Sporting goods designers and manufacturers assembled in Leipzig earlier this month called for a more integrated approach to design and production. They broadly agreed that the industry would run out of options to reduce labor costs, and that it should focus on reinforcing the interaction between brands and manufacturers to make the supply chain faster and more efficient.
The discussions took place at the Manufacturers' Forum organized by the World Federation of the Sporting Goods Industry (WFSGI), bringing together about 180 participants from 22 countries. Most of the talks were held at the Porsche factory in Leipzig, and the car manufacturer provided many insights by sharing its own approach to efficient production.
Several speakers pointed out that the changes would require an adjustment in the mindset of all parties. Designers should take into account the requirements and constraints of the manufacturers right from the start. Meanwhile, manufacturers should have a better understanding of the brands' objectives and market approach.
As delegates repeatedly suggested, a tighter partnership between the designers and manufacturers requires a common target, which ought to be the consumer. Some companies always leave an empty chair around the table at their meetings – for a representative of the end user. But in many cases, more efficient and meaningful communication between brands and manufacturers would be helpful for a start.
Herbert Hainer, chief executive of the Adidas Group (and a Porsche fan), said that the increasing labor costs in some of the largest manufacturing countries had become a challenge for brand owners, since they could not pass on all of the rise to the consumer; He said the industry had to break down barriers in its fragmented value chain and improve its internal processes, in order to satisfy consumer demand for speed.
But Hainer emphasized that an integrated approach was also the most adequate to achieve sustainable production, which is another increasingly important consumer requirement.
Hainer encouraged the use of new technologies to make the supply chain more efficient at various levels. Virtualization technologies help to reduce the need for some physical samples, for example. New technologies like knitted uppers made in one piece considerably reduce waste, making the process more sustainable. However, the Adidas chief added that technology still constitutes a significant issue, because the systems used by designers and manufacturers are not always coordinated.
James Carnes, global creative director for the performance range at the Adidas Group, said he was encouraging his team to engage with manufacturing and new techniques from the earliest stages. As an example, designers were made aware of many molding constraints when they had to come up with designs using Boost foam, a new cushioning system created with BASF, the chemicals company. They still found solutions for 400 design combinations with this foam, because they had eagerly learned what the machines and the technology could do before they started drawing – instead of suggesting the use of a machine for products they had already designed. Lead times could be reduced and solutions could be found more easily if the chain between the designer and the factory were shortened, Carnes added. This chain typically consists of a designer, a technician, a developer, a manufacturing expert and the factory employees. Carnes wants to turn that into a shorter chain with only the designer, the developer and the manufacturer.
Carnes has already observed marked improvements over the years. When he visited factories back in 1995, he was astonished to hear that employees hadn't been informed about the concept of the range they were making, not even the recommended retail price. This has changed entirely in the last two decades, with more intense exchanges between suppliers and their customers. On the other hand, Carnes said that apparel designers often still aren't trained adequately to understand future manufacturing processes (this is slightly better for footwear and equipment).
Steve Shih, business unit director at Yue Yuen, the world's leading sports footwear manufacturer, agreed that manufacturers often lack insights into market dynamics, hampering their ability to react faster to supply and demand situations. A major challenge from the manufacturers' standpoint is to adjust their organizations for the purpose of a more integrated design and production process. They should hire project managers who have an understanding of design, and adjust their incentive schemes to make sure that such talent is rewarded, Shih said. Current key performance indicators may not be the right way to stimulate the changes advocated by the industry.
It quickly became clear at the conference that the sporting goods industry is lagging far behind Porsche and other car manufacturers when it comes to integrated design and manufacturing. This is partly because Porsche owns its own assembly plants. While sports companies work with hundreds if not thousands of products that may change every season, car makers only have a few models that may be customized but still have a cycle of several years. But beyond these advantages, which are inherent to its business, Porsche also optimizes its production by taking into account the requirements and constraints of manufacturing right from the design process.
Professor Steve Evans from the University of Cambridge pointed out that other car manufacturers had learned to turn a 3D design into a finished product within nine months – cars could get made faster than socks, he teased. One of the keys to this speed is concurrent engineering, whereby the design of the car and the manufacturing constraints are discussed simultaneously. Manufacturers who adopt this process work with multi-disciplinary teams – again, with the common purpose of serving the customers, focusing on their demands as well as profit margins.
Such manufacturers develop “right first time” methods to avoid wasting time with too many prototypes and trials. Instead of the usual “try it and assess it” method, they move to a performance-based process. And they learn not to make any compromises: as Evans explained, discipline is one of the most important aspects of the entire process.
To get the manufacturers on board in such a process, they should receive assurances that the focus is on total cost and that their margins are protected, said Evans. Furthermore, just as Shih suggested, Evans advised that incentives should be built in for achievements related to an integrated manufacturing approach.
Speakers from Porsche Consulting had already outlined some of their insights a year ago in Taipei, where the WFSGI organized the first Future of Manufacturing Forum. Porsche's second German factory, after its original plant in Stuttgart, was opened in the eastern German town of Leipzig in 2002. It makes the Cayenne, Panamera and Macan models, turning out about 650 cars per day. Delegates at the forum were treated to a visit of the impressively clean and well-organized plant, and some opted for a hair-raising drive on the test track in the Panamera.
Oliver Blume, member of Porsche's executive board in charge of production and logistics, explained that the company started by developing a product concept, then worked on designing the product at the same time as creating principles of assembly, studying efficient production steps “paths optimization” for the organization of assembly lines, and tool handling. This work also takes into account ergonomics – making sure that the production process is practical for humans to handle, as shown at the Leipzig plant with robots that turn the car's body upside down for easier access.
Another crucial concept is modular design. Michael Tribus, the principal in charge of consumer goods and retail practice at Porsche Consulting, explained that a Porsche 911 was made of about 10,000 parts allowing roughly 10 million combinations. The modular system enables more differentiation and adjustments without affecting the efficiency of the chain –helping to address cost pressure and the demand for customized products. As an example, the company has designed five different sets of headlights, which are an important part for the car's appearance, but they all use the same assembly principle.
Porsche Design worked on modular design in the sporting goods industry with Tecnica's alpine ski boots. Tribus said the advisers started by studying the entire range, to find items of design that could be turned into common modules (focusing on parts that do not create differentiation). For example, they reduced from five to two the number of bolts required to fix the buckle to the shell, and they used the same system across Tecnica and Nordica boots. Instead of three latches of different sizes, they adopted one latch with three holes that could be used for more boots. Tribus said it helped achieve reductions of 10 percent in time to market, 10 percent in quality claims and 20 percent in engineering effort. He estimated the benefit at an annual cost saving of about €700,000 per year.
Christian Decker, managing director of Klöckner Desma, which develops machinery for footwear manufacturers, pointed to some irrational aspects in current production patterns. The lot size for footwear orders has been decreasing in the last years but warehouse inventories have not been going down much, as the number of product variations has soared. Most of the production takes place in Asia, which implies shipping time of six to eight weeks for many western markets, meaning bonded capital. Footwear is designed in two dimensions, then developed in three dimensions but taken back to two dimensions for production.
Among the trends envisaged by the industry to adjust these patterns are “urban manufacturing” and “design for manufacturing.” On an experimental basis, Desma implemented both of these concepts with a machine that customizes footwear in less than a day. The equipment turns out variations of the Quadwrap trainer, consisting of a sock with four material layers from one single family of materials. It can be installed in urban settings such as large stores, and the location would hardly affect the cost because the related labor costs are small: each pair requires just seven parts and one worker/minute compared with 80 worker/minutes per pair and 25 parts for standard footwear production.
The experimental equipment presented by Decker still cannot get around a longer production process including design and mold making. This remains a bottleneck in current footwear production, where the delays for molds tend to range from 40 to 60 days. Decker said that reducing this time is one of the keys to optimize footwear production. Technologies for the coming years involve upper and sole generation in three dimensions.
Three-dimensional technology was also highlighted by Jan Rosenberg, global vice-president lifestyle & consumer at 3Dxcite (Dassault Systèmes), as a way to speed up development and reduce costs. He showed that the latest 3D visualization could offer photographic quality. It could help to reduce sampling and to anticipate market research. But at the same time, it could also cut marketing costs and help to create exciting brand presentation, as shown at the Audi City on Piccadilly Circus in London.
Throughout the forum, participants spoke of the need to improve exchanges between brand owners and manufacturers. While technology could be useful for this purpose, many also wanted more personal exchanges, perhaps involving factory visits and traveling to brand centers, which could help the two sides to speak the same language.
The forum itself was appreciated as an opportunity to exchange thoughts. It will be repeated next year with a similar format but will switch back to Asia. Although Hong Kong appears to be the most likely location for the time being, the WFSGI is open to other options in South East Asia. The choice will be made before Ispo Munich. Around that time, the organization should also be in a position to announce the manager of its new office in Hong Kong.
Along with this annual two-day forum, the federation also intends to organize two- or three-day conferences and/or workshops focusing on manufacturing. These would target about 50 to 60 participants, to create more interaction and participation. A slew of other projects is in the works as the federation continues to expand its scope and services.
