Automation and Nike

Nike has cut some 106,000 jobs and closed 125 factories, thanks to increased automation in shoe manufacturing. The result: a cut in their workforce of nearly 10%, along with a rise in profits and revenue. The company says they’re looking to work with “fewer, better” manufacturing partners.

Sounds like a happy ending, doesn’t it? The cuts were fairly even, affecting the largest number of workers in Asia, where Nike had the largest number of contracts. Nike has taken criticism for offshoring jobs and has even been accused of running sweatshops. Reducing the number of exploited workers has to be a good thing, and their big investment in new automation technologies last fall appears to be paying off.

If Nike thought that complaints about exploiting workers overseas could be stopped by employing fewer workers overseas, however, they didn’t think about the threat of premature deindustrialization. Economists point out the Europe and the U.S. saw wages rise along with manufacturing. Once wages were high enough, the manufacturing jobs went elsewhere — but the wages were already fairly high. A shift to a service technology and perhaps in futuere to an information technology is sustainable if wages are already high. For developing countries in Asia and Latin America, though, wages haven’t risen fast or far enough to make the shift a good idea, now that manufacturing is moving back to the U.S.

Nike is using 3-D printing and Flyknit to make production more efficient. They’re moving back to higher priced manufacturing venues. They’re investing in new technologies. They’ve achieved record-breaking throughput in at least one of their U.S. plants. They’ve automated their warehouse and logistics.

They’re still facing complaints.

Nike has convinced enough consumers that they can “Just Do It” if they own something with a swoosh on it that they can probably ignore the complaints. If your automation needs are currently being met by legacy Indramat servos, drives, and controls, let us “Just Do It” — help you with your Indramat service needs.