...Sport Obermeyer is an innovative, high end, ski Wear Company created by Klaus Obermeyer to enable skiers to be comfortable in quality ski wear that is functional and fashionable. The Ski wear industry is a competitive marketplace. Key industry leaders such as The North Face also targeting high-end outdoor savvy consumers and Columbia Sportswear a company which offer supplementary lower-priced, high-volume styles also hold a substantial percent of the market. Sport Obermeyer operations are currently executed through a lengthy two-year cycle that mismatches resources and production peak periods. As a result of long lead times most retailers request full delivery of orders prior to start of retail season. It is recommended to address long lead times and a high inventory count with uncertain demand, that Sport Obermeyer should begin operational changes through the utilization of risk based production sequencing. Secondly it is recommended that the company aim to improve qualitative demand forecasts made internally by the buying committee in November just before Speculative Production. After a careful analysis of production operations, it is recommended that Sport Obermeyer utilize China for long-term operations and Hong Kong for short-term operations. Although Hong Kong workers come at a higher labor cost, they are faster, more flexible, and produce a reliable high quality product. Sport Obermeyer is a well-rounded company providing a desired product to the right...
Words: 264 - Pages: 2
...Introduction Sport Obermeyer is a leader in fashion skiwear manufacturing. Skiwear manufacturing is a competitive field with distinct challenges. Skiwear market is just four months long but the design and production process takes over 16 months to complete. Accurate estimates of demand become available only after a year into design and production cycle. The Company also faces long lead times from textile and accessories suppliers. This forces the company to accurately predict the demand early accurately and place the production orders that meet the forecasted demand. This case discusses the challenges faced by Wally Obermeyer in committing to specific productions quantities Sport Obermeyer will offer in 1993-1994 ski season. Wally has collected the demand forecast of each style from the members of the buying committee. Wally’s challenge is to make appropriate production commitments for the coming year based on this demand forecast. Accurate forecasts of expected demand will help the company handle the high variability in customer demand and long lead times in getting the products to the market. Increases in competition and product variety have made accurate demand prediction very difficult. The Greater product variety and more intense competition have made accurate prediction very difficult. A second challenge for Wally is to decide how to allocate production between factories in Hong Kong and China. Obermeyer Operational Challenges and Competitive Priorities 1. Product related...
Words: 4231 - Pages: 17
...Sport Obermeyer, Ltd. Business Case Report Sport Obermeyer, Ltd. Business Case Report Table of Contents Executive Summary 1 Issue Identification 2 Environmental and Root Cause Analysis 3 Alternatives & Options 4 Recommendations 5 Implementation 6 Monitor and Control 7 Sport Obermeyer, Ltd. Business Case Report Executive Summary Each year we are challenged with matching supply and demand. With a cycle time of a year and a half we have been challenged to make accurate production forecasts. This has caused us to compromise service levels, run higher inventories, raising costs and declining sales. We need to address the processes to deal with irregular demand and also how to work with our suppliers and manufacturers to address inefficiencies in the supply chain to reduce lead times. In this report, some recommendations of operational improvement such as decrease lead times with Textile and Accessory Suppliers, increase apparel manufacturers production by increased use of subcontractors, decrease minimum order quantities (Obersport) are discussed. I have also reviewed the pros and cons of sourcing products in Hong Kong and China in my analysis. The outcome of my review is a recommendation that we work with our manufacturers to decrease minimum quantities. This will allow us to respond to our customers requests with improved agility. ...
Words: 1133 - Pages: 5
...Case Summary Sport Obermeyer was founded by Klaus Obermeyer as a ski wear manufacturer. Klaus was a teacher at aspen ski school and while teaching he realized that the ski wear available to his student were impractical, as they were less protective and less stylish. He believed more functional ski apparel could be produced and then took the initiative to design more durable, high performance clothing equipment. Klaus’ design of the ski break was the innovation that led to the company becoming a major player in the ski wear market. Sport Obermeyer provides a broad line of fashion ski apparel including parkas, vests, ski suits, shells, ski pants, sweaters, turtlenecks and accessories. They categorized their target market into five different groups namely men, women, boys, girls and preschoolers. The company holds a commanding 45% share of the children ski wear and an 11% share of the adult ski wear market. The first production facility was based in China Lo village and through growth Sport Obermeyer opened another production plant in Hong Kong. Klaus Obermeyer and Raymond Tse established Obersport LTD which coordinates the production that currently takes place in Hong Kong and China which is then transported by ship to warehouses in Seattle and then moved by truck to Denver, furthermore, air transport is also used to supplement the transport of goods in order to meet deadlines. The current challenges that are being faced by Sport Obermeyer are firstly, as a result of inaccurate...
Words: 3148 - Pages: 13
...[Sport Obermeyer Case Analysis] | How to plan and forecast in an environment with variable demand and long lead time via the use of speculative vs. reactive capacity | Table of Contents Executive Summary Page Part 1 Executive Summary 3 Issue Identification Part 2 Immediate Issues 4 Part 3 Systemic Issues 4 Environmental & Root Cause Analysis Part 4 Qualitative Analysis 8 Part 5 Quantitative Analysis 9 Alternatives &/or Options Part 6 Alternatives 10 Recommendations Part 7 Recommendation 15 Implementation Part 8 Recommendation Implementation Plan 17 Monitor & Control Part 9 Monitor and Control 19 Conclusion Part 10 Conclusion 20 Part 1: Executive Summary Sport Obermeyer was founded by Klaus Obermeyer, with the intentions to provide the U.S skier market with the same stylish clothing found in Germany. Sport Obermeyer eventually developed into one of the major competitors in the U.S skiwear market. The production process for Sport Obermeyer’s product lines began a full year and a half before the product actually hits the retail stores. They are using a multi-phase production process. First, production process is received by Obersport in February; the second production phase begins in April/May and continues until August. Sport Obermeyer is starting its initial task for the 1993-1994 skiwear line. They must make a decision on where to source...
Words: 3945 - Pages: 16
...Sport Obermeyer – Case Report Module One, Session Six Supply Chain Inventory Management Darcy Shannon October 27, 2010 Sport Obermeyer – Case Report Executive Summary In order to minimize the degree of stock outs, and markdowns, I have decided for the initial Hong Kong order to produce those products that have the smallest standard deviation when comparing the Buying Committee Forecasts. An attempt will also be made to purchase the lowest cost items within this group, as initial order size of 10,000 units allows. Combined, this will allow for the least amount of risk Obermeyer is exposed to when using the limited information they have for the initial order. The ideal products to order are those with enough forecast quantity that the minimum quantity order will be less than the forecast and also leave enough room for a reorder of the minimum quantity or more if required. Exhibit 1 shows the proposed initial order. More importantly, I have also decided that Sport Obermeyer, as a company, needs to focus on two distinct issues going forward. 1. Change the purchasing strategy from a speculative system, (trying to “guess” what will sell) to a reactive system (knowing what is required and producing it). 2. Work with suppliers to reduce delivery times and minimum order quantities. This will include both raw material lead time and production capacity. Hong Kong is a much more mature manufacturing environment. They have embraced better manufacturing practices that...
Words: 1299 - Pages: 6
...Executive summary: Sport Obermeyer starts it humble beginning during the last 1940’s. Klaus a German immigrant was teaching at an Aspen Ski School, when he noticed that his student was cold and miserable because of impractical clothes. At first he would begin to travel Germany during the summer and buy clothes and bring back to the US for his students. Being an engineer himself, he started designing skiwear and ski equipment. Over the years, Sport Obermeyer developed into a prominent competitor in the U.S. skiwear market: estimated sales in 1992 were $32.8 million. The company held a commanding 45% share of the children’s skiwear market and 11% share of the adult skiwear market. In 1985, Klaus Obermeyer teamed up with Raymond Tse to establish Obersport Ltd. This joint venture was used to coordinate production of Sport Obermeyer products in the Far East. Obersport was responsible for fabric and component sourcing for Sport Obermeyer’s production. Materials sourced were cut and sewn either in Raymond Tse’s own “Alpine” factories or in independent subcontractors located in Hong Kong, Macau, and China. Raymond was owner and president of Alpine Ltd., which included skiwear manufacturing plants in Hong Kong as well as a recently established facility in China. Obermeyer would cover 80% of Raymond Tse business. For this case, we will focusing on the skiwear part of the Obermeyer business. It has a current cycle time of 27 months. Considering that what we are selling is short life...
Words: 1261 - Pages: 6
...SPORTS OBERMEYER Introduction Sports Obermeyer Ltd. is a successful ski apparel company that needs to address logistics related decisions. The company was founded in 1947, by Klaus Obermeyer and it has continued to excel through latest trend spotting resulting in continuous product innovation. Currently the demand forecasting for the products is done by considering the average sales forecasts given by internal members. Postponement techniques were being used (by keeping large amount of greige material) so as to make the supply chain more responsive. In the apparel industry it is becomes necessary that clothing makers and sellers maintain long lead times. In case of Sports Obermeyer, the lead time is approximately 2 years. Such long lead times result in stock-outs of popular items during peak selling periods and leftover stock of not so popular products which eventually are sold at below cost rates. To handle the problem of overstocking of less preferable, Sports Obermeyer can go for promotional campaigns and stimulate the market. But this might also lead to the aggravation of the stock out issues of the popular products. Sports Obermeyer has a limited geographic diversity and a huge product line. Currently Sports Obermeyer is operating in only Canada, U.S.A. and Great Britain. Moreover the regulations from the U.S. government limit the number of apparels that can be imported into the country. SWOT Analysis Strengths: History of product innovation. Buying committee...
Words: 2425 - Pages: 10
...Company Background • Sport Obermeyer designs and merchandises high-end skiwear from its Aspen, Colorado headquarters. • The products are sold in U.S. department stores and specialty ski shops. • Although it has a global supply network, most production is done in Hong Kong and China by its partner, Obersport. Sport Obermeyer Supply Chain Management MGT 690 June 5, 2010 2 Obersport The Supply Chain Shell Fabric • Established in 1985. • It is a joint venture between Sport Obermeyer and a Hong Kong based partner. • Obersport handles the raw materials and production for all of Sport Obermeyer’s production in the Far East. • Production is done in independent subcontractors located in Hong Kong and China. Lining Fabric Insulation Materials Cut/Sew Distribution Center Retailers Snaps Zippers Others Textile Suppliers Obersport Obermeyer Retailers 3 4 Planning Cycle Planning Cycle Cont. • Design begins in February of the year before the garments will appear in stores. • As soon as designs are finalized, samples are produced and shown to retailers during the Las Vegas show. The show is usually held in March. • Concurrently, materials and components are ordered for the initial production order. • Usually receive 80% of the annual order volume the week after Las Vegas show. • During June and July the garments are transported to Obermeyer’s Denver warehouse. This takes approximately six weeks...
Words: 1778 - Pages: 8
...Sport Obermeyer Case Report Table of Contents Executive summary 3 Introduction 5 Issues Identification and Root Cause Analysis 8 Alternatives and Options 9 Recommendations 10 Implementation 11 Monitor and Control 12 Conclusion and Management Issues 13 Exhibits 14 Executive Summary Sport Obermeyer is currently having great difficulty with matching supply with demand. We have to predict far in advance what styles are going to be popular and how they are going to be produced. Difficulty is more acute with seasonal demand and short life cycles and prediction which is speculative must be almost two...
Words: 2298 - Pages: 10
...Introduction Sport Obermeyer, Ltd is an American sportswear manufacturer based in Aspen, Colorado. Founded by a creative German emigrant, it is a successful provider of various skiing apparels for all ages. Being successful for over 40 years, Obermeyer had thorough experience in providing high quality clothing in the middle-higher price range. In order to keep its competitive strengths, outsourcing to the Far East started around the early nineties to lower production costs. The product portfolio was differentiated into several self-made customer categories, keeping excellent price/value ratio and functionality well in focus. As competition kept rising rapidly, Obermeyer put even more emphasis on its costing strategy, which on the other hand brought tradeoffs. Production in Hong Kong and recently also in China required significant minimum orders, which at the end of the season could have resulted in excess, unsold products. On the other hand, underestimating demand was similarly painful: not being able to fulfill customer requests resulted in lost profits. All of Obermeyer’s production were coordinated by Obersport Ltd, a joint venture between Obermeyer and his Chinese business partner. This company organized subcontractors from mainland China and Hong Kong to produce Obermeyer clothing. Recently, a new plant was built in China to utilize its significantly lower production costs compared to Hong Kong. The tradeoff, however was that minimum order quantities were higher in China...
Words: 3635 - Pages: 15
...Case study analysis on ‘Sport Obermeyer’ Sport Obermeyer is a US based manufacturer of fashion ski apparel industry, Parkas were their centrepiece. ANALYSIS 1. Inaccurate forecast of retailer’s demand Due to incorrect forecast the company is held with unsold merchandise which even the retailers wouldn’t purchase, and later the company sold those products at deep discounts which were often below their manufacturing cost, this caused bull whip effect. This resulted loss of sales revenue and further decline in market share. On the other hand, the company ran out of shortage of popular products. The company suffers from long lead time which magnifies bull whip effect, because of the supplier’s capacity constraints which makes it difficult to forecast. The company doesn’t include suppliers and retailers in their future forecasting process. 2. Difficulty in allocation of production between Hong Kong and China. Wally, observed quality and reliability in the operations of China, and lower labour cost. The labours in China weren’t highly skilled as that of Hong Kong which leads to longer production line in China .The plants in China required larger minimum quantities and there were quota restrictions on products by the U.S Government. Highly skilled labours of Hong Kong produce products much faster when compared to China. 3. Raw materials acquired from different countries increased the lead time. This should be avoided in order to implement efficiency in ordering process...
Words: 678 - Pages: 3
...Sport Obermeyer is a family-owned business in the fashion ski apparel industry. They specialize in ski apparel for the mid to high-end market, which consists of fully coordinated outfits with parkas as the centerpiece. They break their product market into 5 genders: men, women, boys, girls and preschoolers. Within each gender they further categorize according to customer preferences. The company’s product strategy rests on offering fully-matching collections, and delivering to retailers early in the season to assure good product placement and ample floor space. Currently they can boast a 45% share of the market for the children’s section, and 11% for adults. Sport Obermeyer is facing difficulties from its outdated supply chain. They suffer long lead times, due to supplier capacity constraints which places a heavy burden on forecasting. Forecasting in this ever-changing market is a significant challenge, which when is inaccurate costs the company in terms of below cost inventory disposal and lost sales revenues, which may also further reduce market share. Due to the dynamics of the industry, having both uncertain supply and demand, usage of an “agile” supply chain is the recommended course of action. An agile supply chain means that Sport Obermeyer needs to build agilty, adaptability and alignment with suppliers within its system. Achieving this goal will reduce lead times, which will allow the company to react more quickly to market demands and reduce the need for...
Words: 1650 - Pages: 7
...GARABEDIAN, Jean-Marc 13208 Case analysis: Obermeyer Sport Obermeyer is a high-end fashion skiwear designer and merchandising company. Some of their merchandise include parkas, vests, sweater, ski suits etc… however their parkas remain their most profitable design. The product is offered in five different genders: men, women, boys, girls, preschoolers and the company segmented each gender market according to price, type of skier and fashion forwardness. The Us Skiwear sales for Obermeyer was estimated at 32.8 million dollars, which includes 45% market share for children and 11% market share for adults. However the company is facing several issues, mainly because of their lack of an efficient demand forecasting system, affecting their production. The fact that inventory is also quite high over the years also reduces the company’s profits. The excess merchandise is then sold at deep discounts, and in many instances, the most popular items get sold out faster than expected, with no time for replenishment due to high lead times. Another important question we will try to answer is whether Obermeyer is choosing the right path to increase its production in Mainland China rather than in Hong Kong. We will discuss why Obermeyer is facing these issues and give our recommendations in order for the company to become more profitable and competitive. The first major issue with Obermeyer is their high lead times. The company sources most of its products through Obersport from China...
Words: 925 - Pages: 4
...Situation Sport Obermeyer is a family-owned business in the fashion ski apparel industry. They specialize in ski apparel for the mid to high-end market, which consists of fully coordinated outfits with parkas as the centerpiece. They break their product market into 5 genders: men, women, boys, girls and preschoolers. Within each gender they further categorize according to customer preferences. The company’s product strategy rests on offering fully-matching collections, and delivering to retailers early in the season to assure good product placement and ample floor space. Currently they can boast a 45% share of the market for the children’s section, and 11% for adults. Sport Obermeyer is facing difficulties from its outdated supply chain. They suffer long lead times, due to supplier capacity constraints which places a heavy burden on forecasting. Forecasting in this ever-changing market is a significant challenge, which when is inaccurate costs the company in terms of below cost inventory disposal and lost sales revenues, which may also further reduce market share. Due to the dynamics of the industry, having both uncertain supply and demand, usage of an “agile” supply chain is the recommended course of action. An agile supply chain means that Sport Obermeyer needs to build agilty, adaptability and alignment with suppliers within its system. Achieving this goal will reduce lead times, which will allow the company to react more quickly to market demands and reduce...
Words: 1619 - Pages: 7
