pushing the sportswear maker’s capabilities further into the future. Sprunk says

that after only six months into the partnership, Flex had delivered on some of that promise. “Flex has

already brought some really great innovative ideas for how to do things differently, helped us rethink some

processes, and asked us, ‘Why do you do it that way? Have you thought about doing it this way?’”

“It’s pretty phenomenal,” Sprunk says. “Lasercutting is a good example of a problem that has existed in our

industry for two decades. Flex had been working with us for six months, and they had a great solution.”

Flex’s relationship with Nike began with the FuelBand, a fitness tracker that debuted in 2012. Flex helped

develop the wristband’s hardware. Through the project, the two companies discovered some parallel values.

“Nike has a culture much like ours in terms of collaboration and risk taking,” Dennison says. “They don’t

look at their competition and say, ‘Okay, here’s how the competition’s doing relative to us.’ They look at

what the future could be and what they could be doing. They say, ‘We are going to gauge our successes

against our own capabilities and our own potential.’”

Nike discontinued production of the FuelBand in 2014. But it retained its ties to Flex. So when Nike

executives created a strategy to accelerate the company’s approach to its supply chain through innovation

and automation, Flex was a top candidate for the job, in spite of—or perhaps because of—its lack of

experience in manufacturing footwear. In choosing Flex, Sprunk says, “We decided that we wanted to go

outside of our industry because, frankly, we work with the bestinclass footwear manufacturers in the

world, but we felt we needed an accelerant or a catalyst to help us think differently as an industry.”

Leveraging lasercutting technology is just one of the ways Flex is rethinking footwear. Says Sprunk: “It’s

going to solve some problems that we haven’t been able to solve as an industry, and it validates exactly

why we wanted to bring somebody like Flex into this space.”

Before it could act as a catalyst, though, Flex needed to study how Nike shoes had been made for the past

50 years. A Flex team embedded itself with one of Nike’s manufacturing partners to learn the craft, ask

questions, and bring to bear its outsider perspective on improving triedandtrue factory practices, much as

Bowerman did when he toured Onitsuka’s factories in Japan. “That partner has told me personally that they

have been really impressed with the speed at which Flex has gotten the capability to make footwear,”

Sprunk says.

Flex has reverseengineered some shoes and engaged in some Bowermanstyle trial and error, too. One

major challenge for Flex: Unlike hardware, soft materials don’t always stay in place. Fabric also doesn’t

necessarily look or behave exactly the same from one batch to the next. “We’ve learned, through years of

practice, how to compensate for those natural variations, but an automated process can’t immediately

adjust for them,” Fletcher says. “We were trying to replicate what a craftsman does with those years of

experience. If you look at the 350 years of shoemaking, the craftsmanship is really about making a shoe look



and feel consistent, and with Nike, of course, the shoe has to perform for the world’s best athletes.”

To arrive at a solution, the Flex team needed to test how different materials, threads, and even colors

respond to automation, nailing down each of its “recipes” as it went along. The team also had to quantify

precisely such things as the amount of glue to use between the upper and midsole to achieve optimal bond

strength. Glue thickness is a critical parameter because it gives a sneaker its integrity and is one factor that

affects wear and tear. Glue application, now done by hand, is a process that stands to benefit from

automation. Once glue is applied with the precision of a machine, the chance of accidentally using too much

is eliminated.

Flex couldn’t figure out the right amount of glue just from observing the manufacturing process. “There are

elements of embedded knowledge that take place in manual factories,” Fletcher says. “Everybody just kind

of knows that if I put on kind of this much, then I get a good product. When you’re dealing with an

automated solution, you have to know what the number is.” Flex eventually arrived at the perfect thickness

for its cementing machine. “To be able to measure that perfect thickness in a manual process is almost

impossible,” he says.



Order of One




State of the art machinery will allow Nike to meet demand, innovate the way in which footwear is made,

and grow by making more shoes faster. It will also allow the company to produce personalized sneakers

while reducing the wait time. Speed combined with customization and greater innovation will be one of the

strategies that will help the brand reach its target of $50 billion by the end of fiscal year 2020, an increase

from $30 billion in fiscal year 2015.

Nike already lets consumers customize select sneakers through its NikeID website, where you can choose

between various graphic prints and colors, including adding your name or a personalized message.

Once you place your order, however, it can take up to four weeks for your special kicks to travel from the

factory to your door. Sprunk admits that in a digital age when people communicate instantaneously, that

long lag can be a turnoff.

Nike wants to slash the wait time for custom orders from weeks to days. To do that, it is working with Flex

to develop efficient methods for making orders of one, rather than 1,000—something its factory partners

already do well. That’s where a laser cutter comes in. The machine can go from cutting size 13 pieces to size

7 pieces without interrupting the factoryline flow, bringing Nike closer to its goal of faster turnarounds for

custom orders. “We think that unlocks a lot of growth,” Sprunk says. “It’s just a very different way to think

about the supply chain that our industry has built over 50 years, where the order goes for a thousand pairs

of size 9’s, and they ship in a container to a warehouse to be distributed to a store where you can buy one if

you like the color.”



In the near future, Flex plans to add speed and efficiency to the supply chain for Nike’s novel method of

knitting a virtually seamless upper from polyester yarn—the innovation behind its Flyknit shoes. Introduced

in 2012, after four years in the making, Flyknit employs proprietary machinery and software to weave

structure and support into a shoe precisely where athletes need it. The result is flexible and formfitting,

like a sock. Because the structure and support are built into one layer, the Nike Flyknit Racer is ridiculously

lightweight: The upper and tongue weigh just 1.2 ounces. The entire shoe is only 5.6 ounces for a men’s size

9, 19% lighter than the Nike Zoom Streak 3, which was worn by the first, second, and thirdplace athletes

in the men’s marathon at the 2011 World Championships. Bowerman would be proud.

In many respects, Flyknit is Nike’s lean manufacturing and innovation star. The shoe’s upper doesn’t require

the usual cutting, stitching, and gluing of parts so it cuts material usage by up to 20%. Since 2012, Flyknit

has helped Nike trim waste by nearly 2 million pounds, or more than the combined weight of three

passenger planes, as Sprunk suggested in his Investor Day presentation. And like Flex’s lasercutting

machine, it’s a modern, digital technique for making sneakers: Each shoe is a digital file sent by email

directly to a knitting machine. “What goes into the machine is literally a file that can have the size of your

foot, where you’d like support, where you have a difference between your left and right foot, etc. That can

all go into a file for a specific upper on that shoe,” Sprunk says. The machine can knit 100,000 pairs of the

same exact upper, or it can produce a size 7 Nike Free 4.0 Flyknit followed by a size 12 Nike Flyknit Lunar 3.




“That’s a great unlock for us, because it allows us to automate this process to customized orders of one at

scale,” he says.

To help restitch Nike’s supply chain, Flex is experimenting with the company’s manufacturing infrastructure

to introduce other innovations while speeding up the process. Flex hasn’t disclosed what those tweaks will

be, but they could involve sensors embedded in equipment to feed back data that could be used to optimize

the whole operation. “As soon as you start to leave that sewing technology, you get to a place where

automation, different types of robotics, different types of manufacturing make sense,” Dennison says.

To be clear, traditional manufacturing methods, and the factories that use them, continue to be an essential

part of Nike’s supply chain. These factories will benefit massively from the Flex partnership, too, as

learnings and innovations are rolled out across Nike’s global sourcing base.

Early on, Flex sent a small team to Asia to study how Nike’s shoes were being made in factories. “The

amount of craftsmanship that is associated with a manually built shoe was something we needed to

experience firsthand,” says Flex’s Fletcher. After observing the process, Flex brought in manual equipment

to replicate the factory setup at its headquarters, in Milpitas, California. Here, Flex employees are

researching how sneakers have been made for 50 years in order to devise a techinfused way to construct

shoes in the future. Says Sprunk: “This is a 10step journey and we’re just starting with Flyknit.”



More recently, Nike made a version of the selflacing sneakers depicted in Back to the Future a reality. (The




movie’s original shoe was designed by Nike’s legendary Tinker Hatfield.) Dubbed the Nike Mag, the sneakers

have an individually responsive lacing system that senses the wearer’s motion to provide adaptive on

demand comfort and support. They were a limited release available only through auction, with the proceeds

going to the Michael J. Fox Foundation for Parkinson’s Research. But it’s conceivable that some version of

the shoe could become available in the future as Nike continues to test the technology across multiple

sports.

As Nike and Flex explore the next phase of the Manufacturing Revolution initiative, the opportunities for

how the sportswear giant designs and ultimately makes its products for athletes around the world are

exponential. Says Sprunk: “When you combine the innovation in manufacturing of the product with the

innovation in the design and engineering of a product, there’s a compounding effect—innovation squared if

you will.”

A look at how the recently-announced Flex partnership will ... · By 1964, Bowerman and Knight...

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