How Nike Is Innovating to Serve You Better

Nike (NYSE: NKE) hosted its 2017 Investor Day at the end of October and covered key details on how it expects over the next five years to drive revenue growth in the high single digits, expand margins, and create earnings-per-share growth in the midteens. A key enabler for the sneaker and sporting apparel company is its "triple-double" strategy, which focuses on driving growth in three areas where it expects to double its performance: innovation, speed, and direct (to consumer). Eric Sprunk, Nike's chief operating officer, took the stage at the event to discuss how innovative materials, expanding automation, and scaling up near-region manufacturing is driving "2x speed" for the company.

Traditional cut-and-sew techniques for producing footwear are labor-intensive, slow, and prone to slight differences in each pair manufactured. Nike has engineered two materials -- Flyknit and Flyleather -- to improve the manufacturing process and the performance of its footwear. Flyknit is made up of strands of yarn knitted together to make the upper part of the shoe. The knit can be a tighter weave where athletes need more support and a looser weave where breathability and flexibility are important. Flyleather is an engineered leather made of 50% "reclaimed leather fibers" made into a roll for easy feeding into an automated production process. The resulting material is 40% lighter and five times more abrasion-resistant than full grain leather, according to Nike.

In addition to improving the performance of the products made with these materials, they enable footwear uppers to be produced using automated processes, which improves the speed and consistency of the manufacturing. Shoes using these materials are already available for customers and taking 12 weeks out of the traditional manufacturing process. Because Nike has a Flyknit footwear manufacturing facility in Mexico, it enables consumers in the U.S. to fully customize a shoe on Nike.com and have it delivered in three to four days.

Continue reading

Source: Fool.com