Get your Pair of Adidas for $1! Process Improvement in your Projects is about the Journey, not the Destination

28 November 2011
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In our current global economy consumer products are dropping in price due to the maturity of organization’s that are schooled in the ability to leverage the best and cheapest resources around the world every point in the manufacturing process.   In recent years we have seen remarkably low priced items seen with the launch of Tata’s Nano car retailed at $1900 and now Adidas’ recent announcement of launching a $1 running shoe aimed at India’s growing population.

Adidas claims that through its Reebok subsidiary in India this exploding demographic can actually make the production of a $1 shoe profitable.  Obviously, many are questioning the motives behind this project.  Is it a real sustainable business model?  Or is it just a marketing ploy to help with the Adidas brand? Last year a similar project was piloted by Adidas in Bangladesh that failed miserably.  Regardless of their motives, what is intriguing about a $1 running shoe is its statement on today’s manufacturers and their ability to reduce their costs to the point where the notion of a profitable $1 shoe is not considered outright ridiculous.

The fact is, a big part of the reason a $1 shoe is made possible today can be attributed to the pioneering efforts of Henry Ford and his revolutionary ideas to develop and improve the production processes of the Model T Ford where ever possible.  Ford’s Model T was launched at price of $850 in 1907 and with the reduction of costs and materials by process and continuous improvement techniques he perfected by the mid 1920s he was able to drop the price down to $240 at the end of its production.  Like the Model T Ford, the $1 Adidas shoe is more of a statement on how manufacturers have matured in their ability to improve production processes and leverage economies of scale across the global supply chain, than it is about the real possibility of making a profit on such a product.

In addition, the $1 Adidas shoe is a statement on the importance of employing and supporting a formal process in any project.  After all, strategic process mapping and improvement in your projects will ensure that project activities are streamlined, team members are more productive and stakeholders are better informed.

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