Friday, April 15, 2016

Made in Baltimore: Under Armour's Innovation in Production

Anything that has to do with Port Covington certainly brings up the question of jobs since Port Covington and Westport had been part of the heart of a manufacturing based economy in which Baltimore was a leading city in America and also a place of innovation. The first passenger rail started here, the crown-cork was invented here, and Port Covington boasted the most efficient conveyor of coal from rail trucks to ships.
Jobs to Baltimore?

What Under Armour wants to do with the "Lighthouse" model of local production is a revolutionary idea with the potential of completely re-shaping how production has been done for the last 60 or so years. Namely offshore. That is where Under Armour's products are made today, the rapidly growing number of UA brand retail locations notwithstanding.

But UA owner Kevin Plank sees the writing on the wall: Rising human labor cost even in low wages countries, a shrinking share of human labor in overall production thanks to automation and use of robots and increasing desire for specialized high quality goods.

Getting at this set of trends from several sides is what UA is trying to do with "Ligthouse".  UA and its competitors Nike and Adidas are well underway to reduce the amount of manual labor needed, especially for their shoes, by replacing shoes made from a dozen or more parts with those made from just two parts. The truly revolutionary innovation, though, is this: Instead of having these new shoes made in a giant factory with a very high output of identical products that then will get shipped all around the world, Plank is envisioning small and highly flexible production units that can serve local markets with products that are custom tailored to local conditions. And the prototype takes shape right here in Baltimore.
The Lighthouse production component of Under Armour in Baltimore

Lighthouse is a boutique style operation that will begin production in a few weeks in one part of City Garage, Under Armour's version of incubator, workforce development and maker space.

Data about the number of employees, the number of pieces produced there or what market-share they would represent are not provided at this time. The reality of this type of "Starbucking" of production (Kevin Plank's Venture Capital adviser Damien Costa) is that it will never employ thousands of more or less skilled Baltimoreans. That would be counter to the concept. But if this model of production works out here, not only will some production be local again, UA will have revolutionized manufacturing principles globally in a model that could be applicable to many other products and in total could have tremendous impacts on the local labor market. And the experiment happens right here in Baltimore. Maybe that will allow us to catch up with other former rustbelt cities which have grabbed the bull by ts horns and have turned rustbelts into brainbelts.(See my weekly in depth blogpost about this subject.)

Klaus Philipsen, FAIA

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

Workforce training in a "maker space", the Foundery space at City Garage

The once innovative coal conveyor at Port Covington