Global footwear designer Nike plans to debut a revolutionary new running shoe in July, the Nike Flynit. The shoe itself has a promise to be a running shoe as comfortable as a pair of socks.  It is constructed from synthetic yarn woven together by a rather sophisticated computer-controlled knitting machine. Flynit could be a game-changer not only from an industry lens, but also the sourcing of global-wide manufacturing.

A recent Bloomberg Businessweek article describes why this forthcoming shoe has such game-changing potential. The computer controlled weaving technology knits the entire upper part of the shoe in a single piece that is then attached to the sole.  In the process which Nike terms as “micro-level precision engineering”, proprietary software can instruct the knitting machine to match any personal fit, function or appearance requirements of a consumer including shoe stability or aesthetics. Flyknit has 35 fewer piece components than Nike’s previous Air Pegasus Runner shoe, eliminates overall waste and dramatically reduces direct-labor assembly requirements in production. With the current dramatic run-up of direct labor costs within low-cost manufacturing regions such as China, Vietnam and other countries, the timing of Flyknit is advantageous.

Supply Chain Matters readers can equate Nike’s production breakthrough with that of the tenets of what is being termed as ‘additive manufacturing’, where a combination of advanced software and computer technology is married to digital, printer-like manufacturing devices allowing mass customization and far more efficient and labor-saving methods of manufacturing products. Additive manufacturing changes the strategic factors that drive decisions related to global outsourcing and what geographic areas to source this production, since direct labor and landed cost criteria becomes easier to quantify.

In October of 2011, we alerted our Supply Chain Matters readers to a Boston Consulting Group study that concluded that “a combination of economic forces is fast eroding China’s cost advantage as an export platform for the North American market.  Meanwhile, the U.S., with an increasingly flexible workforce and a resilient corporate sector, is becoming more attractive as a place to manufacture many goods consumed on this continent.” Since that time, more concerns related to the ongoing Eurozone debt crisis, foreign currency challenges such as that in Japan, and continued concerns for intellectual property (IP) protection continue to motivate manufacturers such as Caterpillar, General Electric, Honda, and, this week, Volkswagen to up their investment in U.S. manufacturing capability.

To add a much more insightful perspective to this important topic, the MIT Leaders for Global Operations and the MIT Forum for Supply Chain Innovation are jointly sponsoring a very timely and important executive conference, The Future of Manufacturing in the U.S, to be held May 8-9, 2012 on the MIT campus in Cambridge Massachusetts. The agenda includes an impressive lineup of industry, labor, CEO and academic perspectives regarding the future of U.S. manufacturing from those leaders and influencers who are shaping current strategies and investments. Please consider joining Supply Chain Matters in attending this timely and important conference.  We would not be at all surprised if this conference sells out early. Further information as well as registration can be accessed by either clicking on the conference link within this paragraph or the MIT LGO logo located in the Upcoming Conferences panel.

Bob Ferrari