Jim Calo: Under Armour’s Over Achiever
Active people look to Under Armour’s clothing, footwear, and sports gear to help them stay at the top of their game. Since last October, Jim Calo has been giving Under Armour a similar boost.
As the Baltimore firm’s first chief supply chain officer, Calo spends much of his time with the operations team, scouting for processes that don’t perform as well as they could and turning them into winners.
Take the garment manufacturer who needed a 98-day lead time to deliver product.
“We wanted to reduce that to 60 days, then 45, and ultimately 30,” Calo says. So early this year, he and his team started placing orders with that supplier weekly instead of monthly.
With smaller, more frequent orders, the garment maker – and, in turn, the fabric mills and trim manufacturers he relies on – can deal more efficiently with customer demand fluctuations.
“It’s easier for them to make up for a 10-percent swing on a small number,” Calo says.
Calo started his career as an accountant, but an early job at a Polo Ralph Lauren factory in Lawrence, Mass., steered him toward a career in supply chain management. Although his mandate was to manage the books, when he expressed a desire to get more involved in the business, the facility’s general manager was grateful for the help.
“He let me work with him in different areas,” Calo says. “I was given an opportunity to support customer service, IT, shipping, and the fabric department.”
When Polo Ralph Lauren closed that plant, Calo moved to Greensboro, N.C., to support one of its distribution centers.
One challenge Calo faces at Under Armour stems from the fact that most of its clothing – known for managing body temperature and wicking away moisture – consists of man-made fabrics.
Import fees on these products are higher than on the largely cotton apparel lines sold by Calo’s past employers, Polo Ralph Lauren and Nautica/VF Corp.
“On some products, the duty runs as high as 32 percent,” Calo says. So an item that costs $3 to manufacture in Asia actually costs Under Armour $4 with the duty included.
One possible solution is “bringing products closer to the United States under the CAFTA and NAFTA treaties, which can reduce costs,” he says.
As he works to fine-tune Under Armour’s supply chain operations, Calo seeks more transparency between the company and its suppliers.
Calo’s plan is for Under Armour to commit to providing a certain volume of business to a supplier. In exchange, the supplier would calculate its prices based on mutually agreed metrics, without a lot of negotiation.
As one step toward greater transparency, Under Armour is developing a Web-based system to provide complete technical specifications for products, so suppliers can get all the information they need to develop bids without exchanging myriad e-mails.
“Changes to the specs are highlighted as soon as they are made,” Calo says. “So the manufacturer doesn’t have to go through the whole package again to determine what might have changed.”
Calo is excited by the kind of partnerships companies can attain through greater openness, “where you extend your company into your suppliers’ operations,” he says. “Suppliers, in turn, would forge similar bonds with their own vendors.
“This network is set up as though your company owns it, but it doesn’t,” he explains. “It’s virtually vertical.”
The Big Questions
What do you do when you’re not at work?
Whenever I can, I spend time with my wife and kids.
Ideal dinner companion?
Apart from the family members and friends who are my true ideal dinner companions, I’d say Bobby Orr. It’s not just because he played for the Boston Bruins, but because he had a reputation – and still does in Boston – for being an outstanding guy. He is a true team player and a humble individual, both great qualities.
What’s in your briefcase?
A laptop cord; reading material; family photos; DVDs of our sales presentation; my passport; Under Armour catalogs, because someone always asks for one; a calculator; new Under Armour sunglasses; and an electrical adaptor for travel.
“Universal guarantee of performance.” Universal means we don’t make non-performance products. Every Under Armour product does something for you; it makes you better.
If you didn’t work in supply chain management, what would be your dream job?
I’d be a professional athlete. It could be in any sport – baseball, hockey, football, golf. I like them all.