Sport Obermeyer Ltd

Overview• Founded in 1947 by Kluas Obermeyer in Aspen Colorado• Fashion skiwear manufacturer offering a broad line of ski

apparels including parkas, vests, ski suits, shells, ski pants, sweaters, turtlenecks & accessories

• Estimated Sales of US $ 32.8 million in the year 1992• Market Share

– 45% Children's Skiwear– 11% Adult Skiwear

• Major Production done in Hong Kong and China by partner company Obersport Ltd.

• Obersport Ltd. was a joint venture established in 1985 by Kluas Obermeyer & Raymond Tse.

• Obersports is responsible for the raw material sourcing and production for all Sports Obermeyer’s products in the Far East

Structure

Sport Obemeyer

Ski Retail Stores

Direct Mail Retailers

Departmental Stores

Obersport

Production ProcessDesign (Feb 92)Final Design ( Sept 92)Sample ProductionFull scale production (Feb 93)Las Vegas show( 80% orders)Place final order with ObersportAdditional orders received Transport to HO( July 93)Delivery to retailers by Sept 93Retailers selling from Sept to Feb)Later Discount Sale

The Order CycleDesign

Process

Begins

1993-94

Lines•Feb 1992

Las Vegas Trade

Show

•Mar 1992

Design

Concept

s Finalized•May 1992

Finalized Sketches sent to

Obersport •July 1992

Designs

Finalized

•Sep 1992

Initial Production Order

to Obersport

Cutting and Sewing

•Feb 1993

Las Vegas Show 80% order

s

•Mar 1993

Final Productio

n Orders

•April-May 1993

Challenges to ObermeyerLong manufacture lead time

No feedback from market until Vegas Trade

Improper Forecasts

Issues How to measure demand uncertainty from

forecastHow to allocate production between the

factories in Hong Kong and China.( How much to produce in each Factory)

Production overviewHong Kong 50% faster then Chinese workersExpensiveFasterFlexible

China CheaperLarge Lot sizeSlower then HKK

The ProductProduct were offered in 5 genders( Men,

Women, Boys, Girls & Preschoolers)Segmented according to( Price, Type and

Fashion)Customer were divided into ( Fred, Rex,

Beige & Klausie)

SuggestionsIdeally, during Speculative Production, we want to

order a specific quantity of a parka style, and then, during Reactive Production, we want to “fine tune” the parka’s remaining supply by ordering as few or However, a large minimum order quantity for a particular style of parka forces us to order either many parkas or none.

Thus, a minimum order quantity significantly reduces the ability to “fine tune” during Reactive Production.

as many as the indicated by the revised forecast after Las Vegas

RecommendationsImprove 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.

Obtain market feedback earlier than Las Vegas, thereby converting some Speculative Production to Reactive Production.

Decrease lead times for both raw materials and finished goods, thereby allowing more time to utilize existing capacity.