2005 Supply & Demand Chain 100 Case Study  Under Armour Performance Apparel / Demand Management, Inc.

Profiles in Supply Chain Enablement: Sports apparel company adopts demand management solution to flex its forecasting muscle.

Profiles in Supply Chain Enablement: Sports apparel company adopts demand management solution to flex its forecasting muscle.

Company: Under Armour Performance Apparel (Baltimore, MD)
Company Size: Medium
Company Sector: Manufacturing (Apparel)
Area(s) of Enablement: Order/Demand Capture (Demand Management & Forecasting)
Enabler: Demand Management, Inc. (St. Louis, MO)

SDCE 100 2005Case Study: When moisture protection is on the line, Under Armour Performance Apparel delivers, tackling the moisture that can sap an athlete's endurance.

And when the Baltimore-based specialty apparel company went looking for a high-performance forecasting system, Under Armour turned to Demand Solutions from Demand Management, Inc. (DMI) to deliver a crucial score that allows the $115 million company to keep abreast of changes in the marketplace and to fine tune its product mix to accommodate those changes.

Replacing Spreadsheets

Under Armour grew quickly from college football player Kevin Plank's idea in 1995 to use the Lycra material on compression shorts to make performance t-shirts that wick water better than cotton shirts. Until recently the company's forecasts were done on Excel spreadsheets, which had become unwieldy, according to Chief Information Officer Scott Plank, Kevin's brother.

Demand Solutions Representative Paul Secraw had contacted Under Armour a few years earlier, but the company was not yet in a position to buy a forecasting system. "We kept in contact with them, and when they made a decision a year ago, they wanted to partner with a solutions provider — not just a package, but a partner who could bring both the tool and process to the table," Secraw says.

In the year preceding the selection of a software vendor for its forecasting needs, Plank says the company embarked on a training program for its sales staff on the principals of forecasting. Quality data help ensure a quality process, Plank notes. "What we needed was not a computer package on how to build product, but to educate and train the sales force and product developers to calculate demand for the product."

Taking a Collaborative Approach

Secraw and Under Armour's Manager of Demand Planning, Scott Knick, agree that a consensual collaborative process involves three parts: people, process and a tool or a system to bring it together. The triad works together, much like a three- legged stool, Secraw notes. Appropriately enough, Under Armour chose a trio of Demand Solutions products for its forecasting needs: Demand Solutions Forecast Management (DS FM), DS Feedback and DS View.

DS FM provides the foundation for the other tools and is used primarily for the demand side of the business. Unlike some larger, more expensive forecasting systems, no single formula is arbitrarily forced in DS FM. The formula that best addresses each item's demand pattern is selected to forecast that item, mimicking the way people make purchasing decisions.

"Our demand curve is extremely accelerated relative to other businesses," says Scott Plank, noting the company has grown at a furious pace over the past few years. (Under Armour Performance Apparel ranked second on the 2003 Inc. 500, an annual rating of the fastest-growing private companies in the country. Under Armour reported an astounding 12,753 percent growth over that period.) "Our growth rate has been dramatic and geometric, and a fuzzy logic package wouldn't cut it for us," Plank says.

Internal and External Users

DS FM feeds a material requirements planning system at Under Armour for inventory and both its domestic and international production facilities, Knick says. DS Feedback is used externally by the company's outside sales staff but offers the same visibility as DS FM with the ability to share information electronically. DS View is used internally for reporting and analysis, according to Knick. "It provides us with better business visibility and intelligence to make the decisions we need to make," he says of Demand Solutions. "It converts data to information we can use."

Knick reports no snags in implementation. "The flexibility of the system enabled us to build the database fairly quickly," Knick says. As part of the rollout, Secraw assisted Knick with a week's worth of classroom training for users. After the system went live Knick has been conducting follow-up one-on-one training as needed as part of continuous process improvement.

"At a number of companies senior level executives don't understand that forecasting starts everything," Secraw says. "In Under Armour's case the executives realized the value from the beginning."

Once employees have had more experience on the Demand Solutions forecasting system, Knick plans to poll the "super" users, those who are using the software to its fullest, to gain feedback and suggestions on how to make the system more robust. Knick anticipates that many of the tweaks to the software can be made in-house without help from information technology professionals.

Making the Right Call

As the compression-apparel market matures, accurate forecasting will continue to drive market changes that allow Under Armour to stay ahead of changes in the market, allowing the company to keep up its tradition of bringing innovative products to the markets.

The market intelligence that Demand Solutions produces certainly helps Under Armour make critical decisions. But when the game is on the line, the quarterback often will call an audible in response to the defense he sees across the line. That analogy holds true at Under Armour Performance Apparel.

"As the category becomes more proven, there will be a time when forecasting becomes a more important factor for us," Plank says. "But regardless of our forecasting resource, we're still going to grow the business as we feel fit."

For more stories of successful supply chain implementations, read the "2005 Supply & Demand Chain Executive 100" article in the June/July 2005 issue of the magazine. Also watch the Today's Headlines section of SDCExec.com every Tuesday and Thursday for more in depth best practices drawn from this year's Supply & Demand Chain Executive 100.