Nike announced last week at its investor day that it's turbocharging its 3D-printing efforts. The athletic shoe and apparel behemoth has been increasingly embracing the innovative technology for prototyping. However, severalcomments from top management suggest that the company intends to use 3D printing for general manufacturing of new cushioning systems, and for the production of custom cushioning systems tailored to an individual's needs.
Large-scale manufacturing is surely a ways off, but the customized cushions could be a nearer-term goal. Said Chief Operating Officer Eric Sprunk: "Very recently, we've made a series of design and manufacturing discoveries with 3D printing that we believe will allow us to deliver a completely new, personal, performance cushioning system."
Continue Reading Below
The Advanced Product Creation Center
Artist's rendering of Nike's Advanced Product Creation Center. Image source: Nike.
Nike plans to construct a 125,000-square-foot innovation hub at its headquarters called the Advanced Product Creation Center, which will house advanced design and manufacturing technologies, such as 3D printing. The company views such technologies as integral to its goal of accelerating revenue growth.
The sportswear giant aims to reach $50 billion in annual revenue by its fiscal year 2020. It generated revenue of $30.6 billion in fiscal 2015, which ended in May, so this goal represents a 63% increase, or a 10.3% compounded annual growth rate. That's an ambitious goal for a company of Nike's size, and is faster than the 52.2% it grew over the past five years.
A huge vote of confidence for the 3D printing industry
Beyond the fact that Nike's going all-in on 3D printing is great news for Nike shareholders, it's also fantastic news for the 3D printing industry. Nike is not just the 800-pound gorilla in its industry, it's the 38th largest company by market cap on the S&P 500 index.
Nike's size and enviable financial resources mean that whichever 3D printing teammate or teammates it brings on board should be amply rewarded. Furthermore, its size and reputation for innovation give it broad influence outside its niche, so a 3D printing company that partners with it will likely be perceived to have vaulted ahead of its competition. That perception should open even more doors for such a partner.
Why 3D Systems and Stratasys will likely be benched in Nike's manufacturing revolution
Nike Vapor Laser Talon football cleat with 3D-printed plates. Image source: Nike.
Nike has long been on Stratasys' roster of 3D printing customers -- and, in fact, Stratasys also counts Adidas, Under Armour, and New Balance on its team. These athletic shoe companies have increasingly been using 3D printing to speed up the prototyping of new shoe designs.
Nike has recently gone beyond using 3D printing for prototyping, but only in an extremely limited way. In 2013, for instance, it introduced the Vapor Laser Talon football cleat -- the first ever football cleat that incorporates 3D-printed plates -- and then followed up with two additional models.Nike didn't announce the specific model 3D printer(s) it used, but did say that the 3D-printed components were made using selective laser sintering, or SLS, technology. 3D Systems held the patents for SLS until early last year when they expired, so it seems close to a sure thing that Nike used that company's printers.
I'd guess that Nike's relationships with Stratasys and 3D Systems will continue, and perhaps even strengthen, at least in the near term. However, Nike will have to look beyond them -- and, indeed, beyond all their rivals with 3D printers currently available -- for a manufacturing application partner. There's not a 3D printer on the market now that can churn out athletic shoe components fast enough for a huge company like Nike.
Why Carbon3D will likely be on Nike's 3D printing first string
Image source: Carbon3D.
It's very likely, in my opinion, that we'll learn that Nike is partnering with Carbon3D, a well-funded start-up that began operating in 2013 and plans to bring a 3D printer to market in 2016. One core reason is that Carbon3D's Continuous Liquid Interface Production Technology (CLIP) is the only 3D printing technology that we know of that's reportedly fast enough to meet Nike's production speed needs. Another major reason is that CLIP reportedly excels at elastomers -- polymers with properties like natural rubber -- making it a great fit for an athletic shoe company that can charge a premium for sneakers with superior shock-absorbing and cushioning properties.
CLIP harnesses UV light and oxygen to "grow" polymer parts continuously at speeds reportedly 25 to 100 times faster than the leading 3D printing technologies. Beyond its speed, CLIP sports other compelling features. Notably, it opens up new materials capabilities, according to Carbon3D -- a feature Nike could exploit to design future innovative cushioning systems. So CLIP has the potential to disrupt the manufacturing sector.
Carbon3D co-founder and CEO Joe DeSimone unveiled and demonstrated CLIP in March at the TED 2015 conference. At that time, Carbon3D announced that CLIP machines were being tested by four then-unnamed early-access customers: an automaker, an athletic apparel company, a design studio, and an academic research lab. It seems probable to me that Nike was the athletic apparel company. It's the No. 1 player in its field, so surely Carbon3D would approach it before its competitors. An added plus is that Nike's Oregon headquarters is a relatively quick sprint away from Carbon3D's Silicon Valley base, making collaboration more convenient.
Following TED, Carbon3D announced that Ford was the automaker testing CLIP, and the two companies also announced a partnership. Furthermore, the automaker's former CEO, Alan Mulally, joined Carbon3D's board, making him its first independent director. Upon learning this news -- which was followed by Google Ventures' announcement that it was investing in Carbon3D -- my conviction that Nike will be partnering with Carbon3D strengthened. The Ford-Mulally-Google hat trick verifies that CLIP has some major game.
Printing a wrap...We should soon learn the name of the "athletic apparel company" that's been testing a Carbon3D CLIP printer. Based on Nike's recently announced plans to ramp up its 3D printing efforts, and the big guns that have been lining up behind CLIP, I expect the two will announce a partnership. However, German giant Adidas, which also just announced plans to increase its use of 3D printing, and ravenous-for-continued-strong-growth Under Armour are also possibilities, though considerably longer shots, in my opinion.
The article Nike's 3D Printing Ramp Up: Which Companies Will It Partner With? originally appeared on Fool.com.
Beth McKenna has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A and C shares), Nike, and Under Armour. The Motley Fool recommends 3D Systems, Ford,and Stratasys. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright 1995 - 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.