On Running Opens Korea Robot Factory for Supply Chain

Key Developments in On's Manufacturing Strategy

Sportswear brand On Running has launched a new factory in Busan, South Korea, utilizing robots for shoe production. The company also announced plans for additional automated factories in the United States and Europe to address and mitigate supply chain disruptions.

Situational Overview

This strategic shift toward nearshoring is a direct response to global supply chain vulnerabilities, geopolitical risks, and significant tariff hikes imposed by the United States. On currently sources 90% of its products from Vietnam and 10% from Indonesia, making it susceptible to regional instability and trade policy changes. Automation allows production to move closer to key consumer markets.

Impact on Production and Costs

The Busan facility, equipped with 32 robots, can produce about 1,000 pairs of shoes daily. It employs an innovative "LightSpray" method that consolidates a complex 200-step manufacturing process into a single automated workflow. This change is expected to increase speed to market, reduce environmental impact, and lessen the financial burden of US tariffs on goods from Asia.

Summary and Outlook

On's investment in robotics marks a significant evolution in footwear manufacturing. By creating a more resilient and responsive supply chain, the company aims to strengthen its competitive position against industry giants like Nike and Adidas while ensuring greater production stability.

FAQ

Q: Why is On Running building robot factories?
A: To accelerate manufacturing, reduce supply chain risks, lower environmental impact, and move production closer to its consumers in the US and Europe.

Q: What is the production capacity of the new factory?
A: The Busan factory can produce approximately 1,000 pairs of shoes per day using its automated robotic system.

Source: Investing.com