Monday, May 23, 2011

New Balance: Holding their own

New Balance started in the early 1900s as a manufacturer of arch supports and orthopedic shoes. By the 1970s the company was focusing on athletic shoes. Twenty-five percent of the shoes New Balance sells in the United States are made domestically. They opened the Maine plants in Skowhegan and Norridgewock in 1982; and Norway in 1997. Twenty-five percent of the shoes New Balance sells in the United States are made domestically. New Balance employs more than 4,000 people worldwide. According to the company labor costs at the U.S. plants are more than 13 times higher than overseas, but the domestic plants are more productive. Manufacturing techniques developed by Toyota Motor Corp are used to produce shoes in 70 minutes from start to finish. The US domestic plants manufacture 7 million pairs of shoes yearly, roughly 25 percent of the shoes the company sells in North America. Shoes are put together on an assembly line with 32 stations. Leather is first cut leather into shapes. Next, stitchers sew pieces together before passing them on. Machines wrap the shoes over a last (this sets the size and fit), and workers attached the soles. "Single piece flow" manufacturing also lets New Balance ship shoes on the same day they are made, meaning less wait time for customers, a competitive advantage in North America. According to experts these are the last three manufacturing plants in the United States.
In April, New Balance launched a custom-made shoe program, allowing consumers to design their own shoes online. Buyers can pick from different colours (and mix-and-match colours) and order custom embroideries. New Balance makes and ships the custom shoes immediately so they arrive anywhere in the country in four to eight days. New Balance owns brands including Dunham, PF Flyers, Warrior and Brine. According to SportsOneSource, in 2010 Nike and its subsidiary Jordan had roughly 45 percent market share, Skechers had 6.4 percent and New Balance had 5.8 percent.

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