While Nike and other major shoe manufactures have been taking their manufacturing operations overseas to places like China, India or Indonesia, New Balance has been taking a whole other approach. See, even if your product relies on low cost labor to stay profitable, there is a way to approach the problem form another angle and achieve the same goals in terms of cost of manufacturing. The reason is that the problem isn’t about low cost labor, but it is about the age old thing of keeping costs low to make more money. The same goal can be achieved to by building a business model around automation, which New Balance has done very well. This way they get to keep manufacturing costs low and stay competitive and the related jobs in the country. As far as I am concerned, they are modern-day American heroes that is especially neat considering the corporate scandals the newspapers seem to be constantly be filled with.
But keeping costs low while making such sought after products such as men’s tennis shoes through automation is no small feat, because it is not without risk. See, when Nike and the like decide that they want to cut production back, all they have to do is to close a plant in China (with very little regard to what effect that might have on the people there, I might add). If you have just invested several million dollars into a state-of-the-art manufacturing line up front, you cannot afford to cut production back, not to mention that you had to spend the money ahead of time. It is indeed very risky.
The great thing is that most sporting goods lend themselves to be made this way such as babolat rackets, but I could have named any other items.
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