I t often takes a catalyst to spur a company to fix something that on its surface doesn’t appear to be broken. The catalyst can take many forms, but it’s
frequently a major event like an acquisition or new
contract. Such was the case a few years back for New
Era Cap Inc., when it landed a major five-year licensing deal that promised to double its sales volume.
New Era is the number one provider of licensed
headwear in the world, and it has a long history of
supplying hats to professional athletes and sports fans
alike. The company has held the contract to supply
caps to Major League Baseball (MLB) since the 1970s,
providing all of the headwear major leaguers wear on
the field. It supplies the same style hats to concession
stands and retail shops at the ballparks as well as to
other merchants that sell team apparel, including
sporting goods retailers (like Dick’s, Lids, and The
Sports Authority) and department stores.
New Era distributes all of these hats through
its 300,000-square-foot distribution center (DC) in
Harrisburg, Pa., which is operated by Menlo Logistics.
The facility processes only hats; other sites handle
T-shirts and other apparel. About 60 percent of the
company’s total goods pass through Harrisburg.
The hats themselves come in a dizzying variety.
By way of illustration, consider what’s involved in
the MLB business alone. While baseball has only 30
teams, each team may have three or four different
caps, such as home, away, and a couple of alternate
caps. Plus, each of these caps comes in a range of sizes,
according to Jeff Holker, Menlo’s director of opera-
tions at the Harrisburg DC. “For fitted caps, there are
13 or 14 different sizes of caps, from a 6 3/4 all the way
to what they call a ‘bucket head,’ which is 8 1/4,” he
says. And that doesn’t include the caps the company
produces for consumers—hats for spring training, for
new stadium openings, or to commemorate individu-
al players or accomplishments, such as the retirement
last year of Yankees player Derek Jeter.
On top of that, the company supplies knit hats for
football season and winter wear as well as caps to pro
hockey and basketball (though not exclusively) and to
some college teams. As a result, the Harrisburg DC’s
stock-keeping unit (SKU) count currently stands at
around 23,000.
FLIPPING THEIR LIDS
When New Era first began using the Harrisburg facility in 2009, operations were largely manual. But the
following year, the company landed a major contract
that would force it to make major changes.
The deal dropped into New Era’s arms like a deep
When it landed a contract with the National Football League,
New Era Cap knew it would need a major DC overhaul.
What it didn’t know was that it would have just six months to do it.
BY DAVID MALONEY
A “New Era”
in distribution
