What's Happening?
Swiss sports brand On has opened a new automated footwear factory near Busan, South Korea, as part of its strategy to nearshore production and reduce tariff exposure. The facility, equipped with 32 robots, follows the launch of On's first robotic site
in Zurich. This expansion aims to increase On's global capacity significantly, addressing supply chain disruptions and geopolitical volatility. The move is part of On's broader plan to regionalize manufacturing, with future expansions planned in the Americas and Europe.
Why It's Important?
On's investment in automation and regional manufacturing reflects a shift in the global supply chain landscape, driven by tariff risks and labor constraints. By producing closer to key markets, On enhances its operational efficiency and sustainability, potentially setting a new standard for the sportswear industry. This strategy not only mitigates tariff exposure but also positions On competitively against industry giants like Nike and Adidas. The focus on automation and regional flexibility could influence other brands to adopt similar models, reshaping the industry's approach to manufacturing.
What's Next?
On plans to replicate its automated manufacturing model across continents, with upcoming production sites in the Americas and Europe. This expansion will further diversify its supply chain and reduce dependency on traditional manufacturing hubs. As On continues to innovate, it may face increased competition from other brands adopting similar strategies. The success of this model could lead to broader industry changes, emphasizing automation and regional production as key components of supply chain resilience.
