Sport Obermeyer case study
Name: Dhruv Bhatt
Member ID: 6000919
Date: 24 October 2014
For this case, we will focus on the skiwear part of the Obermeyer business. It has a current cycle time of 27 months. Skiwear market is just four months long but the design and production process takes over 16 months to complete.
Out the 27 months cycle, Obersport has 6 months to purchase, produce and deliver the products for winter selling in North America. Obersport is located in the Far East and currently his supplier lead-times is are really long and minimum orders is quite high. Currently, everybody in this global supply is really stretched to the limit to supply for the season. There is a high risk of inventory build-up and stock outs. This will pretty much affect the profitability and customer satisfaction.
Sport Obermeyer is currently operating in an environment where the planning and production cycle occurs almost two years in advance. This increases the uncertainty of demand, thus making accurate forecasting extremely difficult.
We can focus on some of the challenges or problems
Projecting challenge: Company can estimate the demand for different styles only after Las Vegas show. Production normally starts 5 months prior to the fashion show in order to meet the market demand. Most retailers send their order after 12 months in production. This condition will force Sport Obermeyer to forecast the demand from their previous experience and knowledge.
Product Challenges: Sport Obermeyer is very popular fashion Skiwear Company. There are competitors like Columbia and North face in market. With lower price and lots of verity, Columbia leads the adult skiwear market. Sport Obermeyer holds big market for children and female skiwear. Sport Obermeyer has broad line of styles; sizes and colors make demand projection and production of the products much more challenging compared to their competitor. One of the main challenges faced by company is longer lead times for shipping. The product is made for wintertime so it only last for 4-5 months however production time is over 16 months.
Manufacture Challenges: Sport Obermeyer has two facilities in China and Hong Kong for their production. Both have they’re pro and cons. China facility offers significant lower cost production against Hong Kong facility. Hong Kong facility provides higher quality products against china.
Environmental and Root Cause Analysis:
As Descried in above section the challenges and uncertainty faced by Sport Obermeyer is crucial. The company is forced to commit an order with manufactures before the demand is fulfilled.
Sport oberymer is facing longer lead-times since there is long supply chain process. Oberymer sourced most of its outwear product through Obersport. There are lots of designs, colors, accessories supplies need to be ordered and decided before production starts. Obeymenr contact fabric suppliers to manufacture specifies amount of fabric of a given type each month. Obermeyer would later indicate how it wanted the fabric to be dyed and printed. The process to print pattern on fabric take 6 weeks. Dyeing subcontractor required a lead-time of 45-60 days.
The materials once received by Obersport go through a cutting and sewing process. There are 40 steps to assembling a parka
Obersport also had to select other component like Buckles, buttons, zippers, rings, and pull-strings with attached casting. Buckles, pull strings and button were produced locally in Hong-Kong and had a 15 to 30 days lead-time. Zippers varied by length, type color, shape. More than 50% of zippers were sourced from YKKs Hong- Kong factory, where standard zippers were manufactured. Lead-time for these was 60 days. Rest were non- standardize zippers were purchased from Japan which has 90 days of lead-time....
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