Sport Obermeyer Goes Big With ERP Overhaul

Editor's Note: We're closing out 2014 with a last look at one of the year's Top Innovators and inspiring our readers to nominate a worthy company for 2015.

Alpine skiing aficionados will easily recognize the Sport Obermeyer name. The family-run apparel business, helmed by CEO and co-founder Klaus Obermeyer for the past 67 years, has blossomed over time, gaining footholds in most of the major skiing countries (Switzerland, Russia) and establishing strong relationships with both major outdoor retailers such as REI as well as smaller specialty stores.

But as the company grew, it struggled beneath the burden of legacy systems and processes that couldn't serve the business's evolving needs. COO Gregory Bannister took a long hard look at the company, analyzing everything from soup to nuts, and recommended to Klaus that Sport Obermeyer upgrade to NGC's integrated suite of ERP, PLM and supply chain management sourcing. In other words, go big, or go home.

"I told Klaus, ‘you've either got to do this really, really fast or not at all,'" explains Bannister. "‘If you don't do it at all, you're going to have years of problems because the systems are so bad.'" In some instances, "systems" might be an overstatement — or at the very least, a considerable stretch. For example, information on supply chain activities previously boiled down to conversations between three or four key people, all conducted via email. There was no transparent way to know what was being said in those supply chain emails, which the production manager described as "a disaster."

"We'd been having problems with on-time shipping, and everyone was blaming the factory, but it was an internally self-induced problem," explains Bannister. "You're making the factory nervous with all kinds of requests that aren't centralized and accrued by the production manager." Sport Obermeyer's legacy PLM software didn't talk to other systems and seemed to exist only to host tech packs. The legacy ERP was a homegrown affair that also didn't integrate with anything else.

Costing and purchase orders were both handled via spreadsheets. Employees who wanted to perform margin analysis, for example, were unable to because, Bannister explains, "you couldn't trust any of the costs in the old system."

The company's warehouse operations previously were all manual, a considerable undertaking that generated mountains of documentation. "We had three kitchen table-sized tables stacked high with paperwork," says Bannister. Now Sport Obermeyer's warehouse is fully automated with a WMS, RF barcode readers and optimized picking and packing, but getting employees to think "systemically" instead of with "human emotion" has been a big change. "Putting in new systems is the easy part," Bannister explains. "It's the process changes and retraining that's the hard part."

Describing the four-month NGC implementation as "brutally fast by anyone's standards," Bannister says upfront training was key to the project's success. He spent hours on end writing more policies than procedures, covering everything from how to interact with customers to guidelines for managing discounts. Despite the risk of undertaking such a monumental implementation
in so short a time span, Sport Obermeyer realized results quickly, even outpacing conservative forecasts. The company got its investments back on the NGC system largely due to how fast it was implemented and the "things we corrected in a short amount of time," Bannister notes.

"I kept revising my ROI because even though we were spending money, we were saving money so fast and the time to achieve ROI kept going down, down, down. "Initially I was forecasting 28 months for ROI, but we achieved it in less than 20 months," he adds.

Whereas previously Sport Obermeyer's costs weren't managed in a single, central location, consolidating those costs has helped the firm understand what exactly its costs are, and "attack margin in a lot of areas where we didn't have enough," says Bannister. 

Perhaps the most transformative experience has been with supply chain management. Since going live on the SCM software, Sport Obermeyer not only collaborates more intuitively with its factories in El Salvador, Bangladesh and China but also is now two months ahead in shipping compared to last year, which is "absolutely huge," Bannister notes. "That means we can get product into stores sooner and our reorder sell-through is going to be better."
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