BY DAVID MALONEY, CHIEF EDITOR
SYSTEMS INTEGRATION
IT 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, Foot Locker, 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
operations 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 individual players or accomplishments,
such as the retirement last year of Yankee 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 forward pass. In late 2010, the company signed a licensing deal to supply hats for the National Football League (NFL) starting in
2012. Under the agreement, New Era is now the official hat provider for NFL teams and all
strategicinsight
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.
A “New Era”
in distribution
