This month, SOURCE contributor Katharine Earley speaks to Graham Dicken, EMEA Marketing Manager for running shoe manufacturer New Balance. The company is celebrating 30 years of manufacturing in the UK this year, having substantially grown its Cumbria-based operation since it was first established in 1982. The factory now produces 1.2m pairs of shoes annually, for distribution worldwide, and makes 65% of the New Balance shoes sold in the UK market. We investigate the background to an inspiring domestic manufacturing success story and consider the unwavering appeal of the ‘Made in the UK’ label at an international level. Dicken also explains the company’s philosophy of supporting retailers and promoting local employment, and highlights some of its latest sustainability initiatives.
A brief company overview
New Balance was originally founded in Boston in 1906, when William Riley created an arch support solution (orthotics) for busy labourers to help them stay on their feet. The company began making running shoes in the 1930s, and today designs and manufactures innovative running shoes for a broad spectrum of customers, from fitness enthusiasts to professional athletes. It owns and operates another five factories in the US, while the remainder of its manufacturing is completed by third party manufacturers in China, Thailand and Vietnam. 50m pairs of New Balance shoes are produced globally each year, with annual sales recently totalling $2bn. The company will soon be launching its first corporate responsibility report.
Bucking the trend in UK manufacturing
Rising above the much-reported ‘manufacturing decline’ in Britain, New Balance has grown its UK manufacturing operation from a team of 40 in 1982 to a 220-strong workforce in 2012. It now makes 28,000 pairs of shoes a week, which are exported throughout Europe and Asia Pacific. The company was awarded the ‘Queen’s Award for Enterprise’ in 2004 for its export achievements. While demand for its handcrafted ‘Made in the UK’ collection continues to grow, New Balance remains dedicated to its core values of strong craftsmanship, integrity, customer satisfaction and team work. Many of its skilled factory workers in Flimby, Cumbria, have worked at the site for more than a decade, with two generations of relatives working side by side in some cases. Nearly a quarter of shoes manufactured at the factory are handcrafted.
‘Made in the UK’ retains a strong appeal overseas
“Our ‘Made in the UK’ range is particularly popular in countries such as Japan, Italy, France and Germany, and is also gaining ground in China,” explains Dicken. “Many international customers remain fascinated by the bespoke tailoring traditions pioneered in London’s Savile Row, and attach a strong value to high quality British craftsmanship. The Japanese in particular are attracted by our emphasis on domestic manufacturing. We’re also seeing a renewed level of interest in our shoes in the UK this year, with the advent of the London 2012 Olympics.”
The importance of product quality, retailer relationships and customer satisfaction
“Running a domestic manufacturing operation is also advantageous from a practical point of view, as it generates a rapid route to market and lower transport and logistics costs,” continues Dicken. “However, above all of this, our primary focus is creating a high quality, superior performance product – this is ultimately more important than the ‘Made in the UK’ label, although our strong brand image and story undoubtedly add value.”
“Our CEO Jim Davis and his wife are passionate about putting the product first,” continues Dicken. “They invest significantly in research and development and believe that at the end of the day, the product should speak for itself.”
New Balance does not engage celebrities to endorse its products. In an effort to invest in a more meaningful type of brand communication, the company is currently sponsoring a TV documentary following the lives of 12 British athletes and their endeavours to break into the highest level of athletics. It also supports athletes locally in Cumbria.
Dicken explains that New Balance has a loyal customer base among retailers and consumers alike, with its ‘product is king’ mantra and emphasis on high quality standards having built a strong following over the years. Importantly, Dicken highlights that the company understands the importance of loyal trade customers, and provides robust support to retailers, creating strong, long-term partnerships.
Focus on efficient, sustainable manufacturing
“We are increasingly incorporating a focus on sustainability across all our products, facilities and operations,” explains Dicken. “Together with our US colleagues, we are striving towards a zero waste operation by systematically analysing every stage of the process, from design and material selection through to manufacturing and distribution, in order to identify and eliminate waste. In the future, we hope to create products that are 100% recyclable.”
The sustainability and manufacturing efficiency initiatives operated by the company include educating staff on environmental issues in product design, development and manufacturing, rigorous life cycle assessment to compare raw material impacts, using environmentally preferred materials where possible, minimising the use of toxic substances, reducing waste and investing in improved packaging. Each initiative contributes towards overall improvements in product quality and manufacturing efficiency and helps to cut costs.
New Balance operates a ‘modular manufacturing’ system at its Flimby factory, whereby every element of the production of a particular product is managed independently by one team at a single location. In this way, the whole process is rendered more time efficient, from the cutting of raw materials to quality inspection and packing, with the throughput time of some handcrafted collections dropping from three weeks to four hours.
The Flimby site is also currently investigating renewable energy alternatives, while its recently upgraded compressed air system has cut annual carbon emissions by 31 tonnes and provides a source of free heating to the warehouse, saving 57,800kW of electricity annually. Additionally, all new sewing machines feature energy efficient motors. The factory recycles 190 tonnes of cardboard and 10 tonnes of plastic each year.
“We are fully behind the development of sustainable practices and committed to acting responsibly as a global brand,” concludes Dicken. “Sustainable, domestic manufacturing will be integral to the brand’s future growth.”
This article was published on the Ethical Fashion Forum’s SOURCE Intelligence website.