Analysis of a University Athletic Equipment Inventory System by Brian Sather BA 540 Management & Organization, Eastern Oregon University May 11, 2010 A university recreation and athletic program houses and maintains several items of sports equipment. There are balls, towels, bats, uniforms, football equipment, and many other sports equipment that is placed in and out of use continuously throughout the year. The inventory, monitoring, and control of these items is very important for ensuring fiscal viability of the program. Even at a small college like Eastern Oregon University (EOU), an equipment manager position is a full-time endeavor. Information in this analysis was gathered through a May 2010 interview with Brian Avila (Sather, 2010), the EOU equipment manager of 25 years. What follows is an examination of the process and recommendations for improving the system. Sporting equipment goods are a static inventory that is placed in and out of service mostly on a seasonal basis. The equipment is offered as a service to athletes, similar to a rental system in other businesses, except that there is no direct charge to the consumer for the use of the item. A good process must be in place to track the stock as it changes hands several times throughout a year. Ordering of equipment takes place usually once a year, at the beginning of the budgetary fiscal cycle or at a given interval before the start of a sport season. A static inventory creates a challenge because it is especially important to order the correct items in the correct quantities because it is a one-time-shot (Starr, 2009). The ordered items must last the entire year or longer, like in the case the three-year cycle for uniform usage at EOU. Furthermore, the items must be ordered with ample lead time before the first practices or games of the season. A breakdown in this process can be relatively catastrophic. For example, a team without uniforms or game balls for the first game of the season is in deep trouble. The system must ensure nearly 100 percent reliability. A major concern with static inventory is the importance of selecting the right product and supplier. Avila referred to the importance of "trust" in working with vendors (Sather, 2010). Developing a rapport and longstanding relationship with trusted vendors is paramount to his success. The vendor must consistently deliver the goods by the date promised, according to the specifications in the order. Trust is more important than price in decisions on vendors. Another important factor is location of the vendor, whereby vendors from the nearest large cities of Boise, Spokane, and Portland are preferred. The proximity of the supplier is important from a transportation delivery standpoint, but also from social support and live personal with the vendor. A few years ago, EOU decided to sign a contract with Adidas for all uniforms and shoes. The use of a dedicated contract for a supplier has pluses and minuses. On the plus side, not much effort and time is expended shopping around or bidding for different dealers of uniforms, shoes, and other clothing. On the other hand, better products or less costly products are not an option under the contract. These pluses and minuses should be examined periodically to systematically determine if a new supplier should be used exclusively or if a return to the open system is warranted. In order to maximize uniform use on a constrained budget, a three-year cycle is used for uniform orders among teams. Each team orders new uniforms on a three-year rotation that is staggered. This requires the purchase of a higher quality uniform so that they are more durable. This comes at a higher initial cost. Furthermore, the long uniform use cycle requires tighter control of the uniform inventory checkout system. Buffer stock is maintained on certain uniforms and other equipment. Since the 3-year cycle can result in uniform damage or loss, it is important to order extra uniforms or keep a few in reserve storage. Avila purchases additional shorts or pants because pant sizes are more sensitive to the person and they are generic (i.e. no uniform number printed), and thus can be shifted to other uniform tops. Lead time is typically 6-8 weeks on uniform and equipment orders. This requires advanced planning with coaches to ensure orders are placed with enough time to put the equipment in use for athletes. The fiscal cycle starts in July, which makes for a very tight schedule on ordering equipment for Fall sports. Everything must be arranged and ready to order so that payments can take place immediately after the fiscal period starts. In some cases, the rapport and reciprocal trust of vendors allows for pre-orders to ensure equipment is delivered on-time given the constraints of fiscal policies of the university system. Avila exercises a lean strategy for inventory storage. Equipment is checked for quality and order accuracy upon arrival, and distributed to the coaches as soon as possible. Most items are moved into use as quickly as possible in order to avoid having idle stock locked in storage. There is a limited stock storage in the main equipment room that allows for immediate access to seasonally active uniforms and equipment. These items are checked out and in use during the season and then checked back into storage for the following season. Out of use and retired items are stored permanently in the "dungeon," a secondary back storage area that serves as a mothball for equipment and uniforms. Storage space has not yet been an issue and this has no extra cost associated with it. Theft is very common concern with sporting equipment as noted by Avila. The equipment room has key access limited to only by a few select individuals. This area is internal in the building, requiring several door and key layers to gain access to the equipment. The system seems to be a good deterrent for from theft as Avila indicates theft has not been a major issue. Of particular concern is the occasion when a coach moves to a new position or their contract is not renewed. Often equipment pilferage occurs since these coaches sometimes cease to oversee or care about their equipment. A coaching change is a red flag for Avila to proactively take inventory of items and secure their storage until the new coach can take control of this function. The checkout of uniforms is an ongoing process just like rental systems alluded to earlier. EOU launders all uniforms to reduce damage due to faulty laundering practices. Avila uses a paper-and-pencil team roster for a game and checks out uniforms prior to games. All items are marked with a number corresponding to the players game number. Players numbers operate as a convenient stock keeping unit (SKU) system because of the semi-permanent attachment is has with the player. The public recognition of the number and legal requirements in the sport offer a year-long association between the number and the person. After each game, the same check sheet is used to return uniforms. The cyclical nature of sport seasons lends itself well to periodic inventory, which is preferred over perpetual inventories by some companies that operate on phases or periodic order systems (Starr, 2009). "The market drives actions in the perpetual; the calendar drives actions in the periodic" (p. 583). In a way, athletic equipment inventories should follow a hybrid of perpetual and periodic order systems, given that some equipment is under continual use and checkout, while others are ordered and used on a season basis. A distinction used in the sporting goods inventory is "in-use" and "in-stock" inventory (Horine & Stotlar, 2004). Avila's self-described "old-fashion paper-and-pencil" approach has served him well. Sales invoices and receipts are kept on file and also maintained with the athletic accounting manager. EOU owns computer software that allows for keeping inventory of items, but Avila is more comfortable with the current system. Use of a department-wide computerized inventory would allow for better tracking of equipment to inform purchasing decisions and monitor the cost of carrying inventory (e.g. pilferage, obsolescence, deterioration, and damage). Since the equipment responsibilities are delegated to more than just the equipment manager (e.g. coaches, intramural and recreation director, physical education instructors), a computerized approach would coordinate the system better. However, the cost of implementing this system along potentially cumbersome nature of tracking items (e.g. use of scanning, SKU entry) and working with the software would likely outweigh the benefits at Eastern Oregon University. At the very least, a periodic department-wide inventory counting should take place at least yearly to assess all inventory, regardless of whether this is done by computer or not. In summary, the following best-practices concepts were gleaned from the interview with Avila, whose years of experience serve as a testament to his effectiveness: A simple effective system is to use a one-time check-out and check-in sheet each time items go into use. Use players' uniform numbers as a yearly SKU system to couple players with their equipment. Delegate equipment to coaches that have control over their budget, because this provides incentive to keep and maintain their goods. Above all, choose suppliers that are trustworthy. Keep very few idle inventory items in storage. When purchasing uniforms, order extra pants as a flexible buffer for size differences and damage protection. Keep sporting equipment storage areas centrally located, behind a lock that few people have keys for. References Horine, L. E., & Stotlar, D. K. (2004). Administration of Physical Education and Sport Programs, (5th ed.). New York: McGraw-Hill. Sather, B. (Interviewer) & Avila, B. (Interviewee). (2010, May 11). Interview with Equipment Manager for University Athletics [Interview audio podcast]. Retrieved from http://www.unicommons.com/subjects/physical-activity/sport-management-0 Starr, M. K. (2009). Production and Operations Management, (2nd ed.). Independence, KY: Atomic Dog.