By the time the Boston Red Sox won Game 4 to sweep the Colorado Rockies in the 2007 World Series, New Era had already...
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created products to commemorate the occasion.
New Era refers to events like the World Series as "hot markets," and filling customer demands in these markets is critical for the Buffalo, New York-based apparel maker.
"You really do anticipate orders even before they come in, and that's how we are able to do it so quickly," said Dana Marciniak, New Era's corporate communications manager. "We have plants all over and people working three different shifts, and we get [products] out quickly."
Serving customers quickly and efficiently has become more challenging as New Era grows and becomes a more global organization. The longtime Oracle-PeopleSoft customer realized it needed a technology upgrade to keep up, according to Jack Mehltretter vice president of IT for New Era.
"We saw a set of functionality that we needed to improve on," he said. "We asked ourselves: Do we continue to make investments in PeopleSoft technology that has a relatively short life?"
The answer to that question turned out to be "no." So in the second quarter of 2007, New Era set out to find new technology.
That didn't necessarily mean New Era would ditch Redwood Shores, Calif.-based Oracle -- the company considered other Oracle products -- but in the end that's what happened.
"We had conversations with Oracle and SAP, and we felt that SAP was better aligned with what we were trying to do," Mehltretter said.
Oracle and SAP have been in a pitched battle for customers and market share, especially in the retail sector. The companies engaged in a well-publicized back-and-forth struggle for retail software vendor Retek, which Oracle eventually won. Oracle continued its acquisition spree with the purchase of privately held ProfitLogic, while SAP countered by purchasing retail lifecycle price management (RLPM) vendor Khimetrics in late 2005. Both SAP and Oracle have had their share of retail wins since.
New Era has been in business for more than 85 years. It sells more than 35 million hats per year, in addition to other sports gear, and counts 1,900 employees worldwide. While its biggest seller is major league baseball hats, the company also licenses minor league baseball, National Hockey League and collegiate apparel.
The company has a large number of complex SKUs (stock keeping units) because of the many size and color combinations of its products and the fact that it has a lot of seasonal offerings, including back-to-school and holiday items, Mehltretter explained. With this complexity, New Era wanted a technology provider with a long history in apparel.
Mehltretter was impressed by SAP's 10 years in the apparel business and its long list of customers, including 11 of the top 15 companies. The fact that SAP's apparel offering is on its sixth version gave New Era comfort that it was around for the long haul, he said.
Still, New Era looked at some smaller technology providers for the project as well, but the company was unable to find a complete, end-to-end solution. For example, New Era saw companies that had good product management functionality but not global financial capabilities, according to Mehltretter.
In the end, SAP was the clear winner.
"I couldn't find anyone else who had an end-to-end solution with the functionality [New Era needed]," he said. "And the thing I kept coming back to was [that] the penetration that SAP has in the apparel industry is so different than everyone else."
The company will implement SAP All-in-One as part of its "ICE" (improved customer experience) project. By the time phase one is complete, New Era will be running All-in-One AFS (Apparel and Footwear), including SD (Sales and Distribution), Materials Management, FICO (financials and controls), PP (Production Planning) and BI (Business Intelligence).
"We need a degree of flexibility so we can meet the requirements of our numerous customers and suppliers," Mehltretter said. "The All-in-One solution being pre-configured allows us to leverage the best practices others are using."
New Era started the project in October and plans to go live in the second quarter of 2008. Phase one will include only North America and Europe but will go a long way toward achieving New Era's goal of becoming more global, Mehltretter said, as all customer-facing documents for the regions will be made available in the local language and currency.
When the project goes live, New Era will look to improved customer interaction for its ROI, rather than specific technical upgrades.
"Any time you look at an ROI on a project like this there's two approaches: There's the tactical side, which are internal improvements, and there's strategic, which is really improvements for your customers," Mehltretter explained. "We've focused very heavily on the partnership with our customers, and we have very high confidence that we're going to get good return from our customers."
In phase two, New Era plans to implement SAP SRM (Supplier Relationship Management), and the combination of products will dramatically improve New Era's integration with partners -- reducing lead time and improving order fill rates and on-time delivery.
"We're going to integrate closer with our customers and closer with our suppliers," Mehltretter said. "[We're going to] give our partners the ability to see what's going on in our environment and [relate it] back to their environment -- raise the transparency to raise the speed."