...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...
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...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. ...
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...SPORT OBREMEYER Sport Obermeyer designs and sells high-end skiwear from Colorado. Their products are sold in US departmental stores and specialty ski shops. Most of its production is carried out in honk Kong and china by its partner, Obersport. Annual production capacity is approximately 200,000 units. The minimum production quantity in Hong Kong is 600 units and 1200 units in china. They earn a 24% profit on whole sale price on every product and losses 8% on discounted sales. There are many challenges strangling this company as they serve fashion wear which are highly unpredictable. They have long lead times due to uncertain forecasts and geographical distance. The life cycle of their products are short leaving no time for comfortable manufacturing process. They have a seasonal demand with most of their sales happening during one quarter of the year. In case of stock outs they lose their 24% margin and make 8% losses on over stocked goods or marked down prices. This results in high holding costs. This highly volatile demand requires them to produce in two phases. One batch of production is to be carried out based on initial forecast and the other batch after the las vegas event requiring highly flexible supply and manufacturing process. The following exhibit shows the demand forecasts for 20000 units. STYLE | LAURA | CAROLYN | GREG | WENDY | TOM | WALLY | PRICE | Gail | 900 | 1000 | 900 | 1300 | 800 | 1200 | 110 | Isis | 800 | 700 | 1000 | 1600 | 950 | 1200 | 99 | ...
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...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...
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...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...
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...Analysis of Issues To address the two major issues, the application will be illustrated using the current problem faced by the company in deciding what to send to the manufactures for the first production run for 10 styles of women’s parkas. The forecast by the committee presents the estimate by 6 members on the potential demand which totals up to 20,000 parkas. The requirement for the first production order is 10,000parkas. First, the quantity for each style needs to be decided upon. The deciding factor given the current situation should be to minimize the risk of overproducing. Overproducing as stated earlier resulted in a salvage value that comes at loss of about 8% of the wholesale price. Essentially minimizing the risk of overproducing is also minimizing the risk of making a loss. Assuming normal distribution in the demand forecast, the approach taken is through the use of the formula: (average demand forecast + standard deviation*k) which essentially aims to reduce overproduction. The average demand forecast is the simple average of the 6 individual member estimates and the standard deviation used is twice of the standard deviation based on 6 individual members past experience. The k value is a variable that will be adjusted for all styles in order to establish the minimum order requirement of 10,000 and basically denotes the no. of standard deviations to the left of demand. The higher the k value means less the risk of overproducing. The model will also favor products...
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...The Sample Problem Objective: To prepare a production schedule according to demand forecasts made by the design committee. Constraints: 1. Minimum order quantity at: Hong Kong – 600 China -1200 2. Total order quantity (1st schedule): 10000 3. Almost Half of production to be done each in China and Hong Kong Expected Safe Margin of Production: Average Forecast – 2* standard Deviation |Style |Price |Average |Std Dev |2 * Std Dev |Safe Order | | | | | | |Size | |Gail |110 |1017 |194 |388 |629 | |Isis |99 |1042 |323 |646 |395 | |Entice |80 |1358 |248 |496 |863 | |Assault |90 |2525 |340 |680 |1845 | |Teri |123 |1100 |381 |762 |338 | |Electra |173 |2150 |404 |807 |1343 | |Stephanie |133 |1113 |524 |1048 |65 | |Seduced |73 |4017 |556 |1113 |2904 | |Anita |93 |3296 |1047 |2094 |1202 | |Daphne |148 |2383 |697 |1394 |990...
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...RECOMMENDATION #1. Improve the demand forecasts made internally by the Buying Committee in November just before Speculative Production. Instead of using just a simple average of the individual forecasts made by Laura, Carolyn, Greg, Wendy, Tom, & Wally, use a weighted average, with the weights reflecting past accuracy. RECOMMENDATION #2. Obtain market feedback earlier than Las Vegas, thereby converting some Speculative Production to Reactive Production. Sport Obermeyer can invite selected retailers to come in January to Aspen for an all-expenses-paid “Early Order Weekend”, where there is time for a”sneak preview” of the new line, some recreational skiing and socializing, and then the early placement of orders at a discount. To maximize the value of the market feedback, Sport Obermeyer’s “guest list” should include both large and small retailers and both urban and resort retailers. RECOMMENDATION #3. Decrease lead times for both raw materials and finished goods, thereby allowing more time to utilize existing capacity. Since the business strategy should emphasize Dependability more than Cost, lead-times can be reduced using some or all of the following methods: Choose suppliers of raw materials more on the basis of D than C. Expedite orders through information sharing with suppliers. Expedite shipments using faster (but more expensive) shippers. Establish some local (but more expensive) production capacity for “last minute” production. Other ways to reduce lead times...
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...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...
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...Importance of Sports and Games By Smruti Sports and games are very important for us. They keep us healthy and fit. They offer us a change from the monotony of daily life. It is a useful means of entertainment and physical activity. Sports and games help in character building. They give us energy and strength. Sports and games are means of mental and physical growth. During sports we come to learn many things. We learn how to maintain mental balance in the midst of hopes and despair. They make us learn how to tackle the difficult situation. Sports develop a sense of friendliness. They develop in us team spirit. They help in developing mental and physical toughness. They shape our body and make it strong and active. They give us energy and strength. They remove tiredness and lethargy. They improve blood circulation. This improves our physical well-being. Sports and games improve our capability. They improve our efficiency. Either study or work alone makes us exhaust. We remain no longer efficient to do any work. Sports remove our mental exhaustion. Sports are integral part of education. Education without sports is incomplete. Keeping their value in life, children are taught some sorts of games in the very early stage in school. These days’ sports are a part of academic curricula. Sports are particularly important for the youth. They help in their physical and mental growth. They contribute in the formation of character. They inculcate in them good values. It is therefore, sports competition...
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...promotion Red bull is involved in a lot of sports like motorsports, bike racing, winter sports, skateboarding and surfing. They have their logo on the equipment used for the sport. By generating publicity through the sports is ‘below the line’ promoting they do often not use traditional sponsorship method, they create their own sporting events such as Red Bull X-Fighters and Red Bull Air Race, where the world’s top FMX riders and pilots respectively perform world class flips, turns and tricks in front of tens of thousands of spectators. These events help to establish the brand values. They also begin the AIDA process with the participants and audiences for these events, creating awareness and interest in Red Bull products. Red bull used public relations when they involved Austrian skydiver Felix Baumgartner by sending him 24 miles into the stratosphere over New Mexico, United States, in a helium balloon before free falling in a pressure suit and then parachuting to Earth. Red Bull has not made public how much the stunt - which included funding the equipment, training and support staff – cost, although the balloon that took Baumgartner on his ascent is reported to have cost (£43,600) alone. Red bull used sales promotion as they gave away free cans of red bull they delivered them to 400 student campuses in 55 countries over 6 continents. Red bull use personal selling as they have teams of young women/men to sell their products at their sports events. Red bull use ‘above the line’...
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...Case outline Bob Rhodes, age 32, is well known in his local sports activity. Ten years ago, he started business called The Sports Guy and raised capital from obtaining a bank loan and an equity investment from friends and family. His family and friends own 40% of the business while he owns the rest. Mortgage help him purchasing land in small town outside of GTA that consists of two lots on a corner in which one is used to build a store, and another one was planned for the parking lot but never executed the plan because of the surrounding activities. Local sports team account for 70% of the sales whereas 30% comes from regular walk-in customers. Problem Statement & Objectives The major problem is reducing profitability of the business and there is no proper management of the inventory, which leads to sale of inventory at discount rate. Also labor wages are also too high and reducing creditability of business lead to reduce in the trust of the business and loss of the customer due to improper inventory management. The objective is to get access to bank credit to finance high Analysis the financial health of the business and recommend the various way to get the business right on track Situation Analysis Summary The company sell retail sports product to the sport team and children’s. Also there is around 30% of walk-in customer, who help the business to manage inventory. This might not be attractive industry because buyer’s and potential entrants have high power in...
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...RES341 University of Phoenix August 15, 2011 Memo The purpose of this memo is to inform you that ABC Sports Equipment sales have declined due to the fact that a number of chain stores have moved in to the area and they also sell sports equipment. In order to meet our customer needs we have given customer surveys at the store and outside the store. Our surveys contain questions such as cleanliness of our store, hours of operation, competitive pricing, personalized services, product selection, and location of the store. After the surveys are done and the information is gathered we are going to see what are the customer needs. Then we will focus on what we need to change in the store to increase our sales Out of 60 surveys that where handed out 35 where returned. A total of 20 surveys where given to existing customers and 40 where handed out at a sporting event in a park for potential customers. A total of 30 men and 15 women took the survey. When asked if they knew where ABC Sports Equipment was located only 10 said yes and 15 said no. location of the store: 2.9, product selection: 2.5, hours of operation: 2.1, and competitive pricing: 1.8. The mean for possible customers competitive pricing: 4.0, personalized service: 3.8, production selection: 3.0, product selection: 2.5, hours of operation: 2.9, and cleanliness of the store: 2.9. After gathering all data we noticed that existing customers want more personalized service and a cleaner store. We know can work on training...
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...Minutes of 2 nd Excellent Sports Club Meeting Venue : CRC Social Club Date : 25th January 2012 Time : 7:30 pm Attendance : Present: Hidhir ( President) Tan Ling Ching (Vice President) Rajeswari (Secretary) Heu Wai Yee (Treasurer) Lee Seo Lin (Members of the Committee) Nurul Amiliani (Members of the Committee) Rahul Rozali (Members of the Committee) Absent with apologies: Ling Chin Chuan (sick) 1. Agenda Item 1: Confirmation of minutes of previous meeting The president welcomed members to the meeting. The minutes of the previous member’s selection meeting was read out by Secretary. These were issued at the meeting and were accepted as a true record. The meeting was held to organise the annual activities for the club and raised funds for the competition and cost for the facilities of the club. The President asked for the minutes to be passed. Proposal for minutes to be passed to Ong Ben Kiat and Lee Hooi Sun. 2. Agenda Item 2 : Proposed Programmes for the year 2.1 Badminton Tournaments The details of the tournaments were proposed by Mohd. Haikal and next by Surihana Zainol. This competition will be held on 13th February 2012 in SMK St. Anthony’s hall. The objectives of the competition are to encourage more members involved in the sports competition and to enhance their interest in badminton. This competition will be divided into 3 categories, that is, single, double and mixed double. The committee members who are in charge of this tournament...
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...of life during that specific time or place. Since the dawn of this new era, the economy has relied on fast food, sports, and television as their primary source of entertainment. The three categories listed above have overlapping patterns suggesting individuals to purchase their product being mentally or physically. Food industry’s use artificial visual prop’s such as plastic or wax items to help portray luscious tasting food to help entice a hunger experience. Driving by Arby’s a billboard picture shows five roast beef sandwiches for five dollars, leading individuals to believe this is an excellent value. On the other hand, Arby’s does not inform customers of the calorie intake, sodium, and other ingredients that are harmful to individuals’ health. Consequently, these additives tremendously increased over the years. Another example of a food artifact is McDonald’s golden arches. In most cities children in general recognize McDonald’s for their symbol of a golden arches. Sadly, this fast food establishment has been deemed un-healthy of all chain restaurants which has been proven to be a fact through medical research. I for one, after seeing the movie “Super Size” have refrained from being a regular customer do to these findings. Another area of how mass media affects the public is through sports. In the early 1900’s baseball was America’s sport of choice and now since the changes that were made in 1925, football has evolved into America’s favorite game. Stadiums...
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