Sport Obermeyer, is a high end skiwear designer and merchandise company faced many issues when beginning their commitment in 1992 for their 1993 to 1994 production season. The company produces sweaters, vest, ski suits, pants, parkas and accessories. They offer various gender items from men, women, boys, girls and even preschoolers. One of the advantages that the company has is the fact that they offer excellent price/ value relationships to target groups. The company also faces many disadvantages and issues when preparing to produce these items. One of the major issues is that they receive little to no feedback from end users, which could affect the accuracy of their forecast. Another major issue is long lead times. One of the effects of inaccurate forecasts leads to the company having excess merchandise. This is caused by the producing too many products that retailers do no purchase and in the end, Obermeyer is left with overstock that they will have to sell at a deep discount. Selling the products at a deep discount, results in a loss of sales for the company. At times they also run out of their most popular products because they did not produce enough of the items, due to inaccurate forecasting.
In order to fix these issues, the company must make changes and adjustments to their operations. The key issues that need to be addressed were long lead times, inaccurate forecasting, and whether to increase production in its China or Hong Kong factories.
In order to decrease lead times we recommend that Obermeyer develop continuity of the buttons and zippers of its products. By doing this Obermeyer will be able to “pre- position” these items and in turn eliminate 60-90 days of lead time from these items. If these items are used uniformly, it will decrease the risk associated with purchasing them in bulk, before the production season. Even if all the items are not used in the same year they are purchased, they can be held over for the next year, with very little chance of waste. Also by increasing the amount of greige fabric that is pre-positioned will allow Obermeyer to decrease lead times by an additional 45- 90 days, depending on the country of origin. Greige fabric has not been cut or dyed, but is used for the outer shell in Obermeyer’s products. Obermeyer’s products can be cut and dyed to match the designs that Obermeyer creates, but always originates from greige fabric. The risk associated with pre-positioning greige fabric is low as well, due to the customization ability the fabric has, and also the fact that all Obermeyer products start with this fabric. Using both of these recommendations will allow Obermeyer to decrease lead times by about 2 months, thus shortening its production period.
Leveraging our initial recommendation to decrease lead times will allow Obermeyer to shorten its production period. With this shorter production period Obermeyer…