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Copy of Case Study of Sport Obermeyer

Harvard Business School Case Study
by

Liem Mars

on 10 July 2014

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Transcript of Copy of Case Study of Sport Obermeyer

Improved
Design Process
Reduction of SKUs.
Seperation of the design process and the shows in Munich and Las Vegas.
R&D department development.
Combined
Wally-Klaus Strategy
Production Advantages
in China
95% Lower wage.
Lower labor/garment cost.
Potential for improvement.
Marios Kontos, Spyros Skopos and Stefanos Charistos
Sport Obermeyer, Ltd.
Case Study

Sport Obermeyer, Ltd.
Established in 1947 (Aspen, Colorado).
Idea: More stylish skiers' clothing.
Starting strategy:
Durable, high-performance clothing imported from Germany.
Original designs for ski clothing and equipment.
(e.g. First goose-down vest out comforter in the 50s)
Most critical design: Parkas.
Estimated sales in 1992: $32.8m with 11% market share.
Subsidiary: Obersport, Ltd.
Quantitative Methods
for Risk Management
No Restrictions
China Restrictions
Hong Kong Restrictions
What disrupts
Obermeyer's
supply chain?
Production Advantages
in Hong Kong
Workers work about 50% faster.
Cross-trained.
Shorter production lines.
Smaller order quantities.
Cheaper shipping.
No quota restrictions.
Wrap-up
Forecast accuracy is essential.

Better cooperation between supply chain's partners.

Production facilities must optimize production and decrease inventory risks.

Short-term Hong Kong-China.

Long-term China.
Obersport, Ltd.

Established in 1985.
Offshore outsourcing.
Production coordination for Sport Obermeyer:
Fabric sourcing,
Component sourcing,
Assembly line.
Manufacturing plants in Hong Kong and China.
Order Policies
Inaccurate forecasts
Long Lead times
Operational Improvements
Improved
Design Process
Better Supply Chain's Vendors
Improved Forecast Accuracy

Shorter Lead times

Short & Long-term Production Strategy
1. Higher production quantity in Hong Kong.
2. Investment in China's workers' training.
3. Application of suggested operational improvements.
4. Return on investment.
5. Negotiations with China for smaller minimum order quantity.
6. Production focus in China.
Sport Obermeyer Today
Cooperation with Bentley and SIA
NGC software
Supply Chain software
Fashion PLM (Product Lifecycle Management)
ERP systems (Enterprise Resourcing Planning systems)
WMS (Warehouse Management Systems)
14% improvement in margin level.
Return of investment in just 21 months.
According to Gregory Bannister,
Sport Obermeyer's COO
Advancements in technology and design
Cross-functional strategy
Extended wear innovation
I-GROW EWS (extended wear system)

CV (Coefficient of Variation)
Wholesale Price
# RANKING (PRICE+CV) CV Q*
1 Seduced 0.2770 1,017.00
2 Assault 0.2693 1,054.00
3 Entice 0.3652 1,178.00
4 Gail 0.3815 2,128.00
5 Anita 0.6353 507.00
6 Isis 0.6199 555.00
7 Daphne 0.5849 597.00
8 Electra 0.3753 1,730.00
9 Teri 0.6927 1,234.00
10 Stephanie 0.9415 -
SUM 10,000.00


Reduce/Reuse/Recycle system
Saving energy
Hydroelectric plant
Use of recycled fabrics
# RANKING (PRICE+CV) PRICE CV
1 Seduced $73.00 0.27707
2 Assault $90.00 0.26931
3 Entice $80.00 0.36524
4 Gail $110.00 0.38151
5 Anita $93.00 0.63532
6 Isis $99.00 0.61996
7 Daphne $148.00 0.58498
8 Electra $173.00 0.37535
9 Teri $123.00 0.69273
10 Stephanie $133.00 0.94160


Natural resources protection program
Reforestation initiative
Employee Commute Program
Environmental
Awareness

Corporate Social
Responsibility
Better
Cooperation Between Supply Chain's Partners
SC coordination with effective contracts:
Better pricing,
Faster supply of components,
Competitive advantage.
Integration of SC's partners in forecasting procedure.
Participation of SO's employees in the
solution of major problems by creating
incentives.
Cross-docking in Los Angeles
Combined
Wally-Klaus Strategy
Klaus:
Intuitive style,
Extensive industry experience.
Wally
Formal data-gathering,
Analytical techniques.
Green
Manufacturing Plant
in USA (nearshoring)
Reduced lead time

Improved forecast accuracy
Improved SC responsiveness:
Reduced cost,
Reduced lead time for late orders,
Emergency stock.
Job openings for US citizens.
Marketing tool:
Better reputation,
Green energy consumption.
Mar 93
Jun-Aug 93
Aug-Apr 94
Nov 92
Feb-Sept 92
SKU promotions
Las Vegas Show for 93-94 line.
80% retailers' order received.
Second production order with Obersport.
Full-scale production.
Shipping & Handling
First orders via ocean carriers (June 93).
Late orders via air freight (August 93).
Retail Activities
Design Activities
Design process begins.
Las Vegas show 92-93 line.
Prototype production.
Designs finalized.
Production Planning
First production order with Obersport.
Fabric orders.
Component orders.
Print/dye orders.
Final samples ready for Las Vegas Show.
Sept 93
Feb 94
Apr 94
Aug 93
Oct 93
Nov 93
Dec 93
Jan 94
Mar 94
Sales
Order Delivery
to Retailers
Discount
Period
Order Cycle
Push-Pull Strategy
# RANKING (PRICE+CV) CV Q*
1 Seduced 0.2770 1,017.00
2 Assault 0.2693 1,054.00
3 Entice 0.3652 1,178.00
4 Gail 0.3815 2,128.00
5 Anita 0.6353 600.00
6 Isis 0.6199 600.00
7 Daphne 0.5849 600.00
8 Electra 0.3753 1,730.00
9 Teri 0.6927 1,234.00
10 Stephanie 0.9415 -
SUM 10,141.00

# RANKING (PRICE+CV) CV Q*
1 Seduced 0.2770 1,200.00
2 Assault 0.2693 1,200.00
3 Entice 0.3652 1,200.00
4 Gail 0.3815 2,128.00
5 Anita 0.6353 1,200.00
6 Isis 0.6199 1,200.00
7 Daphne 0.5849 1,200.00
8 Electra 0.3753 1,730.00
9 Teri 0.6927 1,234.00
10 Stephanie 0.9415 -
SUM 12,292.00

Newsboy
Contexts
1. Sport Obermeyer
2. Order policies
3. Risk management
4. Supply chain disruption
5. Operational improvements
6. Short & Long-term strategy
7. Sport Obermeyer today
8. Wrap-up
Any questions?
Thank you for your attention!
mariosmk@auth.gr
stefanoscharistos@hotmail.com
skopspyr@auth.gr
29/05/14
22,92% Difference
1,41% Difference
Full transcript