Obermeyer limited is a cloth production factory that produces stylish and fashionable clothes for all genders. Sports Obermeyer thrives in an industry that has a lot of 'fashion gambling'. In this paper, things Wally should think about when choosing the quantity to order for each style as discussed in the case study provided. Moreover, operational changes recommendations essential to improve performance will be discussed as well as the considerations management should take in place when sourcing in china versus Hong-Kong.
In the efforts to determine the quantity to order for each style in November, Wally should consider the popularity of the style. Understanding the popular style would help the company to have enough amounts of styles and avoid running out of the products. The other consideration is the selling record of the style. Some styles would record huge amounts of losses when sold at huge discounts, which were way down the wholesale prices. The company should order fewer amounts of these styles (Hammond & Raman, 2016, p. 2). Furthermore, Wally should think about where each style will be manufactured in. It is important to understand the manufacturing factory for the style to understand the minimum quantities that can be produced by the certain company. Briefly, before deciding the amount to order in every style, Wally should first clear the demand uncertainty on different styles.
In every business, operational changes are effective in ensuring better performance of the company. Obermeyer limited would require four major operational changes that will improve performance both in the short run as well as in the longer term. First, standardization should be ensured in the production. Even though standardization is seen as a killer to innovation, standardization, in this case, should be employed in those styles that disparities lead to increased costs. Integration is the second operational changes the company should embrace. The processes used to develop styles should be integrated to avoid duplication of resources compared to using one process for one style. Similarly, it will lead to reduced costs. Another major step to operational changes is centralization. Obermeyer limited has different locations for production that translates to increased costs of transportation of both raw materials and finished products. Having a central location for production would reduce transportation expenses as well as avoid duplication of assets. Finally, the company should optimize performance. Optimization involves finding the balance between cost, market availability, as well as quality.
Obermeyer limited management need to take the following factors while deciding on sourcing in both China and Hong-Kong. Human resource asset is a crucial asset of any business. The management should consider the ability of workforces in both factories. The labor force in Hong-Kong is faster and well skilled compared to that of China. The other factor to think about is the minimum production quantity of each factory. For instance, Hong-Kong factory-600 units are lower than that of China factory- 1200 units (Hammond & Raman, 2016, p. 8). While sourcing, the management should identify the style that would be best producing in either China or Hong-Kong having in mind the reliability and quality of each factory.
In conclusion, before Wally decides on the amount to order it is important to be certain about the demand to avoid worst sales records on some styles. Moreover, the popular style should be identified. It is also significant for the corporation to implement the operational changes of standardization, centralization, optimization, and integration. Besides, the management should understand the workforce ability and minimum production quantities while sourcing for Hong-Kong and China.
Bibliography
Hammond, J. & Raman, A. 2016. Sport Obermeyer, Ltd. Havard Business School, pp. 1-19.
