Sport Obermeyer Case Study

Summary Sport Obermeyer Case Study

Sport Obermeyer Ltd. is a skiwear manufacturer headquartered in Colorado, USA. The company

aims to attract a wide variety of customers therefore offering a broad range of products tailored to the

different target group.

Being in the specialist fashion industry, Sport Obermeyer faces a number of challenges. In addition,

some of the Supply Chain characteristics do not allow the company to smooth out these industry-

related challenges but instead exacerbate them.

Challenges fashion industry

First, fashion trends are difficult to be predicted accurately, making it difficult to plan production,

logistics and sales related activities in advance. Sport Obermeyer aims to deal with this challenge by

increasing its forecasting accuracy.

Secondly, a good forecasting accuracy is essential as fashion products are somewhat "perishable".

Fashion skiwear can typically only be sold with a profit within one season.

Thirdly, skiwear fashion only enjoys a rather short sales period of a few months with peak sales

occurring in December and January. Accordingly, the cost of lost sales is high.

Lastly, the market for skiwear is highly dynamic with new competitors like Columbia Sportswear

entering the market as a lower price, high volume producer gaining a significant market share within a

few seasons.

Challenges Obermeyer's Supply Chain

A number of challenges and issues specific to Obermeyer's Supply Chain are mentioned throughout

the case. The most predominant ones are briefly discussed below.

Firstly, Obermeyer's Supply Chain requires a long time-to-market. As such, the company has to

start placing its first orders months before the market demand is known. The main reason seems

to be a highly disintegrated Supply Chain resulting in long lead times. Relatively high minimum

order quantities only allow a production cycle that is neither suitable to the fashion industry nor cost

optimized from a SC perspective. A long time-to-market period is in particular undesirable as it could

only be offset with a good forecasting accuracy.

The second issue follows on from the long lead times and the disintegrated Supply Chain.

Obermeyer's SC is carrying a high level of inventory. Aiming to offset the long lead times, Supply

Chain members like Obersport have engaged in activities such as "pre-positioning" of materials

which leads to even more inventory. As a result, the entire Supply Chain has difficulty competing

successfully on the market as the total Supply Chain costs are too high.

Lastly, Obermeyer does not receive any qualified feedback from the US fashion market until March

when the trade show in Vegas happens. Supply Chain wide information sharing about demand

expectations and trends does not seem to take place.

In summary, Obermeyer should first address the disintegrated Supply Chain by optimizing the Supply

Chain wide operations and increasing