We caught up with TaylorMade Europe Managing Director David Silvers to find out how 2018 had been for the brand.
It’s a massive undertaking to reverse out of a huge machine like Adidas. We’ve had a lot of support from our new owners KPS, and fantastic cooperation from Adidas. Our sales are up in every region in the world, in every product category through the bag.
The positives are our retailers can see that we are still investing in innovation. We’re still investing in launching new products in a big way, investing in driving people into store, and investing in making sure we’re validated by the best players in the world. Ultimately these are the things that help them sell more products at a greater margin.
But there have been a few teething problems. Operationally the biggest problems have been around the M3 and M4 launch. We underestimated the surge in demand when we lifted the embargo on Twist Face. The embargo lifted early-Jan, the product released in Feb, and the order book went through the roof. The capacity we needed to ship product in that next six-week period was much greater than we had anticipated.
At the same time, Adidas used to ship our soft goods for us. The plan was always for that to come into our Basingstoke warehouse but there were some practical challenges that we weren’t expecting.
The combination of the soft goods coming into the warehouse and the demand for the M3 and M4 meant we had to ship four times as much product in a four-week period than we ever had before. We were shipping 24/7 for a month. We had delivery problems and the paperwork problems that came with that. This wasn’t acceptable to our retailer base. Then we quite rightly got a snowball effect of phone calls. and it becomes hard to resolve everything for everyone at the same time.
Being easy to do business with and getting orders right the first time are just as important as the marketing of the product. Ultimately, we hand the product over to retailers to sell and we want them to want to sell our product. To do that we need to be reliable, trustworthy and easy to do business with.
We’ve invested a lot of money in to our Service Transformation. We want to flawlessly execute our launches next year, and I’m very confident we will do that. We know we’re going to grow again, we’ve got great products coming next year. We’ve been true to our mantra of relentlessly pursuing innovation and next year’s product Is measurably better than the product It replaces In our ‘M’ metalwoods, irons and our premium golf ball. We know there will be a surge in demand and importantly we have to do a lot of our business in a short space of time.
Being easy to do business with
TaylorMade set out on a process of Service Transformation which involved investing in three key areas:
Jesse Otis, Operations Director, at TaylorMade explained to us why changes have been made. “We’ve embarked on a top-to-toe evaluation of our custom order process. Our efficiency has increased massively already and is providing a better quality of build than we’ve ever done before. 70% of iron sales this year have been custom. We want to surpass every other manufacturers custom order process in quality of build and speed of completing the order.”
How have they done that? They’ve invested. Firstly, in a third new Bullseye digital loft and lie machine at the cost of a $250,000 By adding a third Bullseye, it allows TaylorMade to open a further two production lines for six in total. Their custom order business grew 20% this year, but they are anticipating a further 35% increase next year.
Jesse explained what other measures had been put in place. “Golf is seasonal, so traditionally a lot of the staff in the clubmaking department have been as well. There is four times as much custom production in May as there would be in December. We’re offsetting these fluctuating staff levels by bringing more of our stock clubs in to the UK in component form, so that the production lines can be kept busy in the offseason, and we can keep a bigger base of permanent staff.”
“You never know how hot a product is going to be until it is unveiled to the public,” explained Jesse. We have recently added new stock procurement tool that recognises trends and will allow us to react much faster to changing demand for products. David talked about investment, this single tool has cost $760,000.”
“We are providing our team with the information so they can predict what is going to happen, to be proactive before any issue arises. We want to be able to have proactive conversations with our retailers and not reactive ones.”
A team from KPS Consultants have helped TaylorMade shape and transform the distribution process. “They have helped unlock the potential of the people,” explained Jesse. “The team have daily targets, and a single complaint about a custom order triggers an investigation into where in that production line that problem arose, and how to make sure it doesn’t happen again.
“One example would be a set of clubs that came out at the wrong length. The clubmakers no longer have to manually work out the maths, instead the order is automated. They are no longer able to cut the shafts unless the correct jig for the shaft cutter is scanned into the system. We’re removing human error wherever possible.”
To further improve their service TaylorMade are opening a new 90,000ft2 warehouse in Portsmouth that will be four times the physical size and capacity of the Basingstoke warehouse. Hard goods will still ship out of Basingstoke, but soft goods, accessories and golf balls will ship out of the new warehouse.
“We are anticipating growth in the business next year, and this gives us flexibility. For example, we are keeping deeper stock of shafts to make sure we don’t have problems arise with custom orders. We can now hold that stock without it causing capacity issues at Basingtoke.