How Are Sneakers Manufactured?
With sneakers being a multi-billion dollar industry, how they are crafted is an essential part in understanding a sneaker’s potential value. Moreover, how these products are created can reveal what a sneaker’s supply chain looks like. As supply chain issues have been on the rise in almost every industry due to Covid-19, some of these distribution problems have impacted the sneakers industry and sneaker pricing in general.
Overview of the Sneaker Manufacturing Process
Each sneaker brand brings their own unique element into how they create their product. However, there is a general step-by-step guide on how they manufacture their shoes. It is important to note that the production process is usually outsourced and 75% of the global footwear manufacturers are located in China, India, Vietnam, and Indonesia. Here are some of the general steps these manufacturing companies go through in order to create their sneakers.
The Design Process
The sneaker creation procedure begins with the design process. The shape of the shoe is formed by a shoe mask and some masking tape. Once this is completed, the designer draws the sneaker’s pattern on top of the tape. Then, this pattern and shape is manipulated into a digital copy that can be transferable to the manufacturing machine for production.
In the construction process, a shoe mold is created as the base of the sneaker. Since sneakers come in various sizes, the mold is manipulated multiple times to ensure each size is catered to. Simultaneously, while these molds are being manufactured, the sneaker soles are being designed on a digital platform to ensure there is support and comfort for the shoe.
Once all of these elements of production have been completed, the final steps include the fabric cutting and sewing process. Based on the fabric cutting instructions outlined in the design process, each shoe's fabric is cut due to its size. Some manufacturers use a laser-cutting machine or create a metal mold that cuts through the fabric to get its perfect shape. Finally, once all of these pieces have been cut, the sewing process begins. Each procedure is broken down and once each of these steps are completed, the shoe production process is finalized.
Current Supply Chain Issues Impact on the Sneaker Industry
Due to Covid-19, inflation, and the oil crisis, supply chains in every industry have been delayed. Here are some of the current supply chain issues within the sneakers industry and their overall impact.
Supply and Demand Unaligned
When the Covid-19 pandemic hit, major brands and manufacturers believed they were going to be faced with a steep decline in demand. However, this turned out to not be the case. Demand drastically increased but was misaligned with what manufacturers and the overall supply chain was able to accommodate. During this time period, one of the biggest sneaker manufacturing countries (Vietnam) had to temporarily close down its factories to prevent the continuous Covid-19 outbreaks. Due to these factory closures, inventory decreased by 130 Million units. This had a ripple effect in the supply chain, where inventory became out of stock faster and prices continued to rise.
Sneakers have inflated in price over time. In 1985, a pair of Air Jordan 1’s could go for around $65 and now range from a $90 to $170 retail price. Additionally, with Covid-19 and these supply chain issues, these sneakers have not gotten any cheaper. The RealReal announced in 2021 that some of Nike’s most highly valued sneakers increased around 32% in value in one year alone. Although a factor of the increase in sneaker prices comes from hype and inflation, supply chain issues have exacerbated this trajectory. Due to the limited availability of these sneakers and the high demand, some speculate that these high prices are here to stay.
Even if all production issues were resolved and the manufacturers could keep up with the demand, there would still be shipment issues. Shipping container shortages have been an issue globally since the high demand for online-products surged within every industry, leaving shipping companies inflating their price on moving inventory. For example, the New York Times found that a shipping container moving from Los Angeles to Shanghai prior to the pandemic was roughly $2,000 and now the current price lies around $25,000. Air freight has also followed this trend and oil’s high prices have not helped lower this price tag.
Controversies on Manufacturing from Major Shoe Brands
It is important to note that major name brands have had a plethora of controversies surrounding their manufacturing process. Nike has been in the center of these controversies dating back to the late 1980s where they have been accused of knowingly using sweatshops that have shown both child and forced labor. The most recent scandal that surrounded their manufacturing process had to do with forced labor connected to the Xinjiang Uyghur Autonomous Region (XUAR). However, Nike has stated this labor treatment is inexcusable and goes against their Code of Conduct and Code of Leadership Standards. Since Nike has contracted production with nearly 785 factoring and over one million factory workers, they aim to ensure their Code of Conduct has been thoroughly executed and the treatment of these workers is in line with their company policy. However, this has been a decades long issue with the majority of the popular sneaker brands on whether or not they are trying to achieve ethical outsourcing.
How Your Sneakers Came to Be
From sourcing the raw materials to designing and constructing the product, manufacturing one sneaker goes through a tedious process from start to finish. With supply chain issues and the ripple effect of Covid-19, the sneaker industry has witnessed a high increase in prices. However, this article can showcase why these sneaker prices have been inflated and what that means for the future of the sneakers industry.
Q: Does Nike have supply chain issues?
A: One of the biggest culprits of Nike’s current supply chain issue is due to the factory closures in Vietnam, backing up their inventory and forcing them to cancel production on 130 million items.
Q: Is there a sneaker shortage?
A: Yes, there is a sneaker shortage due to factory closures from the covid-19 pandemic.
Q: Why are sneakers out of stock?
A: This is due to the shortage of inventory based on the sneaker supply chain issues.