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October 2009
An Edgell Publication
®
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POS Imperative PY
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POS upgrades are theCdefining
technology for customer
D insight
E
T
IN
Next-Gen
PR POS
R
E
P
SO
E
R
AD
U N D E R A R M O U R gets its
IT systems in shape to deliver
end-to-end visibility into orders,
shipments and inventory
Playing
to win
Drivers to upgrade POS include
PCI compliance and better tools
for associates
The Secure Store
Retailers fight back against
shrink but face daunting
challenges
Jim Calo, Eric Olsson
and Mike Fafaul roll out
warehouse management
without working up a sweat.
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COVER STORY
BY CHRISTINA ZARRELLO
Playing to Win
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UNDER ARMOUR GETS ITS IT SYSTEMS IN SHAPE TO DELIVER END-TO-END VISIBILITY
U
INTO ORDERS, SHIPMENTS AND INVENTORY
IB
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T
IS
D
nnovation does not occur by happenstance. It takes
Between its innovative product line and massive media exposure,
investment, resolve and insight — these prescient
it’s no surprise that Under Armour isRtoday a world renowned brand
words spoken by a man who 13 years ago devised a
that sells its popular performance
FOapparel via the Internet, catalogs
soon-to-be billion dollar idea. While many retailers
and 17,000 sporting goods stores
T worldwide. The retailer operates a
Oand outlet stores throughout the country.
continue to be plagued by low consumer spending,
booming wholesale business
N retail store in late 2007 at the Westfield
especially those that sell discretionary items such as
It debuted its first specialty
.
apparel, Under Armour, which is known for its innovation in
Annapolis Mall in Annapolis,
Maryland. Under Armour stores are deLtheYunderbelly
textiles, has posted steady double-digit increases across its
signed to look like
a sports stadium with a tunnel enNleading up to theofstore.
entire line of product offerings including men’s, women’s
trance and a ramp
O
and youth apparel. In a span of 13 years, the Baltimore,
The brand
supplies a wide range of sportswear and casual apparel
G
Maryland-based company has transformed itself from a virincluding
running
sports cleats, slides and training shoes.
INits productsfootwear,
tually unknown entity established in a basement into a globTo keep
hot
and
cutting-edge,
Under Armour recently inD
A
al brand worn by professional athletes on playing fields
troduced
the Recharge suit, which is built with strategic compression
E
around the globe.
R that is designed to stabilize muscle tissue, while controlling postL workout swelling.
A
The Mega-Million Dollar Idea
N
Sometimes all it takes is a simple idea to spur a mega-million
BY THE NUMBERS
O
dollar business, and Kevin Plank, a University S
of Maryland
R who was
football player, came up with a genius plan. Plank,
1996 Year Founded
E
tired of having to change out of the sweat-soaked
P T-shirts he
725.2 Sales in FY 2008 (in millions)
wore under his football jersey, came up
R with a concept for a
form-fitting t-shirt that could regulate
body
temperature.
2,200 Number of employees
FOformer University of
Shortly thereafter, Plank and
Y
Maryland lacrosse player,P
Kip Fulks launched KP Sports
200
Price of Recharge Suit
from Plank’s grandmother’s
O basement in the outskirts of
17,000 Number of Stores that sell Under Armour
Washington, DC andC
began creating moisture-wicking TD
shirts. By 1996, Under
Armour had generated $17,000 in
2007 first specialty store opened
Eby word-of-mouth. A year later, Plank had
revenue purely
T
$100,000 in
to fill and moved his business out of his
INorders
2006 Launched Footwear Business
grandmother’s
basement
and into a factory in Ohio.
R
P
With European headquarters located in Amsterdam and offices in
I
$
Massive Brand
Exposure Wins Big Business
The Under Armour brand gained massive exposure when in
1999 the Oliver Stone movie “Any Given Sunday,” depicted
actor Jamie Foxx wearing an Under Armour jockstrap.
Beyond exposure in the blockbuster hit, a photo of Oakland
Raiders quarterback Jeff George wearing an Under Armour
mock turtleneck hit the front page of USA Today.
OCTOBER 2009
RISNEWS.COM
Hong Kong, Toronto and China, Under Armour will continue to concentrate on global expansion. The company announced that international revenues were up a healthy 51 percent in its latest quarter.
Another huge measure of success is that the brand is the official supplier to the NFL, MLB, NHL and major collegiate and high school
teams throughout the country. With positive reviews from players,
word-of-mouth continues to drive the demand and appeal for Under
Armour products and the business is skyrocketing despite tough times.
PHOTOGR
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U
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I
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FO
N
O
N that we could no longer
“We realized
O
keep making
modifications and
G
N
it was Itime to start looking for a
D
state-of-the-art
warehouse
A
E
management
system.”
R
AL
N
Mike Fafaul, Jim Calo and Eric Olsson (from left to right) roll out end-to-end inventory visibility.
O
S
R
E
Tech Adds Fuel to Brand’s
P Fire
In 2006, as Under Armour’s business
R boomed, Jim Calo,
chief supply chain officer, and hisO
F team recognized that its
warehouse management system was no longer able to scale
Y
to its business needs.
P
“We had a distributionO
system that we were constantly modifying,” says Calo. “WeCrealized that we could no longer keep
D and it was time to start looking for
making these modifications
E
a state-of-the-art
warehouse
management system.”
T
N
Calo wasn’t
the only one feeling constrained by its previI management
ous warehouse
system. “Our company needed
R
P that could keep up with
a system
our explosive growth and
PHOTOGRAPHED BY MICAHEL SEXTON
we had outgrown our previous system,” says Eric Olsson, director of distribution systems. “We needed a system that was
more automated and could scale to our different business
needs across independent stores and our direct-to-consumer
outlet stores.”
Under Armour ultimately selected a sophisticated
Warehouse Management System (WMS) from
Manhattan Associates and went live with the system in
April 2008 from its Baltimore-based distribution center. The company also added advanced slotting optimization technology, however it did so prior to rolling out Manhattan’s WMS. The system
was implemented at its footwear business first, which is smaller
than its apparel business.
“We were able to get footwear up without missing a beat,” says
Calo. “When we selected this system, the apparel process was
mostly manual. By the time the system was ready to incorporate
the apparel segment, much of the process had become automated.”
To achieve even further efficiencies, Under Armour’s pick-tolight area was recently converted from a “pick and pass” to a “zone
picking” system, which boosted efficiency by eliminating the
need for an operator to touch every order. Olsson notes that a pickto-light system is the company’s picking method of choice for fastmoving SKUs, followed by Radio Frequency (RF) picking for
medium-velocity items.
“We were able to hit record volumes quickly in our picking area,”
says Calo. “The most we ever processed with our old system was
140,000 units a day and by the summer of last year we were processing
more than 225,000 units a day. This was a great success.”
RISNEWS.COM
OCTOBER 2009
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TECH TOOL BOX
• Video Analytics: ADT
• Warehouse Management:
Manhattan Associates
• EEM: Manhattan Associates
• Order Fulfillment:.
CenterStone
•
N
O
TI
E-Commerce: Adobe Scene7
U
Omniture
• Analytics:IB
R
T
• Planning:
IS SAP
D
• Labor
R Management:
Manhattan Associates
O
F
Enterprise Resource
T
O
N
Y.
• Slotting Optimization:
Manhattan Associates
L
N
“We were able to hit record
volumes quickly
O
G area . ”
in our picking
IN
D
A
E
have pretty good
In addition to speeding up its picking
R visibility into when the Management from Manhattan Associates
product is coming.”
will be implemented later next year.
process, the new system has led to better inAL has also gained efficiencies that“With
Under Armour
Manhattan’s EEM, we continue to
ventory control.
N
involving
its
label
printing
processes.
“We
make
improvements
to the system,” says
Under Armour also rolled out
O
haveSbecome much more efficient since our
Calo. “Our next step will be to input mileManhattan’s
Extended
Enterprise
R
are now able to print UCC128
stones for the manufacturer so we know when
Management system (EEM), which proEmanufacturers
fabrics have been ordered, received and cut.
vides instant visibility for third-party lo- P labels right from their factories instead of having
to
rely
on
a
supplier
for
labels,”
says
Calo.
We can then estimate the time it will take for
gistics providers (3PLs) to manage order
R
O
“The system is as on-demand as you need it.
the product to be delivered. We believe we
fulfillment, shipments and inventory.
F
Before implementing the system, the product
can cut down on lead times and better service
EEM provides Under Armour with end-toY
may
have
been
ready,
but
it
was
held
up
if
we
customers.”
end visibility of orders, shipments
and
inPdelivery, so didn’t have the label. We can now reprint a la- ourCalo
ventory from sourcing to cargo
adds, “Last year, Under Armour
O
bel if it smudges or if it contains errors right
it is able to watch theCentire shipping
reported record sales and we are pretty
from our system. Additionally, price tickets,
process and can trackD
and monitor supply
confident that we would have not been able
E
which
used
to
be
ordered
in
bulk
quantities,
chain events as they
happen.
The
retailer
to service our business if we had not impleT
N immediately based can now be printed as needed.”
also can now Irespond
mented
the
Manhattan
Warehouse
on alerts to critical
exception
events.
Management
system.”
R
Pnow
“We can
see when the manufacturer
Building a Future for
With continuous worldwide exposure,
has shipped the product and when it has
moved to our consolidator, which then recognizes it has the product,” says Calo. “We can
now see the product move across oceans and
Success
In the future, Under Armour will continue to
upgrade its WM and EEM solutions. Under
Armour also recently purchased Labor
state-of-the-art technology and innovative
product lines, Under Armour’s empowering
success story is far from a journey based on
happenstance. RIS
(#19692) Reprinted from the October 2009 issue of Retail Info Systems News. © Edgell Communications, Inc.
For more information about reprints from Retail Info Systems News, contact PARS International Corp. at 212-221-9595.