Putting a high-tech golf club in the hands of a high-handicap golfer will not necessarily produce a world class golfer. Similarly, simply adding technology to a poorly designed supply chain will not necessarily produce a responsive and efficient supply chain. The golf equipment industry, like many others, is not immune to the challenges of a changing competitive environment and fluctuating customer demand. A simple summary of trends in a golfer’s “driver of choice” over the past several decades illustrates this point: titanium metal woods have replaced persimmon woods, graphite shafts have replaced many steel shafts, trampoline clubfaces are replacing conventional clubfaces… and the list goes on.
A TaylorMade Supply Chain
But not all advances in the golf equipment industry are a product of the research and development department. Thanks to recent advances in supply chain management, the TaylorMade-adidas Golf Co. can now custom-fit, manufacture, and deliver high-end golf clubs to a customer in less than twenty-four hours. They are the first to offer this product/service combination on a large scale.
In order to make it happen, they knew they would have to re-design their supply chain. Their focus on supply chain integration was the vehicle that let the company reach its goal of improved operational flexibility and efficiency. Somewhere along the way, they realized they had the capability to support a radical new product / service offering. But it took strong leadership, sound planning and several years to make the positive change.
Technology Can Help a Supply Chain
To assist its supply chain integration, TaylorMade now uses an interconnected mix of homegrown and pre-packaged software across their supply chain. The company installed planning, forecasting, and collaboration tools to replace their rudimentary technology in 2000. Exactly how rudimentary was the system they replaced?
Take their inventory management system for instance. When Brad Barnett came to the company as Director of Operations in 1999, he “felt (as if he) had walked into 1985 (1).” The company was managing 1,900 separate stock-keeping units (SKUs) on an Excel spreadsheet.
Because Barnett came to TaylorMade from UPS, where he managed a 3PL contract for Dell Computer Corp., he knew exactly how far technology and supply chain management had progressed. TaylorMade now uses one system to manage its operations. “It’s all one flow from receiving to assembly floor to the finished-goods warehouse and out the door,” said Barnett (1).
By mid 2001, the company had made significant improvements to its production cycle time. The range went from 12 to 16 weeks to 6 to 10 weeks (2). This gave TaylorMade the capability to be adaptable to varying customer demand, which, according to Mark Leposky, TaylorMade’s vice president of global operations, is a big problem the golf equipment industry. Because golf is a seasonal game, TaylorMade has to deal with demand fluctuations: peaks in the warm months and valleys in cold months. Depending on the season, orders can vary from 4,000 to 40,000 clubs per day (1). Prior to their new system, the company did not recognize shifts in demand until “about two months too late,” noted Leposky. Because their new software helps with inventory accuracy and labor productivity, “(now we) recognize shifts in two to three weeks (2).”
Perhaps ironically, even executives within leading supply chain technology firms agree that improvements require more than just new technologies. Stuart Reed, IBM vice president of integrated supply chain development and deployment, believes that supply chain integration success requires that everyone be on board. It is “more than difficult,” he says. He believes a company’s executives must “share the faith.” “My superiors hate when I say this, but integration work is spiritual.” “You have to get under the nitty-gritty,” he adds (2). “Those issues don’t necessarily get fixed by dropping data into an enterprise software program that companies normally use.”
(1) Krause, K. (August, 2002). In the swing. trafficWorld
(2) Cleary, M. (August, 2001). The Benefits of Flexibility. Interactive Week.