Why It’s Good Nike Invested in Automated Manufacturing

In October 2013, Nike finalized an investment in the company Grabit, which develops automated manufacturing systems. Despite the fact that the Nike investment wasn’t a significant one in the grand scheme of its investments, it set the manufacturing world abuzz. For many industry insiders, the move signals a growing interest in manufacturing automation, which has the potential to revolutionize the industry.

Grabit, which is based in Silicon Valley, accepted the Nike investment as part of its Series A round of investments. The exact numbers were not disclosed, but Nike was listed as a minor investor; industry insiders speculate that the amount was at or below $600,000.

In a press release, a Nike official mentioned that the investment is part of the company’s goal to partner with new, innovative companies. By supporting Grabit’s work, Nike is helping to further research and development in manufacturing automation. The aforementioned press release made specific mention of Grabit’s electro-adhesion technology, which has the potential to streamline the manufacturing strategy for a number of companies. The technology is still in the early stages of development.

For Nike, an investment in the Grabit technology could have a number benefits down the line, particularly if the company integrates automated systems into their workflow. An automated adhesion process could speed up the production of the company’s shoes and athletic products, making it easier to increase output. Automation technology could also eliminate the need for human operators in numerous areas of production; as a result, Nike could employ fewer workers and cut costs across the board. From a risk management standpoint, automated systems would be considerably safer, as they cut down on repetitive-motion injuries and position operators farther from the moving parts of a production line. Although Nike has not stated that they will be moving to a fully automated system, the new adhesion technology has the potential to streamline and improve their manufacturing strategy.

For manufacturing professionals, the Nike investment signals a change in the global manufacturing landscape. As wages in China begin to rise, manufacturing companies are slowly coming back to the United States. According to a recent story in MarketWatch, American manufacturing was on the rise in September for the fourth month in a row. In such a time of change, the Nike investment is a sign of confidence. As manufacturing automation becomes more sophisticated and more affordable, other companies are certain to follow the shoe manufacturer's example.

The rise of manufacturing automation and the growing strength of the industry in the United States do not necessarily point to a significant increase in manufacturing jobs. As the Nike investment signifies, companies are interested in faster, leaner manufacturing setups that require fewer people. Most experts agree, however, that the benefits—lower costs, safer conditions, and more predictable quality—outweigh the minimal impact on the job market.

Although partnership with Grabit is not the largest Nike investment on the books, industry professionals see it as a sign of the changing tide in manufacturing. With improved systems, US companies have the power to reenergize American manufacturing and improve the overall economy.

(Photo courtesy of freedigitalphotos.net)