Minahil Javed | 20110299

Sport Obermeyer, Ltd.

Case Summary
Sports Obermeyer, a fashion skiwear brand based in Aspen, Colorado, was founded in 1947 by
Klaus Obermeyer when he moved to United States as an instructor at Aspen Skiing School.
Klaus observed that most of his students lacked proper skiing clothes and thus were cold and
miserable because of that. The organization offered products like parkas, vests, ski suits etc. and
each product had five different categories based on gender; Men, Women, Boys, Girls and
Preschoolers. Over the years, Sports Obermeyer successfully established as a distinguished
competitor in the US market with estimated sales of $32.8 million in 1992 and a 45% share of
the children skiwear market. Sport Obermeyer primarily distinguished itself by providing an
exceptional price/value relationship to its consumers. However, the skiwear made by the
organization, unlike its competitors, was solely to be used for skiing. The administration at the
organization believed their success relied on two logistical related activities;
i. Sending out coordinated collection of products to retailers at the same time
ii. Making product delivery to retailer early in the selling season
Over the years, Klaus Obermeyer has run the organization with one philosophy and that was to
“achieve harmony”. He believed that any organization should run “tension free” and by putting
trust in its people and providing value to the customers. However, when Wally Obermeyer joined
Sport Obermeyer in 1989, he brought with him a rather different yet formal style of managing
which relied on “formal data gathering and analytical techniques”.
Production Structure:

Sport Obermeyer

Obersport Ltd.

Subcontracter
Alpine (Hong
(hong Kong,
Kong)
China, Macau)

Lo Village (China)
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The Order Cycle:

The organization sells its manufactured goods via specialty ski-retail stores which are based in
both urban areas and near ski-resorts. In addition to that, Sport Obermeyer also sells through
large departmental stores and direct mail retailers. The whole process prior to actual sales being
made takes up to two years.
1. Design Process:
 February 1992 – Begins
 March 1992 – Additional information from Las Vegas show
 May 1992 – Design concepts finalized
 July 1992 – Protype Production
 September 1992 – Finalized Designs
2. Sample Production:
 September 1992 – Begins
 March 1993 – Samples shown to retailers during the weak-long Las Vegas show
3. Raw Material Sourcing and Production:
 September 19922 – Begins
 February 1993 – Cutting and Sewing of first production order
4. Retailer Ordering Process:
 March 1993 – Most retailers place orders during the weak-long Las Vegas show
 March 1993 (Week following Las Vegas show) – 80% of annual volume orders
received + forecast for total demand made and second and final production order
placed
 April & May – Remainder of retailer’s regular orders received
 Peak Retail Sales Season – Replenishment orders for popular items placed
5. Shipment to Obermeyer Warehouse:
 June & July 1993 – Products transported by ship from Obersport’s Hong Kong
warehouse to Seattle + trucked to Obermeyer’s Denver distribution center
 August 1993 – Production of this month is air shipped to Denver
6. Shipment to Retail; Retail Replenishment Orders:
 End of August 1993 – Orders shipped to retailers via small package carriers like
UPS
 September, October & November 1993 – Gradual Sales Built
 December 1993 & January 1994 – Peak Sales + replenishment orders being
placed for popular items
 February 1994 – Replenishments items offered to retailers at a discount +
Retailers marking down prices on remaining stock
Sport Obermeyer liquidates inventory at the yearend via two process:
i. Engaging in barter trade
ii. Sending leftover products way under manufacturing cost to business sectors in South
America
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Supply Chain:

Textile and
Apparel Sport
Accessory Obersport Retailers
Manufacturers Obermeyer
Suppliers

•Raw materials •Cut and sew •Supervise •Forecast, design •Customers

•Zipper, Fabric •Dying and production •Ship to retailers •Market feedback
Printing •Manage
production
•Ensure quality

China vs. Hong Kong:

Hong Kong China
Cost of Production High Low
Flexibility More Less
Production Speed Fast Slow
Efficiency High Low
Quality Concerns Low High
Lead Time for Raw Low High
Materials

Production Planning:
Currently, Wally had an imperative job on his hand as he was supposed to immediately come up
with the feasible production number for the first phase of the order cycle for 1993-1994 season.
Accurate predictions have not been easy in recent times due to a huge variety of products offered
as well as an intense competition in the market thus subsequently leading to inaccurate forecasts
of retailer demand by Sport Obermeyer. This has resulted in two complications arising; excess
merchandise of products that were not purchased and recurrent shortage of popular items. Hence,
Wally had two major conflicts to resolve while making the forecast for 1993-1994 season which
are as follows:
i. Determine the appropriate demand estimate from uncertain and disparate forecasts
individually made by the members of the “Buying Committee”
ii. Allocation of production - which and how many products to be produced in Hong Kong
and China
*Several statements are directly quoted from the case*