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Under Armour's vision for future manufacturing: make local for local

Making shirts and shoes closer to their customers' backyards. Under Armour has a vision for manufacturing in t

Before calling it Project Glory, Under Armour executives batted around another name for a project launching next year to make products in local markets.

"Black Swan," a reference to an old belief that no black swans exist because none had been sighted, seemed a fitting name for the brand's vision for manufacturing's future, said Kevin Haley, the company's head of innovation. Because so much production moved offshore in pursuit of low-cost labor, especially in the labor-intensive apparel and footwear sector, many believe it will never come back to the United States.

"We chose to look at things a little differently," Haley said. "If you could manufacture a shirt or a pair of running shoes in Baltimore and sell them at a profit in the U.S., then what can't you manufacture in the U.S. and sell in the U.S? We can be a beacon to show the way ... that with the right amount of innovation and technology and know-how — and the will to do it — you can manufacture anything here."

Those ideas formed the basis of Project Glory, an initiative the Baltimore-based athletic apparel brand has explored for several years but only recently began discussing publicly. The long-term goal is for Under Armour products to be made closer to the markets where they're sold, for instance in the U.S. for U.S. consumers, in Brazil for South American buyers, in Europe for European shoppers and in China for the Chinese market.

"We're starting in Baltimore," Haley said. "That's our home."

The initiative comes at a time when manufacturers are re-evaluating how goods are produced, prompted by rising labor and energy costs in China and elsewhere, complications associated with international shipping and the growing availability of technology that reduces labor requirements.

Some apparel companies, in particular, are starting to look at "not mass production, but mass customization," said Jeff Fuchs, executive director of the Maryland World Class Consortia, a nonprofit that helps manufacturers improve productivity.

"Everything we're surrounded with is almost completely mass-produced," Fuchs said. "But modern technology is making it possible to change that and change the economics of production and make it possible to provide customers with uniquely tailored products ... and do that in an efficient way."

Under Armour plans to start developing and perfecting technologies next year to enable a "local for local" model, building on systems it already uses to make its Speedform running shoes in a lingerie factory.

The work will be done in a design and manufacturing test center called Under Armour Lighthouse that will open sometime next year in a renovated 133,000-square foot former city garage in Port Covington, where the company plans to build a sprawling new waterfront headquarters campus.

Engineers, developers and designers — new and current Under Armour employees and others rotating in from manufacturing partners around the world — will collaborate on the project in the new facility. Their mission will be to develop and find ways to use advanced manufacturing processes to make products on a smaller scale in local markets while improving the products' performance.

Eventually, Haley said, the Port Covington facility will also make shoes and apparel that could be sold across the harbor at the city's Under Armour Brand House and at other U.S. Under Armour stores.

Advanced technologies will "reduce lead times, time in transit," Haley said, "so the consumer gets what they want more quickly, more efficiently, and gets better products."

For products that are designed in the United States but made in China, Vietnam or elsewhere in Asia, shipping times that typically stretch over weeks are sometimes extended further by labor disputes and other issues, said Ravi Srinivasan, an assistant professor of information systems and operations management at Loyola University Maryland's Sellinger School of Business and Management.

"One of the things that happens is now suddenly what was supposed to take two to three weeks may be stuck at a port several more weeks," Srinivasan said. "When you consider companies like Under Armour or Nike, or any fashion industry, the timing is really important. You need to have the right product at the right time available. That's challenging ... specifically industries like fashion and electronics, because of how fast tastes change."

Making goods locally makes companies not only more nimble in supplying inventory and reacting more quickly to changing tastes, but better able to respond market by market and to customize merchandise, he said.

Srinivasan said he would expect Under Armour to continue offshore production for some products, while establishing local production for others.

As of last year, the brand's apparel and footwear were made by 29 primary manufacturers in 14 countries, with 65 percent of products made in China, Jordan, Vietnam and Indonesia.

A shift toward local sourcing and materials in Baltimore can only help the city and its manufacturing base, bringing well-paying jobs with benefits, said Drew Greenblatt, president and owner of Baltimore-based Marlin Steel Wire. The company makes wire baskets for factories in 39 countries, buying steel and other raw materials from American suppliers and making all its products at its Southwest Baltimore plant with the help 30 employees and state-of-the-art robotics.

"A lot of companies are re-evaluating whether it makes sense to put your next factory in Shanghai or to put your factory in America. We're thrilled that Kevin Plank is starting this initiative," Greenblatt said of Under Armour's founder and CEO.

The ripple effect on the local economy from a $3 billion company that's projecting to hit $7.5 billion in sales by 2018 could be enormous, he said.

"When he buys from locals, he helps the local community," Greenblatt said. "If Under Armour is buying from local manufacturers, in all likelihood, the local manufacturers are going to hire locals, and it's really going to help the local community. ... Kevin has such amazing heft, if he points a modest amount of money to the U.S. as opposed to China, Baltimore City will be a huge winner."

Using technology and robotics to improve efficiency represents the future of manufacturing, he said.

"The alternative is extinction," he said. "If you don't invest in technology, employees don't have the best tools. If they don't have the best tools, employees are not competitive. … There's no choice of bringing back the old-style jobs. That's gone. The future is high-quality, highly engineered jobs running fancy robotics and fancy automation. I believe in the American manufacturing renaissance. It's going to happen, and it's happening."

Under Armour already has launched several products made possible by the advanced technologies it envisions using more of in the future, Haley said.

The Speedform running shoe, introduced last year, is not made in the conventional way, with 150 to 200 people touching each shoe as it moves down an assembly line, but instead through a partnership with a lingerie factory that used 3-D molding to create the shoes.

The result is a shoe without seams, designed for comfort and a more precise fit and made with less labor, Haley said.

Transferring that or similar technologies to local markets could allow the company to spend less on shipping and duties and more on materials and production, he said. The company has begun using other manufacturing technologies similar to the one used with Speedform, but won't identify them for competitive reasons, and more are on the way, Haley said.

He expects "local for local" production in the future to involve footwear and other products as well as customization for a specific end-use or individual consumer.

Under Armour Lighthouse is intended to become a permanent advanced manufacturing facility at the company's future 50-acre, waterfront campus in Port Covington.

"Our goal is to not limit this to our facilities or even apparel or footwear, or even our industry," Haley said. "We want to show if we can make something as labor-intensive as a $25 T-shirt or a $100 pair of shoes in Baltimore, you can effectively make anything anywhere. We think we can change the shape of the economy over the longer term."

lorraine.mirabella@baltsun.com

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