Operational Analysis Harvard Case Solution & Analysis

Background:
This case study is mainly dealing with a family owned company with brand Sport Obermeyer, which was founded by Klaus Obermeyer in the year 1947. The emergence of the business idea came into existence by looking at the opportunity of providing the students a solution, which will save them from cold and make it convenient for the students to receive Parka in the form of Skiwear. The idea was very much appreciated and it received a positive response from the customers because its major target market was schoolchildren and adults going to university and colleges.This made around 56% market share in total.
The company was growing rapidly with continuous efforts and dedication from the owner and his wife, who were striving very hard to grow their business and introduce those designs, which are innovative and creative and attract the audience along with providing protection against the cold weather. They had introduced different styles and colours and they werelocated in Hong Kong.
Operations Management Assignment – Inventory Management Harvard Case Solution & Analysis

a) Operational Changes:
The Sport Obermeyer Limited Company was facing operational issues and challenges due to the inappropriate forecasting of its production budget, which was leading to shortage or higher inventory cost for the company. Moreover, the company was also facing issues and some operational challenges along with the decision of place of carrying out its manufacturing activities and sourcing of raw materials to minimize its inventory cost.
The operational changes can be recommended in such a manner so that, its inventory cost is minimized and company should focus on increasing its service level. This will provide a better opportunity to the company for developing a better working environment and will result in the timely delivery of the products without increasing its inventory cost.
Company may also focus on developing the marketing strategies based on promotions and the strategies will be pull or push marketing strategies. This will involve retailers actively by pushing them to sell different variants of company’s products and providing them discounts will motivate them to see the product.
Company can also expand in Asian markets to diversify itsbusiness and gain more market share and customer base. This will provide the company a chance to boost itsrevenues and profitability.
Company is required to develop its distribution centre close to the manufacturing facility for reducing the transportation cost and save time.
Company can also reduce the lead-time of the delivery of the product, which will result in maximization of the company’s profits and reduction in inventory cost of the company.
b) Short term and Long term Sourcing options:
The company’s management is required to take into consideration an optimal strategy for bringing an optimal production solution through the strategic alliance between China and Hong Kong operations.
If we look at the long term sourcing options, the company may try to negotiate more and try to make the minimum order quantity below 1200, so that it can minimize its holding cost of inventory.
Moreover, the company may also try to shift its production to China because it will lead to lower production cost and qualified and skilled labour force, which are trained to work for more hours effectively and efficiently as compared to Hong Kong labour force.

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