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The Key Benefits of Under Armour's Manufacturing Innovation Focus

In this clip from the Industry Focus: Consumer podcast, Vincent Shen and Fool contributor Seth McNew talk about the four areas that Under Armour (NYSE: UA) is focusing on with its new Lighthouse project. Then, they talk about a few significant advantages the company has to gain from a project like this.

A transcript follows the video.

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This podcast was recorded on July 12, 2016.

Vincent Shen:  I remember the Lighthouse project seems to have a couple areas of focus around 3D design, body scanning, like you mentioned. Can you touch on those a little bit?

Seth McNew: Yeah. They said there's four areas of focus that they're really working on here. The first one is 3D design and body scanning. That's related to how they're looking at how an athlete's body changes by season, what kind of fabrics are best for a moving athlete that's using the body scanning. The next one is 3D printing, which is both for actual product and for rapid prototyping. They have the massive 3D printers that are actually printing products that a consumer might use, and then to the lower end where they might create a product really quickly just to test out the size and shape. Then, there's another section that's for apparel and footwear prototyping in other ways, like with actual fabrics and some kind of molding processes. Then, the last one was apparel and footwear pilot lines. So, running manufacturing models to see if an idea or design would work at scale.

Shen: Can you give us a sense of some of the advantages that the company gets from this Lighthouse project? What are some perks or some innovative new products, or things they've been able to push out or test as a result of experiments like this?

McNew: They came out in March with these 3D-printed shoes. They were the first company to make it to market with a 3D-printed training shoe that was actually 3D printed. Some other companies have been working on it. New Balance came out with some in April. But these were the first ones out. I got to try a review pair. They were pretty interesting. They're a weightlifting shoe, and they have this 3D-printed lattice heal. It's a design that you wouldn't be able to create without 3D printing. So, that was the first time that you really see this is a viable thing. I think a lot of people say 3D printing products, especially in apparel, is kind of a marketing gimmick. But I have to tell you, these shoes were incredible. And you can see how you would get more customization, better fit... not everybody falls between a 10 and a 10 1/2 shoe size. So if you can get a 10 1/4 shoe size that fits perfectly to your feet, you can choose the customization of colors and the material. And then, of course, the biggest part of that is deliverability. With 3D printing, imagine if you can go to a store, and you can scan your foot and have a shoe made right then for you.

Shen: OK. I see here now, these were called the Architects. It seems like it was a pretty small launch, but the reception was pretty positive, and they sold pretty quickly, right?

McNew: Yeah. They only launched 96 pairs, which is a throwback to when they started in 1996. They sold them for $300 apiece, and they sold out in just 18 minutes online.

Shen: Oh, wow! Obviously not anything that's going to drive bottom line at the moment, but definitely proof of concept, would you say?

McNew: Yeah. It sounds like they're going to have another launch this summer. I'm not sure if it'll be a full launch, and they haven't released very much information about what that would look like. But definitely keep watching for that.

Seth McNew owns shares of Under Armour (A Shares). Vincent Shen has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Under Armour (A Shares). 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.