Disruption & Innovation in High Performance Apparel

Disruption & Innovation in High Performance Apparel



okay in this session actually we will talk about high performance apparel and now the first speaker is miss Janice went from the Evian Hong Kong limited she is the CEO of Avalon and properly high performance apparel is sort of rapidly growing areas in test our and apparel so let's see what Janice is going to share with us thank you good afternoon everyone so it's been a really interesting day and I and I learned a lot from the past three speakers and what they're working on today I kind of want to talk a little bit about disruption and innovation in high performance apparel I want to start with the stories of the three largest sportswear companies because I think it we need to put this in context and the context has to be to how to illuminate how a small idea can make a huge impact so we're going to talk about Adidas Nike and Under Armour full disclosure all of these are our clients and I had to stack I had to sign a stack of NDA documents about this large so everything that you see today is in the public domain this was one of Adi Dassler first shoes the spike shoe that we've all seen a spike to the top is made of kangaroo leather and the bottom are steel spikes between the mid 1920s and mid 1950s Adi Dassler refined his sprint shoe to help athletes break records and thus added us was born but what actually did he do that revolutionized quite a lot of what we know added us today it's this he took the same concept and brought it to a football arena where he decided to screw studs into the football boot and in 1954 West Germany squad or war this special cleat made by dazzla they later said that they won over Hungary they beat them three to two because of this shoe so after after that dostler had the idea of creating nylon soles for his sport shoes and this was just one of the many technological advances that he would make over the next few decades these ideas all came back because he tinkered inside a manufacturing facility he made things with other people Bill Bowerman anybody know who Bill Bowerman as he's the co-founder of Nike he was also the sports coach of the Oregon Ducks and so Bill Bowerman always innovated to make his athletes number one and I can't find an image of this because it was from the 1950s ok they were actually having a race and he wanted he said that every slightest advantage might make his athletes win so what did he do he dressed them in yellow and bright yellow t-shirts and a bright year a green pair of shorts and he said if my athlete can just inch his chest across that line I want the judge to actually see him inches chess across that line today and we have senses for those kinds of things but guess what these things were innovations at the time he would also say that in another example he would make his athletes train and white cotton long underwear because in Oregon it rains a lot and what they used to do was they used to wear sweat pants and if you have sweat pants it soaks up a lot of water if you're running in the rain so as a result the Oregon local residents because this was the nineteen fifty said oh it's indecent we we can't have so what does Bill Bowerman do at that point he dies the underwear green so all you get all these runners running around in in Oregon with green legs but it made them run faster so one of the biggest things that bio Bowerman is known for is about taking apart an existing Adidas shoe he takes apart they added a shoe because the best shoes are made in Germany and he says I'm gonna take out the spikes they're too heavy I'm gonna add rubber to the bottom and thus is the waffle iron that he took from his kitchen and he poured instead of pancake batter into it he poured urethane and by pouring urethane into it he created the core test shoe then he took that bottom upper and he flipped it around and he said well actually I want to make these kinds of ridges because it's gonna grip the ground harder and thus Nike was born so the question then becomes how does Bill Bowerman find out all of these things he has a spark of genius he doesn't do it alone he had to do it together with a local cobbler a springfield boot maker a japanese shoe factory which for all of you shoe heads out there sneaker heads out there it's Onitsuka Tiger they were the one who actually made Nike Nike and they had athletes providing the feedback loop the feedback loop was one of the most important things I've made Nike Nike Under Armour Kevin Plank in 1995 in his grandmother's basement ok Kevin's client son story of Under Armour will all start with one t-shirt in 1995 Kevin Plank who was not the greatest football player of them all but he was the sweatiest he swept through all of the clothes that he wore in and he's his football outfit and what then he did was he strove to make an undershirt that would wick away moisture and yet keep athletes cool so he goes to the New York garment district and he looks for women's underwear and he finds his anti wicking thing and and albeit this is 1995 right so we already had this kind of technology and he launches his first prototypes at the University of Maryland he goes out he enlists players to find out all of their pain points and today Under Armour is dominating every single sport that they go into Kevin Plank does not do this alone either he has a mother who supports him and makes him his dinner while he's you know starting his his his um startup in his grandmother's basement he has is that lift athletic football teammates you know who all support him and he has Kipp faults and clip faults as a CEO and he was a lacrosse player the other thing that he had is that Kevin Plank had Hollywood Hollywood made Oliver Stone said I'm gonna make any given Sunday and he Kevin Plank ships a whole bunch of these undershirts and says I hope that they really like it so the costume designer really likes it and he makes it and in that day they made eight hundred thousand dollars worth of in that week they made eight hundred thousand dollars worth of orders going from 17,000 in one year and the next week it was eight hundred thousand so now that we know the basis of how all of these kind of sports companies started when I talk about where they're going and if you look at all the vision statements of these companies Nike serve the athlete added us no athlete left behind Under Armour make all athletes better but everything is centered around the athlete the question has now become who is the athlete and hopefully this will play okay they want to be yeah so if we take something from this the market that you're now working for is so expanded that Nike has become a thirty billion dollar company adidas has become seventeen billion dollar company and the most incredible growth spurt of the malls obviously Under Armour going from seventeen thousand US dollars in nineteen ninety five to four billion today and this is kind of interesting because there's a lot of pressure on the market now the increase in demand for performance sport apparel and footwear has resulted in this increasingly long and complex global supply chain which in turn has created a lot of challenges for the industry if we look at this map above right we're going to say every region in which we source from has issues conflict limitations and resource poverty and in essence in the past twenty years we've gone to a supply chain that has focused on the price of labor and we went to we went to lower and lower cost production and some without the infrastructure or the technology that is required to to to make for a world that we live in today so we need to look a little bit about disrupting the whole way that we have to make product the innovation is still going is going to be how we can still sauce sustainably transparently and quickly and quickly is the key one here consumers not only expect it they demand it I think Amazon Prime really did our heads in because you know when with the advent of one-day shipping week they created this expectation that we should have what we have today it's not particularly sustainable Nikes made some inroads into this it's about producing sustainably they can tell you or so they say where your goods are made when they made it and who made it yeah okay in industry will also so I want to talk about what McKinsey has to say about this because it's it's a little bit of a different module McKinsey defines next sourcing as sourcing production in close proximity to both innovation and the customer today one of the most significant disruptions is actually moving manufacturing closer to home and closer to innovative technologies and doing it all together so I want to talk about two smaller companies sorry that actually are kind of interesting boathouse sports is a local Philadelphia company that makes uniforms for team sports okay if you have a baseball league of junior league baseball players you can make a uniform set of seven at birdhouse sports it's a very small company and yet it was chosen to make the u.s. rowing teams Olympic outfit and it's because it had some ideas about innovation it worked with the textile engineers at Philadelphia University to create custom fit custom knitted rowing UF forms and anti-microbial protection and if we saw what we saw in Rio you needed the antimicrobial protection nobody got sick which is a great thing this is Hong Kong reeta's it's very much closer to home and you can see it next door so how come Rita worked with Rose they scan them and in turn made better uniforms that have fewer seams and were better adapt to keeping them cool you know what these two eggs smaller examples show are that you need collaborations in Interdisciplinary things and I think all the previous speakers also talked about that remember the way that the Giants started their business this is the same thing you know you have collaboration and it it cut in a turn it creates a foster or something very different of course it's kind of easier to do this when you are only talking about small team of rowers and so I think one of the big things that has the biggest impact is how the Giants actually are going to change their supply chain Nikes innovation 2016 event in New York mark Parker says we're at an era of personalized performance we're gonna customize everything for anybody who wants it basically now we're going from unit of 10,000 unit of one you look into Nikes movement into the order of one you think well how do you actually do that right you need some state-of-the-art machinery but you also need state-of-the-art people okay does anyone here remember the fuel band it's this thing that's on my arm it launched in 2012 to Nike right Nike that was my first foray into being a wannabe athlete a Nike made me a new mom who one didn't really want to go running just do it and this is the reason why I'm mentioning the fuel ban is because it was made by a company called Flextronics and I assume the most you've heard of Flextronics Flextronics today is known as flex Nike last year announced that they were doing a collaboration partnership with flex flex is an electronics consumer electronics maker why has it got to do with Nike Nike decides to partner with them because Eric spunk says we decided that we wanted to go outside our industry because frankly we work with the best-in-class Footwear manufacturers in the world but we felt we needed an accelerant or a catalyst to make us think differently as an industry leveraging laser-cutting is just one of the ways that flexes rethinking Footwear it took flex six months to figure out a better way of cutting a soft laser cutting a soft material Nike been using that and said that they couldn't do it for 20 years they only could cut onto a hard surface material in May of in May 20 2016 so a couple months ago sorry it flexes consumer technologies group president Michael Flanagan says in 2016 there were 25 million smart athletic garments made in 2015 there were a hundred thousand it is significant in the last 18 months flex have built 20 inventions on the factory floor alone created the fastest factory launch including automation and new technologies in 150 days they went from auto factory ramp to factory ship so they shipped their first product in 150 days that's pretty damn fast for you know a foot one manufacturer who has never been a Footwear manufacturer before Nike is also working on transforming its trans traditional manufacturing it entered into a partnership with private equity giant Apollo Asset Management Apollo earth already it purchased a factory in New Holland Pennsylvania and two old factories in North Carolina they intend to strip out and transform them with state-of-the-art equipment and robotics and Nike is committed to giving orders for product that will be produced in the market in which it will sell so before we went all the way from America to Asia to produce and now we're going all the way back what does that really mean for the world for both the third world well not the third world both our economies out here in developing countries and what does that mean for developed countries it's not only Nike that's what it's working on this idea this is – it's going to do speed Factory adidas is looking at what they call a comprar Employment 150 people with lots of robots and they're going to make half a million pairs of shoes it's going to be quite interesting and not to be outdone on the open-source part you know because adidas all about collaboration they have game plan a now gaming minor is a is really interesting because game plan a is this idea of a philosophy of innovation bring everybody together and you might actually have something that sticks adidas says it's quite simple turn over the tools to work with open free spaces for collaboration and bring in new perspectives from everyone and you'll almost automatically get different results so it's it's something for leaders to think about and this brings us to under our Under Armour the country a company that search pastas lead us in the u.s. is not to be you know they're gonna fight Kevin Plank wants to be number one he wants to be number one Kevin Plank has bet almost a billion dollars that Under Armour will beat Nike so what does he do takes a billion bucks and he goes and buys a bunch of technology companies he bought map my run MapMyFitness MyFitnessPal and endo modo spend a billion dollars doing that but what he really did was he spent it on the people he brought all these companies for the great minds and he made sure that those CEOs and he would them to stay with him this basically will mean that the underarmor will have a very data-centric view of the underarmor consumer under armour knows when you have run 3.1 miles okay they know if you run in the rain they know when you want a new pair of shoes and they're going to sell you that pair of shoes it's underarm results gonna know whether you're healthy or not and so they launched healthbox who knows this could be the myspace of fitness apps right it could be obsolete by tomorrow but he's betting on something that will be on june on the 28th underarmour opens a state-of-the-art high-tech manufacturing facility in downtown baltimore Under Armour's making plans that are really something else I want to read you something that I got in the Baltimore Sun two days ago silently very quietly over the past 10 years Kevin Plank has been buying up Port Covington in Baltimore and he says and I quote I believe that we find ourselves at another fork in the road there are many great large and small businesses in our city as well as landmark institutions that have a huge impact it is a fact however that today there is no fortune 500 company that calls Baltimore home while companies can really help cities having just any large company here would not make a change for the better his own vision is for Port Covington is that it is a vision for investment opportunity in a making of American history he goes on to say we cannot wait we can't wait I mean that's both in the sense that I think we are incredibly excited to build something special in Baltimore and for you those of you who've never been to Baltimore Baltimore is like the drug capital of the world if you have all watched the wire right it also makes whiskey so it's two things drugs and whiskey and Under Armour number three okay kind of doesn't really if it sit well together but he's going to invest in this city and it's in it's a very interesting place for him to do it right so I want to show you what's inside the lighthouse project this all came from the Baltimore Sun I'm not showing you anything that you don't know see there's classified things there that's ours very happy about that but of course it's classified because you can't because they keep their secrets to themselves what they basically done is they've got the best 3d AMD scanner in order to capture morphology they've got lectura spelling and cutting systems they've got Bemis injection molding they've got dem there's Mo's robotics and then of course us right all of our Americans are in there there are be a hundred employees to begin with some of them are from Under Armour some of them are form the technology companies that are allowed inside this this this kind of laboratory that they're making and Kevin Plank says to the media at that point my hope is that you come here next year and it will not be here it will all be obsolete and new things will be in its place because we will continually innovate that's a very short time span one year I think we don't think in the kind of pace that that some of these leaders are thinking about so I kind of want to end with one short story nike adidas an Under Armour or point two one thing they're all getting the best minds to work on the most complicated problems there is a woman named Amanda Parks who is the chief technologist at manufacture in New York and she's also a textile expert what we and I'm just going to paraphrase what she says what we forgot about is the process of making things fashion companies have a particular expertise around feel and fit and how they want the product to have perform technologists don't understand how the process of making textiles there is a massive gap but it also can be bridged she tells that then she goes on to tell the story of a PhD lab that makes a battery technology inside a fiber they've made three meters of it inside their lab and they couldn't industrialize it so she takes the PhD students and the group from Intel and they didn't then she brings them down to shimazaki and none of these guys have seen the Shema second hitting machine before okay and she gets the Shema second mechanical engineers to figure out whether we can even knit this thing inside the machine and whether it's going to actually break the machine and they managed to knit the battery technology into a textile what I'm trying to say with all of this is that it takes different people it takes different skill sets and it takes very different context to create a future the disruption is actually not in the technology the disruption is in the collaboration of lots of people from different fields and leaders who allow it to happen and give them the physical space in which it to happen and that's why hubs work so I'd like you to think about that thank you

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