OBERMEYER CASE STUDY

Anirudda Aserker
Degusa Patel
Kajol Pitale
Purva Joshi
Q.1 Would you recommend an efficient or a responsive supply chain for Sport obermeyer?
Ans. We would recommend Responsive Supply chain for sport Obermeyer because they are making
innovative product not functional product.
Fisher matrix for functional and innovative product

The Obermeyer case study shows that the company displays all the classic characteristics of an innovative
product as defined by Fisher Matrix

High cost of lost sale

High risk of obsolescence
How forecast accuracy
High product variety
Short product life cycle.

Following the recommendations by Fisher on appropriate supply strategies for innovative products such
as Obermeyers, the company has to adapt to become more market responsive rather physically efficient
(which is more appropriate for functional products).
To become more market responsive
The company needs its factory focus to zero in on maintaining buffer capacity
Its lead-time focus is to aggressively shorten lead-time in order to minimize the risk of varying
market demands during their manufacturing stage.
Supplier selection should also consider speed and flexibility as parameter

Companies like Obermeyer, which offers innovative products, should be able to respond to uncertain
market reaction to innovation such as new designs. In Obermeyers case their designs change every
year, and such innovation multiplies the risk and possible costs of shortages or excess supplies.
Q.3 What operational changes would you recommend wally to improve performance?
Ans. Key Problems:
Ski cloth is a fashionable product having short life cycle
Long time for planning and production activities
Uncertain forecast due to customer demand and change in fashion

Following are the operations changes recommended to Wally to improve performance:

Improve the demand forecasts made by buying committee. they Should use a weighted average
method instead of just using a simple average.
Obtaining market feedback earlier than Las Vegas which can help converting some Speculative
production to Reactive production. For maximising the value of this feedback Sport Obermeyers
should include both small and large retailers
Predicting customer demand for individual styles and also if possible reducing number of styles.

Production system
Increasing quality of production in china
Reducing lead time of production specifically for preparation of raw materials.
Decreasing lead time for finished goods, which in turn will help to cater to existing capacity
Company should emphasize more on dependability than on cost.
Choose raw material suppliers on the basis of ease of availability rather than cost factor
Process fast and efficiently orders through information sharing with suppliers
Building a local production unit for any last minute orders.

Supply chain
Increasing bargaining power with suppliers by ordering from big supplier who can commit to be
on time
Establish distribution centre in Seattle to reduce lead time and cost through inland transportation
from Seattle to Denver

Information Systems

Collect old data and analyse demand of show in Vegas and compare with actual purchase.
Using historical data to capture the market trend and market movement
Q.4 How should sport Obermeyer think about sourcing in Hong Kong versus sourcing in China?

Long Term
China

Overcome
limitations of
manufacturing
in China

Short Term
Hong Kong

Comparison of manufacturing in China Vs. Manufacturing in Hong Kong

Hong Kong China
Cost of production very high Cheaper to produce, extremely low wage rates,
higher overtime hours, lower labor cost per
garment of .78 US $ compared to 9.69 US $ in
Hong Kong
Smaller volumes required, 600 Units in same Larger volumes required, 1200 Units in same
style, More flexible style
Less flexible
Staff is more cross trained, Faster production Staff is less cross trained , Slower production
Staff is more efficient, 10 people in each Staff is more inefficient, 40 people in each parka
parka line line, leading to greater imbalance in these lines
Each employee produces, twice as much as Quality concerns
Chinese workers
Challenges Challenges
1. Wage rate 1. Workforce
2. Work force a. Less quality and cleanliness
a. Low unemployment conscious
b. Younger workers prefer b. Training requirements
office jobs
Smaller lead times for raw material Higher lead times for raw material
Problems of manufacturing in China
Quality and reliability of products produced in China
Larger minimum order and quota restriction on products
Skill level of Hong Kong is much better than China
Raw materials procured from suppliers from different countries increases lead time

So the policy should be to produce in Hong Kong in short term and try to overcome limitations of
China by making below sequential improvements and in long term production should be done in
China.
1. Increase efficiency of staff by training them at Hong Kong and giving them cross trainings
2. Quality can be improved by improving the process (KPIs, eliminating waste from system)