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• Harvard Business School →
• Faculty & Research →
• October 1994 (Revised August 2006)
• HBS Case Collection

Sport Obermeyer Ltd.

• Format: Print
• | Language: English
• | Pages: 19

About The Authors

Janice H. Hammond

Ananth Raman

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Sport Obermeyer Ltd.

By: Janice H. Hammond, Ananth Raman

The case describes operations at a skiwear design and merchandising company and its supply partner. Introduces production planning for short-life-cycle products with uncertain demand and allows…

• Length: 19 page(s)
• Publication Date: Oct 13, 1994
• Discipline: Operations Management
• Product #: 695022-PDF-ENG

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The case describes operations at a skiwear design and merchandising company and its supply partner. Introduces production planning for short-life-cycle products with uncertain demand and allows students to analyze a reduced version of the company's production planning problem. In addition, it provides details about information and material flows that allow students to make recommendations for operational improvements, including comparisons between sourcing products in Hong Kong and China.

Learning Objectives

Teaches students how to match supply with demand for products with high demand uncertainty and a globally dispersed supply chain.

Oct 13, 1994 (Revised: Aug 15, 2006)

Discipline:

Operations Management

Harvard Business School

695022-PDF-ENG

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Case Study Sport Obermeyer IELM 4410 Global Supply Chain Management

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Sport Obermeyer Ltd.: Supply Chain Management Case Study

Sport Obermeyer Ltd. has long been regarded as a pioneer in the outdoor apparel industry, known for its innovative designs and high-quality products. However, behind the scenes, the company has faced intricate challenges in managing its supply chain effectively.

From demand forecasting to global production management and inventory optimization, Sport Obermeyer has navigated a complex web of decisions to maintain a competitive edge. This case study provides a fascinating glimpse into the intricate balance between flexibility and efficiency, the pivotal role of supplier relationships, and the integration of technology in the supply chain.

As we explore the intricacies of Sport Obermeyer's supply chain management, we uncover the critical decisions and strategies that have shaped the company's success, presenting valuable insights for professionals in the industry.

Company Overview

Sport Obermeyer Ltd is a renowned outdoor apparel company with a rich history of innovation and commitment to quality. Founded in 1947 by Klaus Obermeyer, the company has a storied company history of revolutionizing the ski industry with its cutting-edge designs and high-performance products. Obermeyer's passion for skiing and dedication to creating functional, stylish skiwear has been the driving force behind the brand's success.

One of the key factors that set Sport Obermeyer Ltd apart from its competitors is its relentless commitment to product innovation. The company has consistently pushed the boundaries of design and technology to create ski apparel that meets the evolving needs of customers. From introducing innovative insulation techniques to pioneering breathable, waterproof fabrics, Obermeyer has been at the forefront of skiwear innovation for decades.

Over the years, Sport Obermeyer Ltd has built a reputation for producing high-quality, durable outdoor apparel that is both fashionable and functional. The company's unwavering dedication to excellence and innovation has solidified its position as a leader in the outdoor apparel industry.

Demand Forecasting Challenges

Demand forecasting in the context of Sport Obermeyer Ltd presents several challenges. The company must grapple with the uncertainty of predicting consumer preferences and purchasing patterns. Additionally, they must deal with seasonal demand variations and the impact of external factors on demand. Ensuring the accuracy of forecasts is crucial, highlighting the need for robust forecasting methods. Furthermore, an agile supply chain is necessary to adapt to fluctuating demand.

Accuracy of Forecasts

The accuracy of forecasts in supply chain management presents significant challenges for companies like Sport Obermeyer Ltd as they strive to meet customer demand while minimizing excess inventory. Forecasting accuracy directly impacts inventory management, as inaccurate forecasts can lead to either stockouts or excess inventory.

Sport Obermeyer faces the difficulty of accurately predicting customer preferences for various skiwear styles and colors, which are highly seasonal and can be affected by unpredictable weather patterns. Additionally, long lead times for manufacturing and sourcing materials intensify the impact of forecast inaccuracies.

To address this, Sport Obermeyer has implemented strategies such as collaborative forecasting with retailers, utilizing advanced analytics, and maintaining flexibility in production to adjust to changing demand patterns.

Despite these efforts, achieving precise forecasting accuracy remains a persistent challenge in their supply chain management.

Seasonal Demand Variations

Challenged by the seasonal variations in customer demand, Sport Obermeyer Ltd grapples with the complexities of forecasting accurate demand for its skiwear styles and colors, a pivotal aspect in supply chain management. This presents several challenges:

• Inventory management and production scheduling become intricate due to the need to anticipate demand for various styles and colors accurately.
• Capacity planning is crucial to ensure that the production facilities can handle the fluctuations in demand effectively.
• Order fulfillment becomes challenging as the company must balance meeting current demand while limiting excess inventory for the next season.

These challenges highlight the importance of precise demand forecasting in managing seasonal variations, as it directly impacts inventory management, production scheduling, capacity planning, and order fulfillment.

Global Production Management

Global Production Management involves overseeing the manufacturing and production processes of goods on a global scale to ensure efficiency and quality.

In the context of Sport Obermeyer Ltd., production planning is crucial in managing the global production of skiwear to meet seasonal demand variations. The company needs to develop effective sourcing strategies to optimize the production process and minimize lead times.

This involves identifying the most suitable locations for manufacturing, considering factors such as labor costs, production capabilities, and transportation logistics.

Additionally, Sport Obermeyer needs to establish strong relationships with global suppliers to ensure consistent access to high-quality materials and components.

By effectively managing global production, the company can mitigate the challenges of long lead times and ensure that the right products are available at the right time to meet fluctuating customer demand.

Inventory Optimization Strategies

When it comes to inventory optimization strategies, two key points come to the forefront: demand forecasting methods and production lead time.

These critical factors play a significant role in determining the most effective approach to managing inventory levels and ensuring customer demand is met. By understanding and addressing these points, companies can strategically optimize their inventory to minimize excess stock and enhance overall supply chain efficiency.

Demand Forecasting Methods

Effective demand forecasting methods are essential for inventory optimization strategies in the supply chain management of any company. To achieve accurate demand forecasting, businesses utilize a combination of quantitative techniques and qualitative analysis.

Some common methods include:

• Quantitative Techniques : This involves using historical sales data, statistical modeling, and time series analysis to forecast future demand patterns.
• Qualitative Analysis : This method involves gathering insights from market experts, customers, and sales representatives to understand factors such as changing consumer preferences, market trends, and potential disruptions.

Production Lead Time

Production lead time plays a crucial role in inventory optimization strategies, directly impacting the accuracy of demand forecasting methods employed by companies. Reducing lead time is essential for enhancing production efficiency and maintaining optimal inventory levels. By minimizing lead time, companies can respond more effectively to changes in customer demand and market trends, thereby reducing the risk of excess inventory or stockouts. This can be achieved through various strategies such as improving production processes, streamlining supply chain operations, and fostering closer collaboration with suppliers. Additionally, leveraging technology and data analytics can help in identifying areas for lead time reduction and enhancing overall production efficiency. The table below illustrates key strategies for reducing production lead time and optimizing inventory management.

Balancing Flexibility and Efficiency

To achieve optimal performance, Sport Obermeyer Ltd must carefully navigate the delicate balance between flexibility and efficiency in its supply chain management. This balance is essential due to the flexibility challenges posed by the need to offer a wide range of product styles and colors while efficiently managing production and inventory.

The company faces several key considerations:

• Forecasting Accuracy : Balancing flexibility and efficiency requires accurate forecasting to align production with customer demand while minimizing excess inventory and stockouts.
• Lead Time Management : Effectively managing lead times is crucial to meet customer demand for diverse products without incurring excessive production and inventory costs.
• Supplier Collaboration : Collaborating closely with suppliers helps in achieving the delicate balance between flexibility and efficiency by ensuring timely access to materials and components while maintaining cost-effectiveness.

Sport Obermeyer Ltd must continuously evaluate and adjust its supply chain strategies to address the inherent flexibility challenges and efficiency trade-offs, ultimately meeting customer needs while optimizing operational performance.

Supplier Relationships

Navigating the delicate balance between flexibility and efficiency in supply chain management, Sport Obermeyer Ltd emphasizes the cultivation of strong and collaborative relationships with its suppliers to optimize operational performance.

Supplier collaboration is a cornerstone of their approach, enabling the company to effectively manage inventory and respond swiftly to market demands. By fostering close ties with suppliers, Sport Obermeyer Ltd gains crucial insights into market trends and consumer preferences, allowing for more accurate demand forecasting and streamlined production planning.

Furthermore, these robust supplier relationships contribute to enhancing supply chain resilience and mitigating risks. In an industry where demand variability and seasonality pose significant challenges, the company relies on its suppliers to adapt quickly to changing market dynamics. Through close collaboration, they can navigate uncertainties and reduce lead times, bolstering overall supply chain agility and responsiveness.

Sport Obermeyer Ltd's emphasis on supplier relationships goes beyond mere transactional interactions, underscoring the strategic significance of these partnerships in achieving operational excellence and competitive advantage. By building trust, aligning goals, and fostering open communication, the company fortifies its supply chain against disruptions and elevates its capacity to meet customer expectations.

Technology Integration

Incorporating advanced technological solutions into its supply chain operations, Sport Obermeyer Ltd seeks to enhance efficiency and adaptability while leveraging data-driven insights to optimize production and distribution processes.

• Integration Challenges

Sport Obermeyer faces the challenge of integrating various technological systems and platforms to ensure seamless communication and data flow across the supply chain. This includes integrating inventory management systems, production planning software, and logistics optimization tools.

• Digital Transformation Opportunities

The company recognizes the potential for digital transformation to revolutionize its supply chain operations. By leveraging technologies such as Internet of Things (IoT), big data analytics, and cloud-based solutions, Sport Obermeyer aims to gain real-time visibility into inventory levels, demand patterns, and production processes. This will enable proactive decision-making and agile responsiveness to market fluctuations.

• Adoption of Advanced Planning Systems

Sport Obermeyer is exploring the implementation of advanced planning systems that can harness the power of artificial intelligence and machine learning. These systems can improve demand forecasting accuracy, streamline production scheduling, and optimize inventory replenishment, paving the way for a more agile and efficient supply chain.

Risk Management

Amidst the complexity of global supply chain dynamics, Sport Obermeyer Ltd diligently assesses and mitigates potential risks to ensure operational resilience and continuity. The company recognizes that effective risk management is essential for maintaining a competitive edge in the fashion industry.

Sport Obermeyer conducts thorough risk assessments to identify vulnerabilities within its supply chain, including potential disruptions due to factors such as raw material shortages, transportation delays, or geopolitical instability. By understanding these risks, the company can proactively implement strategies to minimize their impact and maintain a consistent flow of production.

In the face of supply chain disruptions, Sport Obermeyer leverages its risk management strategies to swiftly address and mitigate challenges. For instance, the company may develop alternative sourcing options for critical materials, maintain buffer stocks to cushion against unexpected shortages, or establish robust communication channels with suppliers to quickly adapt to changing circumstances.

Furthermore, Sport Obermeyer fosters close relationships with key partners and suppliers, fostering collaboration and transparency to collectively address and navigate potential risks. By prioritizing risk management, Sport Obermeyer ensures a resilient and adaptable supply chain, enabling the company to effectively navigate uncertainties and maintain its commitment to delivering high-quality products to the market.

Future Opportunities

In light of its robust risk management practices, Sport Obermeyer Ltd is poised to strategically capitalize on future opportunities within the global fashion supply chain. The company can leverage its strengths to explore new avenues for growth and innovation, positioning itself as a leading player in the industry.

Key future opportunities for Sport Obermeyer Ltd include:

• Innovation Strategies : By investing in research and development, the company can continue to pioneer innovative technologies and sustainable practices within the fashion supply chain. This could involve developing advanced materials, improving manufacturing processes, and enhancing product design to stay ahead of market trends.
• Market Expansion Opportunities : Sport Obermeyer Ltd can explore new markets and distribution channels to expand its global presence. This may involve targeting emerging markets, establishing strategic partnerships with retailers, or leveraging e-commerce platforms to reach a wider customer base.
• Sustainable Initiatives : With an increasing focus on sustainability and ethical sourcing in the fashion industry, Sport Obermeyer Ltd can capitalize on opportunities to develop environmentally friendly products and implement sustainable practices throughout its supply chain.

In conclusion, the examination of Sport Obermeyer Ltd.'s supply chain management reveals the complex and multifaceted nature of global production and inventory optimization.

The company faces significant demand forecasting challenges and must carefully balance flexibility and efficiency in its operations.

Furthermore, it must navigate supplier relationships and integrate technology to mitigate risk.

As Sport Obermeyer Ltd. continues to evolve, there are future opportunities for improvement and growth in its supply chain management strategies.

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Sport Obermeyer Harvard Case Solution & Analysis

Home >> Harvard Case Study Analysis Solutions >> Sport Obermeyer

Sport Obermeyer Case Solution

Case overview:

Sport Obermeyer Ltd. was established in 1947 and founded by Klaus Obermeyer, started its operations in Aspen Colorado.The company used to produce stylish Skier’s clothing and achieved a highly competitive position in the US skiwear market. The company imported its raw material from Germany that will result in high quality performance clothing.

In 1992, the company generated sales of $ 32.8 million and gained the market share of 45% and 11% in the US market for Children and adults respectively. The target market of the company is middle to high end consumers in the Skiwear market where the company can provide excellent price to value services in functionality as well as style. Then in 1985, the company started it’s outsource offshoring and introduced its manufacturing plants in Hong Kong and in China.

The case provides the information that will help to determine the type of supply chain design and provide the recommendation in order to avoid the demand uncertainty and manage the risks in unplanned events.

Type of Supply Chain design:

The supply chain design and strategy provides the operational strategy that converts the raw material into finished products.The company is using the Lead time variability design in its supply chain, which includes two important elements such as; order lead time (to produce ad ship the products) and information lead time (processing and ordering of the products).

The supply chain design of the Company goes with the flow of (1) Textile suppliers; that print, dye and produces the line of fabrics (2) Apparel manufacturers; that uses to cut, sew and assemble the clothes (3) Obersport; material and production sourcing and also manages the distribution center. (4) Sport Obermeyer; it involves the design production, and plan the sales and production demand and lastly (5) Retailers; sell to the end consumers after purchasing from the company.

Designs they need to implement and why:

The company produces mainly innovative product and due to high market intervention the company requires speed and flexibility in order to make long time of planning and efficient production. For this purpose; the company should reduce its clothing styles that help to handle and to predict the consumer demand in each style. Along with this, the company should create promotion strategy to attract the retailers and improve the production system that will help to reduce the lead time for efficient production.

Propose new ideas to help Obermeyer to reduce and avoid demand uncertainty:

In order to reduce the demand errors; the company should use effective marketing promotional strategies that will help to increase the service level. For this purpose, the company should adopt the new frameworks that will improve the performance and profitability. Therefore, the company should introduce new distribution channel that may help to promotion of different products and decrease the lead time delivery of popular items in order to maximize the profitability and the market share. Along with this, the company should follow competitive pricing strategy by targeting adult ski market.

The unplanned events that could affect Obermeyer Supply Chain

The company’s unplanned events such as; inaccurate demand forecasting that are leading to excess production of not so popular products and results in lack of popular products production.As, it is observed that the major unplanned events includes;

• The erroneous demand forecasting
• Long lead time

Theses unplanned events resulted in a large quantity of merchandising and the products were sold out at discounts and hence resulted in loss of sales..................

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Product Description

Publication Date: October 13, 1994

Source: Harvard Business School

The case describes operations at a skiwear design and merchandising company and its supply partner. Introduces production planning for short-life-cycle products with uncertain demand and allows students to analyze a reduced version of the company's production planning problem. In addition, it provides details about information and material flows that allow students to make recommendations for operational improvements, including comparisons between sourcing products in Hong Kong and China.

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Sport Obermeyer Ltd.

Subjects Covered Demand analysis Forecasting International operations Production planning Sourcing

by Janice H. Hammond, Ananth Raman

Source: HBS Premier Case Collection

19 pages. Publication Date: Oct 13, 1994. Prod. #: 695022-PDF-ENG

Sport Obermeyer Ltd.Harvard Case Study Solution and HBR and HBS Case Analysis

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Case Study Solutions

Sport Obermeyer Ltd.

Subjects Covered Demand analysis Forecasting International operations Production planning Sourcing

by Janice H. Hammond, Ananth Raman

Source: HBS Premier Case Collection

19 pages. Publication Date: Oct 13, 1994. Prod. #: 695022-PDF-ENG

Sport Obermeyer Ltd.Harvard Case Study Solution and HBR and HBS Case Analysis

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