Sport Obermeyer, Ltd. is a winter, high performance skiwear fashion company established in 1947. The company offers a “broad line of fashion ski apparel, including parkas, vests, ski suits, shells, ski pants, sweaters, turtlenecks, and accessories.” (Hammond and Raman 1).
In recent years, the founder’s son has taken over major management responsibilities as the company’s Vice President, and he is hoping to address some challenges faced by the company. The challenges are in the areas of forecast accuracy, order turnaround time, and the expense of overseas production facilities.
Preparation for each season’s clothing line is a two year process. The cycle begins with a lengthy design and prototype production process. Full scale production begins about six months later, and after about a year from initial conception design feedback is finally received from retailers at an important trade show in Las Vegas.
This trade show helps in setting market trends and gives retailers the opportunity to begin placing orders for items that are already in full scale production.
Sport Obermeyer has major production capabilities in Hong Kong and China. Currently, they are manufacturing about one third of their items out of the Chinese facility due to low labor costs of $0.16 per hour for each employee.
The facility in Hong Kong is more costly in terms of labor at $3.85 per hour for each employee. However, the Hong Kong facility offers higher skilled employees, and thus has a greater ability to adhere to restrictions and regulations, such as those imposed by the U.S. government.
The Hong Kong facility also has the ability to produce smaller minimum order quantities of 600 units per style, while the Chinese facility requires a minimum order of 1,200 units per style.
One of the setbacks of the organization is the long production lead time. It takes 2 years from the initial design process to the time the product gets to the sales line. This is due to manufacturing delays, as well as the distant location of the factories.
Another problem is the inaccurate forecast of sales and demand, as the market keeps fluctuating, the ability to determine the level of sales becomes hard to establish. This leads to a difficulty in distributing the product and properly allocating the resources according to the customers’ wants.
The product variety is also an area of concern, as the organization struggles to find the needed design and functionality of the sport wear. Hong Kong and China locations are much distant from the buyer’s market, and it becomes detrimental to the organization in finding out what is requested by the public.
An advised recommendation is to increase the response from the public. This can be accomplished by surveying the clients through online and phone evaluation. The short term solutions can be reached by adjusting production to the local requirements.
This would enable the company to satisfy the needs of the population and design products that are in demand. The long term solutions have to deal with the company’s management. More specifically, the company must adhere to the standards of quality manufacturing (Pride 2010).
The implementation plan has to start from within and begin at the structure of the company. The risk of any change is moderate, as there are several possible routes that a business can take. In case the product amount is increased there is a possibility of low demand. If the quality of the product becomes the main focus, it might become too expensive to produce and sell, so it is crucial that a productive balance is found.
Works Cited
Hammond, Janice and Ananth Raman. “Sport Obermeyer, Ltd.” Harvard Business School. (2006): 1-19. Print.
Pride, William. Business. Mason, OH: Cengage Learning, 2010. Print.