It’s the week of Thanksgiving and I have been trying to come up with a suitably themed post. I thought of doing poultry production planning (The Turkey-Industrial Complex, Slate Nov 23) but have settled for talking a little football. I am the only American in the Kellogg Ops group. So I am the only one who realizes that Thanksgiving means over-eating and watching football, more specifically, watching the Dallas Cowboys (because it hurts too much to watch the Lions). My colleagues think Roger Staubach is a real estate developer.
Anyway, the Cowboys offer a chance to talk a little supply chain. Unlike every other team in the NFL, the Cowboys handle all of their own merchandising. While every other team counts on Reebok to produce and distribute their jersey and hats, the Cowboys do it all for themselves. The following video gives an idea of the scope of their operations:
What’s interesting about this is the scale that at which the Cowboys are operating. I appreciate that Jerry Jones, the Cowboys’ owner, is a shrewd guy and has always been mindful of not giving away the farm to the league. However, one wonders how Dallas on its own can match the efficiency of Reebok serving the entire league. Yes, they don’t have to give Reebok a cut of their sales but is that savings enough to generate a real return on their investment? And it is a sizable investment. Computerworld (BI visualization tool helps Dallas Cowboys sell more Tony Romo jerseys, Oct. 8, 2009) reports:
The team is building a 400,000 square-foot headquarters for its merchandising arm near the Dallas-Fort Worth airport that is expected to open early next year. That will replace and double the 180,000-square-foot warehousing space that is scattered over three buildings.
On top of that, they have spent a chunk of change on software. It is hard to imagine that one team can generate the volume to really exploit all this. (Besides, would you make an investment that was dependent on how well Tony Romo was playing?) Indeed, the Cowboys are now branching out. They already handle apparel and merchandising for several university (including Arkansas, Jerry Jones’ alma mater). It will be interesting to see how this pays off for them.