Sports Obermeyer Case Study Solutions
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Sport Obermeyer Case. How many items should Wally Obermeyer order during initial phase of production? The main problem of Obermeyer company is that they have to deal with unpredictable demand to some point in time (before the trade show in Las Vegas) and limited production capacity after that point. We can see how difficult is to predict demand from the data in given in the exb.5: the.
Sport Obermeyer. What makes supply chain management at Sport Performer so challenging? The biggest challenge Sport Performer is facing is uncertainty. We Will Write a Custom Case Study Specifically For You For Only $13.90/page! On the other hand, If we do not produce enough of the product to meet all of the demand for It, we lose.
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Sport Obermeyer Case Study GSB 723 Operations management Spring 2015 Group 5 Scott Lozier, Timothy Little, Anas Hidar, Xiaocao Yu Introduction: Sport Obermeyer is a family-owned business that works in fashion ski apparel area. The company focuses on the mid to high-end market, which is highly impacted by both fashion trends and functions. Sport Obermeyer breaks the customer profile into 5.

Obermeyer Sport A Strategic Direction in Forecasting Introduction & Summary Klaus Obermeyer is an innovator in the high-end skiwear industry. The company began with down filled jackets and slowly began to diversify its product line with high-altitude suntan lotion, turtlenecks, nylon wind-shirts, mirrored sunglasses and more. In 1961, the first Sport Obermeyer factory warehouse opened in Aspen, and the innovations continued with “soft-shell” jackets, double lens goggles, and the first waterproof-breathable fabrics to be used in clothing.

Step 2 - Reading the Sport Obermeyer Ltd. To write an emphatic case study analysis and provide pragmatic and actionable solutions, you must have a strong grasps of the facts and the central problem of the HBR case study. Begin slowly - underline the details and sketch out the business case study description map.

Sport Obermeyer is a high-end fashion skiwear design and merchandising company with its headquarters located in Aspen, Colorado. The company specializes in selling its products in U. S. department stores and ski shops. Although the company has a global supply network, most of its outerwear products are channeled through Obersport. [1] In the fashion skiwear industry - demand is very dependent on several factors that are difficult to predict. The inconsistent nature of the economy, fashion trends and weather create a significant challenge for a firm such as Sport Obermeyer.

By actively applying a selection of appropriate forecasting methods and continuing to adapt to this fast-paced industry, Obersport would be able to remain competitive and retain or increase its 1992 high market share entering into the 1993/94 season. Analysis A joint venture was established between Klaus Obermeyer and Raymond Tse in 1985. This company gained the title of Obersport Ltd. This joint venture allowed Obermeyer to manage supply and production operations in Hong Kong and China. [2] Until the mid-1980s, Obermeyer followed a simple design-and-sales cycle: The first stage was to design the product, then fabricate and showcase samples to retailers in March usually at fairs/shows ? The second stage was to place production orders with suppliers in March and April after receiving retail orders from the fairs/shows. ? The third stage was to receive goods at Sport Obermeyer’s distribution center in September and October; and ship product immediately to retail outlets. During the mid-1980s, several factors rendered this approach obsolete: ? As sales volume grew, the company hit manufacturing ceilings during the peak ski wear-production period. Being unable to order sufficient quantities during critical summer months reduced the supply for ongoing demanded volume, to be produced after it has received retail orders. Therefore, the company begins booking production the previous November, or about a year before goods would be sold, based on speculation about what retailers would order. Processes and Strategies A ski jacket being distributed in the U. S. could be asembled in China from fabrics and findings (zippers, snaps, buckles, and thread) sourced from Japan, South Korea, and Germany.

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This global supply chain (Exhibit 1. 0) created more product variety and improved production efficiency, but at the same time greatly increased lead times. Reaction to the lengthening supply chains, limited supplier capacity, and retailers’ demands for earlier delivery were all prominent obstacles. Obersport began developing a variety of quick-response initiatives such as to shorten lead times to overcome them. First introduced were computerized systems to slash time in processing orders and computing raw-material requirements.

This technology would anticipate what raw materials it would require and pre-position them in warehouses in the Far East because lead time for obtaining raw materials proved difficult to shorten. To shorten this time Obersport used air freight for delivery from the Far East to the Denver distribution centre as delivery due dates quickly approached. In the 1990s, these changes had reduced delivery times by more than one month. [3] Along with these changes, the Sport Obermeyer applied some other tactics in the 1990s.

Obermeyer persuaded some of its important retail customers to place their orders sooner, providing the company with valuable foreword information such as the popularity of certain styles. Invited were 25 of the company’s largest retailer customers to Aspen each February offering them a preview of the new annual line and solicit early orders. This was called an “Early Write” which accounted for about 20 percent of the total sales. About half of production requests depended highly on demand forecasts still. An in-house buying committee approach was allocated to generate these forecasts. 4] Short life cycle Issues There are three topics in today’s business environment that are especially relevant to this case: ? Production planning for short-life-cycle fashion products ? Operational changes that reduce the cost of mismatched supply and demand ? Coordination issues in a global supply chain. The Bullwhip Effect (or Whiplash Effect) is an observed phenomenon in forecast-driven distribution channels. Since the oscillating demand magnification upstream a supply chain reminds someone of a cracking whip it became famous as the Bullwhip Effect.

For seasonal goods such as winter sportswear, which has a short selling season and long lead times, a firm can do several things to better match supply and demand: • Additional events can be held before large trade fairs in order to secure orders further in advance. • Supplier capacity can be reserved without specifying the exact product mix. This postponement of the final mix has benefits similar to those of postponing product customization until the distribution center. • Common parts can be used in designs in order to pool some of the variation between individual demands. [5] Demand Forecasting

Sports Obermeyer Case Study Solutions

The different types of forecasting include: • Economic forecasts address the business cycle. Ie inflation rate, money supply, and housing starts • Technological forecasts predict the rate of technology progress and impact the development of new products • Demand Forecasts predicts sales of existing products and services. This is the type of forecasting relevant to the Obermeyer case. [6] The Importance of Forecasting [pic] Forecasts are based on statistics, and they are rarely perfectly accurate. Because forecast errors are a given, companies often carry an inventory buffer called 'safety stock'.

Moving up the supply chain from end-consumer to raw materials supplier, each supply chain participant has greater observed variation in demand and thus greater need for safety stock. In periods of rising demand, down-stream participants increase orders. In periods of falling demand, orders fall or stop to reduce inventory. The effect is that variations are amplified as one m