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

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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

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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

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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

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Structure

Sport Obermeyer

Obersport Ltd.

Alpine

(Honk Kong)

Lo Village (China)

Subcontractors (Honk Kong,

China, Macau)

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Locations

Important Landmarks

US Market

Shipment Location

Suppliers

Production center

Distribution Center

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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

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Apparels

Bombshell JacketAlex Down Jacket Indy Insulated Jacket

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Supply Chain

Textile and accessory suppliers

Apparel manufacturers

ObersportSport

ObermeyerRetailers

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• 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

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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

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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

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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

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Forecast Analysis

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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

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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

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Production Analysis

Hong Kong China

Faster Production Slower Production

Expensive Labor Cheaper Labor

Smaller lot sizes Larger lot sizes

More flexible Less flexible

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Production Analysis

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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

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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

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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

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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

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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

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Questions

25

Thank you

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