MRP Project

Sports Obermeyer Ltd Case study

Sports Obermeyer Case study

BY: 34242: Maulik Parekh 34253: Amit Savinkar 34233: Mahender Kumar 34192: Jyoti Rajguru

MRP Project
Ordering management Ordering management Planning process

Sports Obermeyer Ltd Case study

Q1: What should Wally do? How much should he order at the beginning of the season? Which plant should supply the production? Q2: Which styles should he order and in what mix?

Demand forecasting process

Understand the demand variations, within the team and in the market Defining service level for each item, considering profit on sales and loss on unsold inventory Identifying costing of each item as % of total items Identify which items to order and in how much quantity Identify which plant to supply from ideally Check if MOQ is satisfied or not Select a plant based on MOQ requirements

Supply chain

Spreadsheet
Long term strategies

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Process overview Ordering management Planning process Feb-May 92

Sports Obermeyer Ltd Case study

Q3: Pictorially depict the planning process for Sport Obermeyer. How can Sport Obermeyer improve its planning process?

Feb 92 design team senior management attend show at Munich, to see European offering Mar 92,Major trade show in Las Vegas, input for design of 9394 May 92 design concepts finalized

Demand forecasting process

June 92March- 93

July 92 prototype production at Obersports limited Sep 92,refined final design completed ,production of sample to show retailer at Las Vegas During sep 92-mar 93 start determining fabrics and component requirement form initial Production Order

Supply chain Feb 93Sept- 93 Long term strategies Feb 93 cutting and sewing of 1st order Mar 13 retailer place 80% of order June-July garments shipped from Hong Kong warehouse to Seattle and by sep to distributors Goods produced in Aug shipped by air freight, high sale product replaced from stocks

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Supply chain Process Ordering management Planning process

Sports Obermeyer Ltd Case study

Q6: Which supply chain processes should he improve? What are your recommendations?

Denver Distribution center

Obermeyer HKG warehouse Sub contractors
shell fabric Lead time 4560 days Prepositon Source: Japan,US,swit zerland,Germ any ,austria,korea, Taiwan

Demand forecasting process

Printing Screens

Zippers YKKs

Supply chain

Leadtime 4560days
Source: same as fabric

Leadtime 6090days
Source : Japan, HKG

Colour and other accessories In lab dips Lead time 2weeks

Long term strategies

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Key planning Parameters Ordering management Planning process

Sports Obermeyer Ltd Case study

Q5: What are the key planning parameters e.g. lead times, safety stocks, lot sizes

Demand forecasting process

Supply chain

1. Forecast (Aggregate, SKU, Component level) 2. Master Data Material Master Bill of material Resources (machineries) Routing All these includes parameters such as Lead time Safety stock Order Quantities 3. Inventories Component level, pipeline etc.

Long term strategies

MRP Project
Demand Forecasting Ordering management Planning process

Sports Obermeyer Ltd Case study

Q4: How can Wally improve the Obermeyers demand forecasting process and model?

Demand forecasting process

Supply chain

Long term strategies

MRP Project
Demand Forecasting Ordering management Planning process

Sports Obermeyer Ltd Case study

Q4: How can Wally improve the Obermeyers demand forecasting process and model?

Demand forecasting process

Supply chain

Long term strategies

MRP Project
Demand Forecasting Ordering management Planning process

Sports Obermeyer Ltd Case study

Q4: How can Wally improve the Obermeyers demand forecasting process and model?

Demand forecasting process

Supply chain

Long term strategies

MRP Project
Demand Forecasting: Recommendations Ordering management Planning process

Sports Obermeyer Ltd Case study

Q4: How can Wally improve the Obermeyers demand forecasting process and model?

Demand forecasting process

Supply chain

Long term strategies

1. Improve the internal demand forecasts before Speculative Production 2. Instead of using just a simple average of the individual forecast use a weighted average, with the weights reflecting past accuracy 3. Obtain market feedback earlier than Las Vegas, converting some Speculative Production to Reactive Production 4. Arrange retailers meet before annual fair 5. Use Accurate Response Method of forecasting 6. Use a small amount of sales data early in the life of the product to update forecasts: Effective use of early sales data typically reduces the forecast error margin from +/- 50-100% to about +/- 10% 7. At any point in time and at each point in the supply chain, choose inventory levels for a given product to maximize over the life of the product, total dollar gross margin less the cost of inventory carrying and obsolescence. Among other things, this requires estimating a margin of error on the forecast and to help do this we ask several forecasters to independently predict demand and use the dispersion of their forecasts as a measure of risk. 8. Use various approaches to reduce lead-time to be better able to react to early sales information.

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Existing Supply chain Ordering management Planning process

Sports Obermeyer Ltd Case study

Q7:How should Wally restructure his supply chain from a longer term perspective?

Textile and Accessories Suppliers

Apparel Manufacturers
Demand forecasting process

Obersport Sport Obermeyer

Supply chain

Long term strategies

Retailers

MRP Project
Supply chain Problems Ordering management Planning process

Sports Obermeyer Ltd Case study

Q7:How should Wally restructure his supply chain from a longer term perspective?

Inaccurate forecast Short product life-cycle

Demand forecasting process

Little or no feedback from market

Supply chain Long Lead times Long term strategies

Problems

No actual market research

MRP Project
Critical path

Sports Obermeyer Ltd Case study

Q7:How should Wally restructure his supply chain from a longer term perspective?

Ordering management Planning process

1. Selection of the production facility

Demand forecasting process

2. Production planning for different SKUs

3. Pre-positioning or contract for Greige fabric 4. Dyeing and Printing 5. YKK Zippers

Supply chain

Long term strategies

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Long Term Strategy recommendations Ordering management Planning process

Sports Obermeyer Ltd Case study

Q8: What should be the long term competitive strategy for Sport Obermeyer?

Demand forecasting process

Supply chain

Proactive Procurement Reduce number of SKUs offered, according to demand for individual style Contracts with supplier for timely delivery of products, treat them as business partners so that they adhere to timeline quality. Have profit sharing and information sharing model with suppliers/partners Run the processes parallel to reduce lead times Conduct market research to find out market trends and future requirement Do promotional activities for the end-user as well as retailers Provide training and support to Chinese workers to reduce cost Explore different markets segments for the ski-apparels and establish distribution centers Improve the product portfolio

Long term strategies