How do ski manufactures keep the numbers correct?

[Wish]

Each year a new ski comes out of just about every ski manufacture if not more then one. How do they manage NOT to make to many of the "old" ones before introducing and selling the new?. Or is that factored into what we pay. I remember seeing a photo a while back of a dumpster FULL of high end OBrien skis. This goes with other items like gloves, vests, and the like. I was at Performance the other day and saw a bunch of last years stock of Radar Vice gloves (do not buy BTW..D-ring is plastic and will snap). There seems to be such a small margin in profit vs production that I'm wondering just how it is done. I'm pretty sure I've seen most of the closeout sites. Are there other dumpsters full of product out there?

[GOODESkier]

You might have just hit on a secret of some companies........ if a company builds to order, then you never exceed the sold amount so to speak.

[oldjeep]

Wakehouse is still selling some 2012's I kind of doubt that the factory trashes them, some smart retailer just gets a deal on whatever is left.

 

 

[Horton]

I don't believe there is very much waste at all. The factories don't keep that much stock on hand. In the case of Radar they "seem" to build at about the rate of sales year round.

 

I seriously doubt perfectly good skis are going in the trash.

[chris_logan]

I purchased some of the first '14 A3's from Wade and he had them shipped directly to me. They arrived 4 days after they had been made. At least for HO, I think they only manufacture sold orders.

[chris_logan]

Plus, I bet these companies would do a lot better to write off extra stock (like the dumpster full of high end OBrien skis) and donate them to college teams. Almost every college team out there can provide 501©3 paperwork for anything donated to make those items tax deductible.

[Horton]

I have to assume the dumpster full of O'BRIEN skis is a misunderstanding. @wish are you talking about that image of Andy's dumpster from about 3 years ago? Pretty sure that was many years worth of R&D skis.

[Chef23]

I would also guess that most companies have a pretty good idea of how many high end skis they sell each year. Unless the ski they develop is a dud and nobody wants to ski on it I am sure they are working off a forecast from previous years to build an appropriate number of skis. If you look at Radar this year the retail channel was short on Vapors in 66 and 67 which appear to have sold better than they expected.

 

I believe that Goode primarily builds to order and doesn't sell through retail. I am sure they have a few skis in popular sizes in inventory but probably not too many.

[MattP]

@wish what @horton said

[Wish]

@MattP insightful as always. @Horton the dumpster comment was more to spur discussion and interest. That dumpster goes back to the O'Brien "Mapple" ski (blue). That's more then 3 yrs ago. But like I said it was soooo full. I get what that was.

 

Anyway, that wasn't the gist of the question/thread. Was actually interested in how they figured that out. The margin of error has to be slim for them to make money on these products and the target audience is relatively small compared to other sports. Any industry folks would want to weigh in?

[ForrestGump]

Every mf'r has different forecasting methods. But forecasting sales and production schedules for skis is no different than for car tires. You take into account your historical sales figures, your expected growth, quality control, warranty returns, etc. It's someone's job to gather that data from the different groups and assemble it into a daily, weekly, and monthly production schedule for all of the product lines. Pretty basic business math.

[BraceMaker]

The soft goods have to be the most problematic, as I would assume that is all outsourced production requiring a hard quantity.

 

I would guess that they get stuck holding more soft goods than skis.

 

I would further want to know the number of skis it takes to pay off the mold, and the total number of skis the mold is good for.

[Horton]

I think I understand how Radar handles this. I do not want to speak for them but it is not rocket science.

[Waternut]

Well I can promise you they don't forecast the same way the government does.... You needed 100 last year, 150 this year, and another 150 next year? Cool, we'll put a contract out for 25 and see where we stand when that delivers.

[MattP]

My favorite part about this thread is the typical @Horton spelling mistake... (Hint: it's in the title of the thread)

 

@Wish I was going to type out what @Horton and @ShaneH said but they go to it first.

[Horton]

@MattP‌ it is not my typo for once so I left it. I assumed @wish was just trying to be more like me.

[TallSkinnyGuy]

Forecasting well is actually not an easy task. Even if you produce only what was ordered, those orders can get canceled for many reasons after a manufacturer has made the product but before they got paid. If you don't make enough product to fill orders you are losing sales and if you make too much then you usually have to move it at a much lower margin (this is to enable the reseller to make their required margin on a product with low demand).

 

Forecasting may start with historical sales but then has to include a bunch of assumptions, especially if it is a brand new product. Other assumptions have to include competitors' market entries, economic factors, growth rate of enthusiast interest, growth rate of distribution outlets, etc. Note that a "growth rate" can be positive or negative in direction.

 

Usually dumpsters only get filled with discarded prototypes or seized counterfeit product. Otherwise, the product has value and any company trying to stay alive will try to maximize that value. Of course, they have to be careful about moving products through channels that could tarnish the brand and/or set unrealistic expectations by customers (for example, having a lot of product on sale at deep discounts at the end of every season consistently causes customers to expect that every year and then not ever want to buy at full markup).

[SkiJay]

Forecasting sales is at least as hard on retailers--always either too much or too little stock, especially North of the 49th where the season only lasts for four months. Tough business!

[TallSkinnyGuy]

I think forecasting is actually harder for retailers because they don't get any "pre-orders" at all.

[Wish]

More like @Horton‌....hmmmm. That reminds me. I have to cancel my hair cut appointment.

[AdamCord]

@ShaneH has it right. You forecast, build it out, and hope you were right. The purpose of Surf Expo for the manufacturers is to try and get orders or at least forecasts from dealers/distributors that can be used to plan for production. Most of the new products at surf expo are one-offs that came in from the factory the day before, not something that's ready to go to production. That's why surf expo happens in September for the following year's product line, it gives the manufacturers time to build and deliver equipment before the next season starts (Feb/March timeframe).

 

I assure you it's pretty rare that something ends up in dumpsters. I can remember maybe one time where we still had stock of some 6+ year old tee shirts and hats that no one wanted, so we scrapped them out. This definitely doesn't happen with skis. Normally if there are leftover skis, which is really rare, they'll go to a retailer like Overton's who will blow them out on their website really quickly by running a "sale".

 

Most of the time we were building fewer skis than we needed, not more.

[6balls]

...and thus avoiding inventory carrying cost but perhaps losing sales. It's a balance and forecasting is difficult. If skis are able to be built quickly it's probably best to hedge the forecast conservatively and be ready to build the extra's rather than having excess unsold inventory.

[bassfooter]

@AdamCord - Might you be able to share who "we" is in your post?

[Chef23]

I think @AdamCord‌ used to work for O'Brien and I know he worked with Mapple for a while.

[Horton]

What @Chef23‌ said

[AdamCord]

@6balls - yeah we definitely lost some sales because of underbuilding. This was especially problematic with the Elite skis because they took so much longer to build than compression molded skis.

 

The Connelly/HO/Obrien factory in Lynnwood, WA is set up pretty well now because they can print their own graphics and CNC their own cores which means they don't really have to wait for anything to start production on a particular ski. Their lead time is really low. I'm not sure what Radar has but I think they are in a similar situation. It becomes much more difficult to build the right amount of skis when you have long lead times for some of the materials.

 

@Chef23 you've got it right, unfortunately I had to grow up and get a real job at some point!