Sport Obermeyer , Ltd
I. Operational changes to improve performance
The main issues for Obermeyer are operating in an environment with long lead times of two years for product development. Uncertainty in demand, which drives Obermeyer to have uncertainty in all the supply chain as the trigger to start the production is the decision central offices have about the design.
The enormous quantity of different combinations between materials can make their ordering a really complex task. As an example, we can observe the number of zippers combinations that can go up to 144,000 or snaps that can be in numbers of 500 different combinations.
The second big issue in material management is the lead times of the principal and more expensive components of the parka. The Grieg Shell Fabric can take up to 90 and the dying or printing process can take up to 60 days. To have a good response the materials orders should be taken in a lot of advance raising the cost of inventory in raw materials for the parka.
The best approach to solve the materials management problem
• Negotiating shorter lead times for raw materials
• Having a bigger stock of the materials that have a longer lead time to buffer the waiting time
• Develop standard features (as colors, zippers or snaps) that make the total product combination smaller and more profitable.
The company can improve performance by improving:
• The cost of goods sold
• Inventory holding costs
• Transportation costs
• Loss of sales from stock outs
• And rush orders.
Receiving sales information
As the current ordering cycle is set up, Obermeyer looks at past success and begins designing nearly two years before the product reaches retail stores. The time it takes from when the process begins to when the retail outlets receive their first shipment is roughly 17 months.
The design process 7 months
Sample production and promotion 6 to 7 months
Raw material sourcing...