SPORT OBERMEYER , LTD.
A) What Operational changes would you recommend to Wally to improve performance?
B) How should Obermeyer management think (both short and long-term) about sourcing in Hong Kong vs. China?
C) Based on Exhibit 10 in the case, how should Wally plan production in November? Think about the question qualitatively – identify factors that would affect the timing and quantity of product decisions.
To understand what operational changes we could recommend to Wally first we have to analyse external and internal factors, which are leading to company problems.
The world of fashion is unpredictable and has a short life-cycle and in the fashion skiwear business, which is extremely competitive as all fashion industry, demands is highly dependent on a variety of factors that are difficult to predict.
There are only two months long of peak of the retail-selling season (December-January) on ski-wear business. Small delays in delivery time can cause big financial losses.
In this case we have problems with forecasting that involves wrong production and lead to missing sales opportunities, overstock, and loosing money.
The company face a “fashion gamble” each year manufacturing in advance, before market response, knowing that market trends may change in the meantime.
They have relatively straightforward cycle (design the product, make samples, shows samples to retailers, place orders to produce, receive retail orders, receive goods in the distribution centre and then ship them to retailers). They have to develop a more complex supply chain, which would provide to reduce manufacturing cost.
If reduce the lead time it might help the company react rapidly to market demands and reduce the needs for sedulous forecasting by several months ahead of delivery to retails.
Supply chain changes have to focus on keeping raw materials and factory-production capacity undifferentiated as long as...