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Sport Obermeyer Case Study
Presented By:
Gourav Anvekar Ranjan Melanta
Jerrin Mathew Kunal Savlani
Agenda
Introduction and background
Supply Chain
Timelines
Challenges
Analysis
Recommendations
Summary
2
Introduction
Sport Obermeyer
Origin traced to 1947
Founder: Klaus Obermeyer
Originally from Germany
Engineer by training
Headquartered in Aspen, Colorado
Introduced the first Goose-down vest
3
History
Klaus Obermeyer
Founder, Sport Obermeyer
Wally Obermeyer
Vice President, Sport Obermeyer
Raymond Tse
Owner and President, Alpine
MD Obersport Ltd.
Shiu Chuen Tse
Operations Manager, Alpine
4
Perspective
Klaus Obermeyer
Wally Obermeyer
• Providing value to customers
• Trust
• Intuitive style
• More importance to his
experience
Relied heavily on formal data
gathering and analytical
techniques
5
Structure
Sport Obermeyer
Obersport Ltd.
Alpine
(Honk Kong)
Lo Village (China)
Subcontractors (Honk Kong,
China, Macau)
6
Locations
Important Landmarks
US Market
Shipment Location
Suppliers
Production center
Distribution Center
7
Product Segmentation
Segmentation based on Gender
Men’s Collection
Fred, Rex, Beige and Klausie
Women’s Collection
Boy’s Collection
Girl’s Collection
Preschooler’s Collection
8
Apparels
Bombshell JacketAlex Down Jacket Indy Insulated Jacket
9
Supply Chain
Textile and accessory suppliers
Apparel manufacturers
ObersportSport
ObermeyerRetailers
10
• Raw materials
• Zipper, Fabric
• Cut and Sew
• Dying and printing
• Supervises productions
• Manage operations
• Ensure quality
• Forecast, design
• Ship to retailers
• Customers
• Market Feedback
Timelines
Design
• February 1992
Prototypes
• July 1992
• Designs sent to Obersports
Design Finalized
• September 1992
• Sample Production
Production
•November 1992
•1st production order to Obersports
11
Timelines
Las Vegas Show
•March 1993
Additional Orders
•April– July 1993
Ship to Seattle
•June – July 1993
Full delivery to retailers
• Early September 1993
Replenishment Orders
• December 1993 –February 1994
Quota Restrictions80% of orders
12
Challenges
Inaccurate forecast leading to
Excess production of non-popular products
Shortage of popular products
Where to manufacture
Hong Kong or China?
Raw material sourcing – long lead times
Operational Challenges
Competition from competitors
13
Forecast Analysis
Problems
Inaccurate forecast of retailer demand
Greater product variety and intense competition has made prediction difficult
Process
Obtain individual forecasts from managers
Estimate the risk associated with early production of each style
Examination of demand from previous years forecast
14
Forecast Analysis
15
Forecast Recommendations
Analyze historic data to determine future trends
Use weighted average of forecasts obtained from managers
Obtain early market demand forecast by getting feedback from retailers much
before the Vegas show to achieve better forecast accuracy
16
Production Analysis
Problems
Quality and reliability of products produced in China
Larger minimum order and quota restriction on products
Higher labor cost in Hong Kong
Skill level of Hong Kong is much better than China
Raw materials procured from suppliers from different countries increases lead time
17
Production Analysis
Hong Kong China
Faster Production Slower Production
Expensive Labor Cheaper Labor
Smaller lot sizes Larger lot sizes
More flexible Less flexible
18
Production Analysis
19
Production Recommendations
Improve quality of labor by cross training labors in China
Decrease lead time by obtaining raw materials from geographically closer locations to
ensure timely delivery
Increase production capacity by increasing sub contractors
Overcome minimum production quantity issue by having a production unit
20
Operational Recommendations
Promotional marketing strategies
Increase service level
Establish new distribution center in Seattle to reduce transportation cost and time
Introduce drop shipping of popular items to reduce delivery lead times and maximize
profits by holding popular item’s market share
Expand South American Markets
21
Competition Recommendations
Competitive pricing strategy
Target improvements in adult ski jacket market (Columbia holds 23% of the market
share)
Marketing Campaigns
Reducing lead times to gain maximum out of the quota restrictions
Improving product quality by cross scaling
22
Recommendation Summary
Obtain early feedback from retailers and use historic data to improve forecast
Improve quality of labor and decrease lead time to obtain raw materials
Introduce drop shipping and establish new distribution centers
Target improvements in new markets to gain market share to increase profits
23
References
Harvard Business Review: Sport Obermeyer Case
– Janice H. Hammond and Ananth Raman, August 2006
Obermeyer Ltd: obermeyer.com
Supply Chain Economics
– Jordan Avery, Michael Gilkenson, Alina Cornejo, Fabio Romero, Farida Jariwala, Sara
Rogovin and Eric Timm
Report
24
Questions
25
Thank you
26