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COMPANY  History : “ Skiing is a celebration of life” Klaus Obermeyer 1947: Klaus Obermeyer, a German immigrant began teac...
COMPANY  History: 1985:  Obersport; a joint venture in Hong Kong , the company began to increase productivity to meet thei...
COMPANY  Network: Recently, a number of contractual ventures were added and a new complex in Lo Village Guangdong China
PRODUCT  & Segmentation :
PRODUCT  Variety:
The Obermeyer supply chain stretches  from Asia to Aspen SUPPLY CHAIN  Process: Raw Materials Finished goods Textile and A...
<ul><li>Design Process  Las Vegas  Concept  Sketches sent  Designs  </li></ul><ul><li>begins  Show  Finalise  to Obersport...
Fabric Producer Fabric Dyer Cut/Sew Factory Denver Warehouse Retailer undyed greige goods Asia Consumer Components Greige ...
Factories in Hong Kong Seattle warehouse 800 Ski Retailers Product Sketches Forecast Committee Forecasts Order 20% in Apr-...
SALES & REPLENISHING   Process: Peak Sales Aug 92   Sep 92  Oct  92  Nov 92     Dec 92   Feb 93 Sales Re-Sales Stock outs ...
Questions & Answer
1. Using the sample data given in Table 3 -19 , make a recommend for how many units of each style Wally should make during...
3. Repeat your methodology and assume now that all 10 styles are made in China. What is the difference (If any) between th...
1. & 3. Comparison units of each style when produced in HK and China
Differences between production in HK and China <ul><li>Inventory </li></ul><ul><li>Total Cost </li></ul><ul><li>Operation ...
1. & 3. The differences between production in HK and China
2. Can you come up a measure of risk associated with an your ordering policy? This measure should be quantifiable.
<ul><li>Stock outs (-24 % whole sale price) </li></ul><ul><li>Market downs( -8% of wholesale price) </li></ul><ul><li>(Old...
Forecasts are always uncertain Why does risk happens ? Demand Average Standard   deviation Standard   deviation
How can we assessing  forecast certainty? 1 .  Based on historical data - Past forecast error - Variability of demand
2. Rather than producing one joint  forecast ,each member of the purchasing committee produces his/her own forecast . Ober...
3. The deviation in views is good  estimator of forecast reliability Table of standard deviation vs Coefficient of variation
4. How is this information helpful ? -  Using  Early production  Capacity ( Speculative  capacity) for Assoult and Seduced...
4. What operational changes would you recommend to Wally to improve performance?
<ul><li>Ski Clothes is fashionable product, Its life cycle is short  </li></ul><ul><li>Long time of planning and productio...
<ul><li>Reducing number of styles handled and to predict customer demand for individual style. </li></ul><ul><li>To create...
<ul><li>Production system </li></ul><ul><li>Increasing production Quality of China to be closed to Hong Kong. </li></ul><u...
Lead time reduction <ul><li>Fabric dyer lead time of several months  </li></ul><ul><li>Dyer has long lead time on greige g...
<ul><li>Solution:   </li></ul><ul><li>Offer dyer one year commitment on greige goods and capacity </li></ul><ul><li>Dye ba...
<ul><li>Supply chain system </li></ul><ul><li>Increasing bargaining power with suppliers by ordering via big supplier that...
<ul><li>Increasing distribution channel to a country that have different period of product usage </li></ul><ul><li>Increas...
Hong Kong Seattle Original distribution process Establish Distribution  Center in Seattle   without  through Denver
<ul><li>Information system </li></ul><ul><li>Collect the data backward and analyze the demand of the show in Vegas and com...
5. How should Wally think (both short term and long term) about sourcing in Hong Kong versus China?  What kind of sourcing...
Production Options <ul><li>Hong Kong </li></ul><ul><ul><li>Faster </li></ul></ul><ul><ul><li>More flexible </li></ul></ul>...
Where is better? <ul><li>Short term </li></ul>Long term Hong Kong China
Skiing is a celebration of life Klaus Obermeyer Thank you
Women’s Collection
Young’s Collection   Dharma Jacket - 51103
Competitors   The Jacobs Corporation   founded by David L .  Jacobs Biography
Competitors   The North Face, Inc. : subsidiary of VF Corporation
Competitors   Burton Snowboards   founded by Jake Burton Carpenter   Innovative Burton  outerwear performance meets leadin...
Manufacturing  Structure: Sport Obermeyer Ltd. Obersport Ltd. <ul><li>Alpine Ltd </li></ul><ul><li>Hong Kong </li></ul><ul...
The Supply Chain Textile and Accessories Suppliers Apparel Manufacturers Sport Obermeyer Retailers Obersport Produce, dye ...
Obermeyer’s planning calendar
Product Transportation Hong Kong Warehouse Seattle Obermeyer’s Denver Warehouse then transported by trucks goods produced ...
Retailers Specialty Ski-Retail Stores Department Stores Direct Mail Retailers Consumers Most sales occur between September...
SUPPLY CHAIN  Management: Jan Dec Jan Dec Apr Jul Oct Apr Jul Oct 1992 1993 Committee  forecast Munich show &  Las Vegas s...
SUPPLY CHAIN  Management: Jan Dec Jan Dec Apr Jul Oct Apr Jul Oct 1992 1993 Munich show &  Las Vegas show   Design process...
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Sport Obermeyer

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Sport Obermeyer

  1. 2. COMPANY History : “ Skiing is a celebration of life” Klaus Obermeyer 1947: Klaus Obermeyer, a German immigrant began teaching at the Aspen Ski School
  2. 3. COMPANY History: 1985: Obersport; a joint venture in Hong Kong , the company began to increase productivity to meet their new d emands.
  3. 4. COMPANY Network: Recently, a number of contractual ventures were added and a new complex in Lo Village Guangdong China
  4. 5. PRODUCT & Segmentation :
  5. 6. PRODUCT Variety:
  6. 7. The Obermeyer supply chain stretches from Asia to Aspen SUPPLY CHAIN Process: Raw Materials Finished goods Textile and Accessories Suppliers Apparel Manufactures Obersport Retailers
  7. 8. <ul><li>Design Process Las Vegas Concept Sketches sent Designs </li></ul><ul><li>begins Show Finalise to Obersport Finalised </li></ul>Feb 92 Mar 92 May 92 Jul 92 Sep 92 Nov 92 Mar 93 Apr 93 - Jul 93 Dec 93-Feb 94 Place 1 st Production Las Vegas Additional Replenishment Order with Obersport Show orders received orders received Prototype, Sample Production Full scale production PLANNING & Production Cycle :
  8. 9. Fabric Producer Fabric Dyer Cut/Sew Factory Denver Warehouse Retailer undyed greige goods Asia Consumer Components Greige Shell Fabric Finishing of Shell Fabric (Dying & Printing) Finished Lining Fabric Insulation Zippers Thread Logo Patches, Drawcords, Hang Tags, etc. Snaps (undyed) Dyeing of Snaps Procurement lead time 45 – 90 days 45 – 60 days 45 – 60 days 2 – 3 weeks Standard (HK) 60 days, Custom (JP) 90+ days 30 days 15 – 30 days 1 – 2 months 15 – 30 days 6 wk 6 weeks 6 wk PRODUCTION Process:
  9. 10. Factories in Hong Kong Seattle warehouse 800 Ski Retailers Product Sketches Forecast Committee Forecasts Order 20% in Apr-Jun 93 Order 80% in Mar 93 Retailers order in Apr-Jun 93 Denver warehouse 6 weeks ORDERING & SHIPMENT Process:
  10. 11. SALES & REPLENISHING Process: Peak Sales Aug 92 Sep 92 Oct 92 Nov 92 Dec 92 Feb 93 Sales Re-Sales Stock outs (+24 % of whole sale price) Market downs( -8% of wholesale price)
  11. 12. Questions & Answer
  12. 13. 1. Using the sample data given in Table 3 -19 , make a recommend for how many units of each style Wally should make during the initial phase of production. Assume that all of 10 styles in the sample problem are made in Hong Kong and that Wally’s initial production commitment must be at least 10,000 units. Ignore price differences among styles in your initial analysis?
  13. 14. 3. Repeat your methodology and assume now that all 10 styles are made in China. What is the difference (If any) between the two initial production commitments?
  14. 15. 1. & 3. Comparison units of each style when produced in HK and China
  15. 16. Differences between production in HK and China <ul><li>Inventory </li></ul><ul><li>Total Cost </li></ul><ul><li>Operation Time </li></ul><ul><li>Quality (% Repair) </li></ul>
  16. 17. 1. & 3. The differences between production in HK and China
  17. 18. 2. Can you come up a measure of risk associated with an your ordering policy? This measure should be quantifiable.
  18. 19. <ul><li>Stock outs (-24 % whole sale price) </li></ul><ul><li>Market downs( -8% of wholesale price) </li></ul><ul><li>(Old) designs </li></ul><ul><li>High inventory holding cost </li></ul><ul><li>-Unable to fully profit from hit products </li></ul>What’s the result if demand forecasting uncertainty?
  19. 20. Forecasts are always uncertain Why does risk happens ? Demand Average Standard deviation Standard deviation
  20. 21. How can we assessing forecast certainty? 1 . Based on historical data - Past forecast error - Variability of demand
  21. 22. 2. Rather than producing one joint forecast ,each member of the purchasing committee produces his/her own forecast . Obermeyer’s Buying committee
  22. 23. 3. The deviation in views is good estimator of forecast reliability Table of standard deviation vs Coefficient of variation
  23. 24. 4. How is this information helpful ? - Using Early production Capacity ( Speculative capacity) for Assoult and Seduced - Reserve later production Capacity (reactive capacity) for Daphne and Anita as demand become more apparent “ Risk –based production planning”
  24. 25. 4. What operational changes would you recommend to Wally to improve performance?
  25. 26. <ul><li>Ski Clothes is fashionable product, Its life cycle is short </li></ul><ul><li>Long time of planning and production activities </li></ul><ul><li>Uncertain forecasting due to customer demand </li></ul><ul><li>Fashion taker >> No R&D </li></ul>KEY Problems:
  26. 27. <ul><li>Reducing number of styles handled and to predict customer demand for individual style. </li></ul><ul><li>To create promotion strategy to persuade retailers to order. </li></ul>OPERATIONAL Changes:
  27. 28. <ul><li>Production system </li></ul><ul><li>Increasing production Quality of China to be closed to Hong Kong. </li></ul><ul><li>To reduce lead time of production especially the preparation of raw materials . </li></ul>OPERATIONAL Changes:
  28. 29. Lead time reduction <ul><li>Fabric dyer lead time of several months </li></ul><ul><li>Dyer has long lead time on greige goods and needed to keep their capacity utilized year round but can change colors overnight </li></ul><ul><li>Obermeyer can predict total annual sales and sales of basic colors, but can’t predict fashion colors </li></ul>Fabric Producer Fabric Dyer Cut/Sew Factory Denver Warehouse Retailer undyed greige goods Sport Obermeyer Asia Consumer
  29. 30. <ul><li>Solution: </li></ul><ul><li>Offer dyer one year commitment on greige goods and capacity </li></ul><ul><li>Dye basic colors early in year and fashion colors late in season on few days notice </li></ul>
  30. 31. <ul><li>Supply chain system </li></ul><ul><li>Increasing bargaining power with suppliers by ordering via big supplier that can commit on timeline </li></ul><ul><li>To collect stock raw materials which is base on Ski cloth production </li></ul>OPERATIONAL Changes:
  31. 32. <ul><li>Increasing distribution channel to a country that have different period of product usage </li></ul><ul><li>Increase services level requirements </li></ul><ul><li>Establish DC in Seattle to reduce lead time and cost from inland transportation from Seattle to Denver </li></ul>OPERATIONAL Changes:
  32. 33. Hong Kong Seattle Original distribution process Establish Distribution Center in Seattle without through Denver
  33. 34. <ul><li>Information system </li></ul><ul><li>Collect the data backward and analyze the demand of the show in Vegas and compare with actual purchase. </li></ul><ul><li>Expedition of data and information and utilize historical data / Committee forecasting / Research and Trend & Market Movement. </li></ul>OPERATIONAL Changes:
  34. 35. 5. How should Wally think (both short term and long term) about sourcing in Hong Kong versus China? What kind of sourcing policy do you recommend?
  35. 36. Production Options <ul><li>Hong Kong </li></ul><ul><ul><li>Faster </li></ul></ul><ul><ul><li>More flexible </li></ul></ul><ul><ul><li>High / Reliable Quality </li></ul></ul><ul><li>Concern </li></ul><ul><ul><li>Smaller lot sizes </li></ul></ul><ul><ul><li>Higher labor cost </li></ul></ul><ul><li>China </li></ul><ul><li>(Guangdong, Lo Village) </li></ul><ul><ul><li>Lower labor cost </li></ul></ul><ul><ul><li>Larger lot sizes </li></ul></ul><ul><li>Concern </li></ul><ul><ul><li>Quality & Reliability </li></ul></ul><ul><ul><li>Slower </li></ul></ul><ul><ul><li>Less flexible </li></ul></ul>
  36. 37. Where is better? <ul><li>Short term </li></ul>Long term Hong Kong China
  37. 38. Skiing is a celebration of life Klaus Obermeyer Thank you
  38. 39. Women’s Collection
  39. 40. Young’s Collection Dharma Jacket - 51103
  40. 41. Competitors The Jacobs Corporation founded by David L . Jacobs Biography
  41. 42. Competitors The North Face, Inc. : subsidiary of VF Corporation
  42. 43. Competitors Burton Snowboards founded by Jake Burton Carpenter Innovative Burton outerwear performance meets leading Motorola Bluetooth ® technology
  43. 44. Manufacturing Structure: Sport Obermeyer Ltd. Obersport Ltd. <ul><li>Alpine Ltd </li></ul><ul><li>Hong Kong </li></ul><ul><li>Macau </li></ul><ul><li>China </li></ul>Other subcontractors Lo Village
  44. 45. The Supply Chain Textile and Accessories Suppliers Apparel Manufacturers Sport Obermeyer Retailers Obersport Produce, dye and print shell and lining fabrics, supply insulation, zippers, thread, logo patches and snaps. Subcontractors, receive production orders and materials from Obersport. Cut, sew and final assembly. Responsible for material and production sourcing in the Far East. It also acts as a distribution centre for materials and finished goods. Product design, production planning and sales. Purchase from Sport Obermeyer and sell products to consumers.
  45. 46. Obermeyer’s planning calendar
  46. 47. Product Transportation Hong Kong Warehouse Seattle Obermeyer’s Denver Warehouse then transported by trucks goods produced in August were air-shipped Retailers orders were finally shipped via small-package carriers such as UPS at the end of August 1993 Cost $5 per parka products made in June and July were transported by ships
  47. 48. Retailers Specialty Ski-Retail Stores Department Stores Direct Mail Retailers Consumers Most sales occur between September and January Delivering products by early September Sport Obermeyer
  48. 49. SUPPLY CHAIN Management: Jan Dec Jan Dec Apr Jul Oct Apr Jul Oct 1992 1993 Committee forecast Munich show & Las Vegas show Design process Production Process I Ordering process I Ordering process II Peak Sales Shipment process Approved Production Process II Replenishing process II 1994 Jan Apr Jul Re-Sales Original planning & production cycle
  49. 50. SUPPLY CHAIN Management: Jan Dec Jan Dec Apr Jul Oct Apr Jul Oct 1992 1993 Munich show & Las Vegas show Design process Production Process I Ordering process I Ordering process II Peak Sales Shipment Process I Approved Production Process II Replenishing process 1994 Jan Apr Jul Re-Sales Recommended planning & production cycle <ul><li>Committee forecast </li></ul><ul><li>Data Analysis & Research </li></ul><ul><li>IS (Trend / Movement) </li></ul>Forecasting I Forecasting II Forecasting III Shipment Process II

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