With the new UA Lighthouse unveiled this week, Under Armour is pushing an effort to manufacture locally, or as CEO Kevin Plank put it, “local-for-local.” While the concept hasn’t been done on a large scale in the apparel and footwear industry, one Baltimore company used technology to bring manufacturing back to Baltimore nearly 20 years ago.
Marlin Steel, a company known for making bagel baskets, moved to Baltimore in 1998 after it was acquired by current CEO Drew Greenblatt. The company was founded in Brooklyn in 1968 but had trouble competing against cheaper baskets made in Asia. Greenblatt invested in $4 million worth of robots and adopted a philosophy he called “quality engineered quick.”
Marlin Steel’s workforce now includes many highly skilled workers. Trained engineers make up about 20 percent of the company’s employees.
Similarly, at Lighthouse, Under Armour wants to simplify the manufacturing process with technology while using manpower for more highly skilled positions.
“Kevin Plank is brilliant and I think is tapping into something that’s going to be spread nationwide over the next couple of years,” said Greenblatt. “People want to be closer to their manufacturers.”
Greenblatt is also the founder of Ready Robotics, which is housed at City Garage, Under Armour’s innovation center in South Baltimore where Lighthouse is also located. At the Lighthouse ribbon-cutting ceremony earlier this week, Under Armour used one of Ready Robotics’ robots to cut the ribbon. Greenblatt hopes to see the company’s robots used at Lighthouse someday.
“(Plank) is trying to be more local, he’s trying to be more local and quicker to market,” said Greenblatt, “They’re going to be more nimble and adaptable.”
Having experienced the transition to local manufacturing firsthand, Greenblatt pointed out several advantages to manufacturing locally, including a shorter lead time, more flexibility and not having to navigate language problems or time differences.
“Long supply chains cause a lot of problems,” said Greenblatt. “The truth is, the vast majority of businesses today are trying to figure out ways to make small lots very quickly so that they’re not buried with expensive inventory that’s the wrong color or the wrong shape.”
That can be a problem in the fashion industry in particular, where styles are always changing.
“If they (Under Armour) were to do a design here and manufacture overseas, it takes a decent amount of time for the product to come into the U.S. and into the stores,” said Ravi Srinivasan, assistant professor of operations management at Loyola University Sellinger School of Business.
When a product has a steady demand, it requires a lot of inventory both in retail and in warehouse, which isn’t always the best financial move.
“A lot of your cash is tied up out there,” said Srinivasan.
Quick turnaround is common in the software industry, where a company will develop and design a prototype and release it in smaller batches faster, a concept Srinivasan described as “agile development.”
“It makes a lot of sense especially when you need to reduce your lead time from design to delivery of product,” he said.
The challenge is determining which products should made locally under that model and which ones should be made overseas.
“Making overseas might be more cost-effective for more high-volume products,” said Srinivasan.
From a personnel standpoint, this new form of manufacturing will require workers who understand the technology and can adapt quickly to the shift to “mass customization” in modern manufacturing, said Greenblatt.
“That’s right in the sweet spot of American manufacturing,” he said. “Not being static, that’s right in the American psyche.”