Prepare a case study on Supply Chain Management focusing on Sport Obermeyer

This case describes the forecasting, planning and production processes of a global skiwear supply channel. Sport Obermeyer Ltd. is a high-end fashion design and merchandising company that sells its products through U.S. department stores and ski shops. Although the company has a global supply network, most of its critical outerwear products are sourced through a Hong Kong based joint venture company, Obersport. It has to forecast the demand of its ski parkas almost a year in advance in a field where the fashions change quite fast. It leads to some complex decision making as the manufacturing lead time is very long. The supply chain spreads over many countries, some of the suppliers have very long lead times and the forecasts the company makes at the beginning are less accurate. The case highlights the challenges companies face when planning production for short-life cycle products, operational changes to reduce cost of stockouts and excess stock due to mismatched supply and demand, and other coordination issues in supply chains.

Answer the following questions:

1. What were the main challenges facing Sport Obermeyer? (Be sure to provide specific data as appropriate)
2. What factors constrain Sport Obermeyer’s production planning?
3. What operational changes would you recommend? Why would these changes add value?
4. Using the sample data given in Exhibit 10, make a recommendation for how many units of each style Wally Obermeyer should order during the initial phase of production. Assume that all ten styles in the sample problem are made in Hong Kong, and that Obermeyer’s initial production commitment must be at least 10,000 units. (Ignore price differences among styles in your initial analysis). Hints:
   • • You must place orders for at least 50% of the annual demand.
     • There is a limited production capacity (only about 50% of total). The rest is available for the Las Vegas show.

1. • • The earlier capacity should be used to produce the least risky items.

1. • • What is the risk in this context?

1. • • Items with high variability in demand (can result in large overstocking).

1. • • Items that are very expensive (overstocking can be very expensive).
     • For this exercise, we are not considering the price. So, focus only on the variability.
     • Also, focus on the minimum production requirement for any item – 600

1. • • units.

1. • Variability of demand is also called Coefficient of Variation (Std. Deviation/Mean).

Standards: