Klaus Obermeyer founded Obermeyer in 1947 in Aspen, Colorado. In 1985, Obermeyer formed a joint venture called Obersport in Hong Kong to increase production capacity. Obermeyer's supply chain stretches from Asia to Aspen, with textile and accessory suppliers in Asia manufacturing garments that are then shipped through Obersport and Sport Obermeyer to retailers in the US. Obermeyer faces challenges in uncertain demand forecasting for its seasonal ski fashion products and long lead times in its Asian manufacturing process.

2. COMPANY History : “ Skiing is a celebration of life” Klaus Obermeyer 1947: Klaus Obermeyer, a German immigrant began teaching at the Aspen Ski School

3. COMPANY History: 1985: Obersport; a joint venture in Hong Kong , the company began to increase productivity to meet their new d emands.

4. COMPANY Network: Recently, a number of contractual ventures were added and a new complex in Lo Village Guangdong China

5. PRODUCT & Segmentation :

6. PRODUCT Variety:

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

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:

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:

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)

12. Questions & Answer

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?

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?

15. 1. & 3. Comparison units of each style when produced in HK and China

17. 1. & 3. The differences between production in HK and China

18. 2. Can you come up a measure of risk associated with an your ordering policy? This measure should be quantifiable.

20. Forecasts are always uncertain Why does risk happens ? Demand Average Standard deviation Standard deviation

21. How can we assessing forecast certainty? 1 . Based on historical data - Past forecast error - Variability of demand

22. 2. Rather than producing one joint forecast ,each member of the purchasing committee produces his/her own forecast . Obermeyer’s Buying committee

23. 3. The deviation in views is good estimator of forecast reliability Table of standard deviation vs Coefficient of variation

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”

25. 4. What operational changes would you recommend to Wally to improve performance?

33. Hong Kong Seattle Original distribution process Establish Distribution Center in Seattle without through Denver

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?

38. Skiing is a celebration of life Klaus Obermeyer Thank you

39. Women’s Collection

40. Young’s Collection Dharma Jacket - 51103

41. Competitors The Jacobs Corporation founded by David L . Jacobs Biography

42. Competitors The North Face, Inc. : subsidiary of VF Corporation

43. Competitors Burton Snowboards founded by Jake Burton Carpenter Innovative Burton outerwear performance meets leading Motorola Bluetooth ® technology

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.

46. Obermeyer’s planning calendar

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

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

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