Transcript
COMPANY History History:: 1947: Klaus Obermeyer, a German immigrant began teaching at the Aspen Ski School
³Skiing is a celebration of life´ Klaus Obermeyer
COMPANY History History:: 1947: Klaus Obermeyer, a German immigrant began teaching at the Aspen Ski School
³Skiing is a celebration of life´ Klaus Obermeyer
COMPANY History: 1985: Obe 1985: Obers rspo port rt;; a joi joint nt ven ventu ture re in Hong Hong Kon Kong, g, the the com compa pany ny began to increase productivity to meet their new demands.
COMPANY Network:
Recently, a number of contractual ventures were added and a new complex in Lo Village Guangdong China
PRODUCT & Segmentation: Segmentation:
PRODUCT Variety:
SUPPLY CHAIN Process:
Textile Raw and Accessories Materials Suppliers
Apparel Manufactures
Obersport
Finished Retailers goods
The Obermeyer supply chain stretches from Asia to Aspen
PLANNING & Production Cycle: Cycle :
Feb 92
Mar 92
May 92
Jul 92
Sep 92
Prototype, Sample Production
Design Process begins
Nov 92
Las Vegas Concept Show Finalise
Mar 93 Full
scale
Place 1st Production Las Vegas Order with Obersport Show
Sketches sent Designs to Obersport Finalised
Apr 93 - Jul 93
Dec 93-Feb 94
production
Additional orders received
Replenishment orders received
PRODUCTION Process: Asia Fabric Producer
6 wk Fabric Dyer
undyed greige goods
Cut/Sew Factory
6 wk Denver Warehouse
Retailer
6 weeks
Components
Procurement lead time
Greige Shell Fabric
45 ± 90 days
Finishing of Shell Fabric (Dying & Printing)
45 ± 60 days
Finished Lining Fabric
45 ± 60 days
Insulation
2 ± 3 weeks
Zippers
Standard (HK) 60 days, Custom (JP) 90+ days
Thread
30 days
Logo Patches, Drawcords, Hang Tags, etc.
15 ± 30 days
Snaps (undyed)
1 ± 2 months
Dyeing of Snaps
15 ± 30 days
Consumer
ORDERING & SHIPMENT Process: 6
Factories in Hong Kong
weeks
Denver warehouse
Seattle warehouse Order 80% in Mar 93
Order 20% in Apr-Jun 93
Forecasts
Product Sketches
Forecast Committee
Retailers order in Apr-Jun 93
800 Ski Retailers
SALES & REPLENISHING Process:
Aug 92
Sep 92
Oct 92
Nov 92
Dec 92
Feb 93 Sales
Peak Sales Stock
Re--Sales Re
outs (+ (+24 24 % of whole sale price)
Market downs( -8% of wholesale price)
1. Using the sample data given in Table 3-19 , make a recommend for how many units of each style Wally should make during the initial phase of production. Assume that all of of 10 styles in the sample problem are made in Hong Kong and that Wally¶s initial production commitment must be at least 10 10,,000 units. Ignore price differences among styles in your initial analysis?
3. Repeat your methodology and assume now that all 10 styles are made in China. What is the difference (If any) between the two initial production commitments?
1. & 3. Comparison units of each style when produced in HK and China
Differences between production in HK and China
Inventory Total Cost Operation Time Quality (% Repair)
1. & 3. The differences between production in HK and China
2.
Can you come up a measure of risk associated with an your ordering policy? This measure should be quantifiable.
What¶s the result if demand forecasting uncertainty? -Stock outs ((--24 % whole sale price) -Market downs( -8% of wholesale price) -(Old) designs -High inventory holding cost -Unable to fully profit from hit products
Why does risk happens ? Forecasts
are always uncertain
Standard
Standard
deviation
deviation
Demand Average
How can we assessing forecast certainty? 1 . Based on historical data - Past forecast error - Variability of demand
2.
Rather than producing one joint forecast ,each member of the purchasing committee produces his/her own forecast .
Obermeyer¶s Buying committee
3. The deviation in views is good estimator of forecast reliability
Table of standard deviation vs Coefficient of variation
4. How is this information helpful ? ³Risk ±based production planning´
- Using Early production Capacity ((Speculative Speculative capacity) for Assoult and Seduced - Reserve later production Capacity (reactive capacity) for Daphne and Anita as demand become more apparent
4. What operational changes would you recommend to Wally to improve performance?
KEY Problems: Ski Clothes is fashionable product, Its life cycle is short Long time of planning and production activities Uncertain forecasting due to customer demand Fashion taker >> No R&D
OPERATIONAL Changes: Reducing number of styles handled and to predict customer demand for individual style.
To create promotion strategy to persuade retailers to order.
OPERATIONAL Changes: Production
system
Increasing production Quality of China to be closed to Hong Kong. To reduce lead time of production especially the preparation of raw materials.
Lead
time reduction
Asia Fabric Producer
Fabric Dyer
undyed greige goods
Cut/Sew Factory
Denver Warehouse
Retailer
Consumer Sport Obermeyer
Fabric dyer lead time of several months Dyer has long lead time on greige goods and needed to keep their capacity utilized year round but can change colors overnight Obermeyer can predict total annual sales and sales of basic colors, but cant predict fashion colors
Solution:
Offer dyer one year commitment on greige goods and capacity Dye basic colors early in year and fashion colors late in season on few days notice
OPERATIONAL Changes: Supply
chain system
Increasing bargaining power with suppliers by ordering via big supplier that can commit on timeline To collect stock raw materials which is base on Ski cloth production
OPERATIONAL Changes: Increasing distribution channel to a country that have different period of product usage Increase services level requirements Establish DC in Seattle to reduce lead time and cost from inland transportation from Seattle to Denver
Original distribution process
Seattle
Hong
Establish Distribution Center in Seattle without through Denver
Kong
OPERATIONAL Changes: Information
system
Collect the data backward and analyze the demand of the show in Vegas and compare with actual purchase. Expedition of data and information and utilize historical data / Committee forecasting / Research and Trend & Market Movement.
5. How should Wally think (both short term and long term) about sourcing in Hong Kong versus China? What kind of sourcing policy do you recommend?
Hong
Production
Options
Kong
China
± Faster ± More flexible ± High / Reliable Quality
Concern ± Smaller lot sizes ± Higher labor cost
(Guangdong, Lo Village)
± Lower labor cost ± Larger lot sizes
Concern ± Quality & Reliability ± Slower ± Less flexible
Where is better? Short term
Hong
Kong
Long term
China
Thank
Klaus Obermeyer
you
Women¶s Collection
Young¶s
harma
Jacket - 51103
Collection
Competitors The Jacobs Corporation f ounded
by David L. Jacobs Biography
Competitors
The North Face, Inc. :
subsidiary of VF Corporation
Competitors
Burton f ounded
Snowboards by Jake Burton Carpenter
Innovative Burton outerwear perf ormance meets leading Motorola Bluetooth ®
technology
Manufacturing Structure:
Sport Obermeyer Ltd.
Obersport Ltd.
Alpine Ltd
Hong Kong Macau China
Lo Village
Other subcontractors
The Supply Chain Textile and Accessories Suppliers
Produce, dye and print shell and lining fabrics, supply insulation, zippers, thread, logo patches and snaps.
Apparel Manufacturers
Subcontractors, receive production orders and materials from Obersport. Cut, sew and final assembly.
Obersport
Sport
Responsible for material and production sourcing in the Far East. It also acts as a distribution centre for materials and finished goods. Product design, production planning and sales.
Obermeyer
Retailers
Purchase from Sport Obermeyer and sell products to consumers.
Obermeyer¶s planning calendar
Prod uct T ra nspor tati on Hong
products made in June and July were transported by ships
Seattle
Kong Warehouse
goods produced in August were air-shipped
then transported by trucks
Obermeyer¶s Denver Warehouse
Cost $5 per parka
orders were finally shipped via small-package carriers such as UPS at the end of August 1993
Retailers
Retailer s Delivering products by early September
Sport Obermeyer
Specialty SkiRetail Stores
Department Stores
Direct Mail Retailers
Most
sales occur between September and January
Consumers
SUPPLY CHAIN Management:
1992
Munich show &
1993
Las Vegas show Jan
Apr
Jul
Oct
Dec Jan
Apr
Jul
Oct
Dec
Peak Sales Committee forecast Design process
Production Shipment Production Process I process Process II
Approved
Ordering process I
Ordering process II
Replenishing process II
1994 Jan
Apr
Jul
Re--Sales Re
Original planning & production cycle