Since the Theodore Roosevelt administration, Delta Apparel has been manufacturing high quality knitwear. And at no time in its lengthy history has business ever been better.

In April, Delta closed out its third quarter and reported a net sales increase of 19% to a record $69.4 million. The Duluth, Georgia company boosted business through strategic acquisitions, growth in distribution, and process improvements surrounding inventory.

“Having the right inventory in the right warehouse so the customer can place an order and get it shipped the same day has made all the difference,” said Charles Sutlief, president of Delta’s activewear division. “We have always had a process improvement team. Now, we’re putting more of their focus on things that impact the service a customer gets—distribution centers, back office functions, customer service, credit, etc. We’ve always made a high quality product at a fair price. That, combined with our customer-centered efforts over the last 24 months, has produced record results.”

Acquisition strategy
Delta Apparel is a manufacturer, marketer, and distributor of high quality branded and private label activewear, including tee shirts, athletic tops and bottoms, and fleece products. The $210 million company distributes to specialty and boutique stores, high-end and mid-tier retail stores, sporting goods stores, screen printers, and private label accounts.

In 2003, Delta acquired MJ Soffe Company, a growing apparel manufacturer with a strong foothold in the teenage girls market thanks to its enormously popular line of cheer shorts. After integrating Soffe’s operations, Delta saw near instantaneous results: from 2003 to 2004, revenues increased 61% from $129.5 million to more than $208 million.

In 2005, Delta continued on its path of growth through strategic acquisition when it purchased Junkfood Clothing, a rapidly growing nostalgic tee shirt company. Both Soffe and Junkfood fit Delta’s strategy: acquire profitable apparel operations that also expand channels of distribution.

“When we started, we had only one warehouse in the US, and we sold primarily to distributors,” Sutlief explained. “We made a strategic decision years ago to eliminate the distributor—the middle man—so people can buy directly from the mill. Now, we have four distribution centers, and we’re closer to our customers so they can get their deliveries in one or two days anywhere in the US.”

By integrating its operations with Soffe’s, Delta was able to create a coast-to-coast distribution network. Delta merged its operations into a new New Jersey DC with Soffe, Soffe merged with Delta’s Florida DC, and the two companies consolidated their California DCs into a single expanded capacity warehouse. Today, Delta has DCs in Santa Fe Springs, Cali.; Clinton, Tenn.; Miramar, Fla.; and Cranbury, NJ.

Same-day deadline
With a nationwide distribution network in place, Sutlief and his team set out to streamline operations and improve processes to enhance the customer experience. The organization’s major goal was to be able to complete any order received by 5:00 p.m. local DC time and ship it out the same day.

Delta started by taking a lean look at all of its processes and mapping them out. “When we first started, we found a lot of lag time,” Sutlief said. “There were lags in order entry, for the credit department to release the order and hand it off to the DC, and so on.”

Through a combination of technology and employee incentives, Delta was able to remove the waste and enhance efficiency. The company added a document imaging system to facilitate taking orders via e-mail and fax and enhanced its Web site to streamline paperless order acceptance, eliminating a mountain of paper and time from the process. Delta also added a data warehouse system to provide real time information on processes 24/7.

The company also implemented a full inventory tracking system in its supply chain. The system allows the company to track everything throughout the manufacturing process, from a spool of yarn to a finished case of garments. The company topped off its technology initiative with an RF system at its distribution centers.

“We know where everything is throughout our entire supply chain,” Sutlief said. “We know exactly what is on each container because everything is moved by scanning and barcodes. That allows us to get our hands on our product faster and rapidly meet our customers needs.”

Roughly 18 months ago, Delta was able to meet approximately 93% of the demand for same day shipping. Now, with the process improvements in place, the company is consistently at 99.5% and higher. “We focused on each department and helped them understand their role in the timeline,” Sutlief said. “We implemented new technology and created friendly competition with incentives among the DCs. As a result, we’ve cut times and improved our ability to serve our customers, and activewear apparel reported all-time record sales of $36.6 million for the third quarter of fiscal 2006.”

Growth platform
Delta’s initiatives not only helped produce record third quarter results, they helped build a platform for continued growth. The company forecasts fiscal 2006 sales to be in the range of $268 to $275 million, up from $228.1 million in 2005.

“Our product offerings are being well received by the marketplace,” said Delta Apparel president and CEO Robert Humphreys in a May press release. “Demand for our core Soffe shorts is strong as our sales continue to exceed prior years. Junk food continues to successfully grow its sales with the addition of new products and licenses, as well as the expansion into additional retail outlets. We continue to explore growth initiatives, diversify our product offering, increase our operating efficiencies, and identify cost saving opportunities in each of our key business segments to expand margins and maximize our performance.”