Supply Chain

Up at Bat

Hillerich &spamp; Bradsby, maker of the iconic Louisville Slugger baseball bat, is looking for more, better, and faster, says CFO Lawrence Writer.
Alix StuartJanuary 5, 2012

Hillerich & Bradsby is the unassuming name behind a powerful American brand: baseball’s Louisville Slugger. With about 70% of Major League Baseball players using the company’s customized wooden bats and hundreds more athletes using its other products, including Bionic gloves and Powerbilt golf products, the company has long been at the top of its game. Now with more than 250 employees and an international reach, Hillerich & Bradsby remains in its original Louisville location, where it started by making wooden butter churns, bedposts, and bowling pins.

Recently, the 127-year-old family-owned firm brought in a new CFO and COO, Lawrence Writer, to help oversee day-to-day operations and expand its global footprint. Writer, whose pedigree includes positions at Wells Fargo, Goldman Sachs, and The Carlyle Group, was most recently a director at consulting firm AlixPartners. He worked with Hillerich & Bradsby as a consultant for about six months before joining the organization full time, “kind of an extended job interview,” as he says.

Drive Business Strategy and Growth

Drive Business Strategy and Growth

Learn how NetSuite Financial Management allows you to quickly and easily model what-if scenarios and generate reports.

Overseeing finance, credit, supply chain, IT, and corporate strategy, Writer is working closely with CEO John A. Hillerich IV, the fifth generation of the family that has owned the firm since its founding. Here, in a recent interview edited and condensed for publication, he talks about how he is tackling his new role.

What are your top priorities coming into the job?
This company is at its heart a manufacturing company. So my main focus is really looking at how we make sure we’re getting the best product to the right customer at the right price. We’re looking at new ways [to] leverage what is an amazing legacy of wood bats and Major League Baseball. At the same time, we want to be innovative in nonwood bat technology and gloves, and we’re growing our social-media campaign to get our name out there for the next generation of baseball players.

To that end, we are implementing a different calendar to get our product to market faster, and looking at what that means for all the pieces of the pie. How does that impact supply chain and delivery of product? In turn, what does that mean from a forecasting perspective? And then you want to make sure that all of marketing is aligned with operations.

So what does the birth of a baseball bat look like?
All of our wood bats are made in the U.S.; they’re made downstairs [in the company’s headquarters, where corporate offices are also located]. We own about 6,000 acres of land in New York and Pennsylvania, and do our best to source the wood — ash and maple — from there. Whatever wood we cannot source from our land we buy on the secondary market. So, indirectly within the supply chain, I have foresters and lumberjacks working with me.

The billets, or 3 inch–diameter dowels from the inner part of the tree trunks, are dried, prepared, and then shipped out to us [in Louisville]. From there, they’re made very quickly: [the process is] all computerized, but the staining and engraving, etc., is all done by hand, also in Louisville.

It’s fun. We have a board up where they’ll write, “Now making bats for Derek Jeter” or whomever. Each player will have a model on file; we often sign players to contracts when they’re in the minors and work with them as they progress to the majors. There’s a model room here where you can see models from when Babe Ruth used bats, [and where players] can create their own. For example, Jeter has a very thin grip on his bat. The difference between what players like is huge.

Your wood bats run under $100, and then you have aluminum and composite bats that can top $300. Does such a wide range of prices create any product conflict?
We sell a performance product. Performance is a differentiator not only between us and our competition but also [within a given price and materials category]. The products are also substantially differentiated at those different price points, so there’s not a lot of overlap. If you’re looking at a $199 bat, the next bat around $299 is substantially different from a materials and performance perspective.

Do you need to carry special insurance to protect against injuries or damage that might occur when the bats break?
Major League Baseball requires bat makers to have liability insurance in order to supply bats to MLB players. But broken-bat injuries are extremely, extremely rare. Teams also have liability insurance to cover fans that might be injured from a foul ball, flying bat, etc.

What is your international market like now, and what are the opportunities?
Baseball is primarily a U.S. sport. We do very well abroad, with our primary market being Asia: Taiwan and Japan, and some in Korea. In Europe, you’re just not going to beat soccer. Then we have some special products we make and sell throughout the Caribbean, Mexico, and Latin America. Our price point in the Caribbean is completely different; customers there are much more price-sensitive.

It sounds like elements of your supply chain are global?
Yes, some of our nonwood bats are made outside of the U.S. We used to make aluminum and composite bats [domestically], and have moved them slowly over time to Asia [primarily China and the Philippines]. It’s a partnership: we’re adamant about partnering with our vendors there in making a truly great product. And it’s tough to do from a distance. I’ve been here six weeks [as CFO and COO]; one week of that time was in China meeting with our partners.

What role do you play in helping the company with its innovation agenda?
You have one product season a year; you get one shot. So we launch each season with an innovation summit. We pull in not only our test engineers but people from all aspects of the business and outside the business. We talk to coaches, players, and people throughout the industry. When you have products that are made abroad, we have to calendarize, to allow time for [quality testing] and certification processes [for Little League standards and so on]. So we try to release a new product idea around the College World Series, which is in April, and then have new products in place for selling season, which starts in the late fall. Then we are meeting as a company a couple times a year around innovation.

What can the finance department in particular do to support innovation?
Bringing a business mind to innovation decisions is very important. If you acted on every single idea, [a business could] die of overinnovation. And in the end, you may have nothing to commercialize. There is a finite bucket [of resources], so you have to work with other leaders to prioritize some initiatives. I work across the organization, with product developers, marketing, and R&D, asking where are we spending money and what does it mean for the long-term health of the company. I look to my team to understand that if we’re going to make an investment in R&D or marketing, it makes sense — that it’s truly an investment and not just an expense.

So do you love baseball?
I love all sports and I really like baseball. My son, who is nine, plays baseball and loves it; he’s probably the only person more excited than I am about this job.