Professional Documents
Culture Documents
Group 8
About Obermeyer
Founded in 1947 in Aspen, Colorado Sport Obermeyer was born of necessity by Klaus Obermeyer. As an Aspen ski instructor, he became aware of the need to keep his ski school students warm and dry . Today, Obermeyer continues to design and produce innovative and technically responsible authentic skiwear from the heart of the Rocky mountains
Issues
Question: What are the issues driving this case?
How to measure demand uncertainty from disparate forecasts How to allocate production between the factories in Hong Kong and China
Inaccurate forecasts
Deep discounts Lost sales
Production Options
Hong Kong
More expensive Smaller lot sizes Faster More flexible
Mainland
Cheaper Larger lot sizes Slower Less flexible
Order Cycle
Sold its products primarily through specialty ski-retail stores, located either in urban areas or near ski resorts. Also few large department store and direct mail retailers Most retailers requested full delivery of orders prior to the start of retail season Peak sales occurred in December and January
Design process
Design process began in 1992 Europe more fashion forward than US Major trade show for ski equipment and apparel was held in Las Vegas Sketches were sent to Obersport for prototype production in July and designs were finalized by September
Sample Production
As soon as designs were finalized, Obersport began production of sample garments small quantities of each style-color combination for the sales force to show to retailers. Sales representatives started to show samples to retailers during the week-long Las Vegas show, typically held in March, and then took them to retail sites throughout the rest of the spring.
Supply Chain
Obermeyer sourced most of its outerwear products through Obersport Obermeyer would specify how it wanted the fabric to be dyed or printed. Obersport purchased shell fabric from vendors in the United States, Japan, Korea, Germany, Austria, Taiwan, and Switzerland. Lining fabric was sourced primarily from Korea and Taiwan.
Prior to the start of the season, Obersport would work with its subcontractors to prepare a small batch for each color that was required in a given fabric. In addition ObersPort worked with its printing subcontractors to develop "screens" which would be used to print patterns on fabric.
Immediately after receiving production instructions from Sport Obermeyer Obersport asked subcontractors to dye or print fabric. Insulation materials were purchased from DuPont, whose licensees in Hong Kong, Taiwan, Korea and China could provide them within two weeks. Many snaps were purchased from German vendors
Most zippers were purchased from YKK, a large Japanese zipper manufacturer. Approximately 6O% of Obersport's zipper requirements were sourced from YKK's Hong Kong factory, where standard zippers were manufactured. Obermeyer products were produced in a number of different factories in Hong Kong and China.
Where to produce
Obermeyer expects to produce about half of all its products in China. Problems; 1. Larger minimum order limit the companys ability to increase the range of product 2. Is increased production in China risky due to its uncertain trade relationship with US