Forecasting and Supply Chain Management at Deckers Outdoor Corporation
Length:
11:30
Subject:
“Forecasting and Supply Chain Management”
Textbook Reference:
Chapter 8: Forecasting, page 323
Summary
You may not recognize the corporate name, but Deckers Outdoor Corporation’s footwear products
are among some of the most well-known brands in the world. From UGG sheepskin boots and
Teva sport sandals, to Simple shoes, Deckers flip-flops and Tsubo footwear, Deckers is committed
to building niche footwear brands into global brands with market leadership positions. Net sales
for fiscal year 2007 were close to $449 million. The video focuses on Decker’s forecasting process,
but along the way gives important insights on how it manages its supply chain, beginning with the
design of new prototypes and ending with final shipments from its warehouse to retail stores or
online customers.
Essay or Discussion Questions Based on Video:
1. How much does the forecasting process at Deckers correspond with the “typical
forecasting process” described at the end of this chapter?
• After forecasts are made for each SKU, the next step is to “roll up” the forecasts to get
the “top down” forecast for each product category. Judgment is used to adjust forecasts
2. Based on what you see in the video, what kinds of information technology are used to
make forecasts, maintain accurate inventory records, and project future inventory levels?
• The video shows how forecasting is a prerequisite to making good “buy” decisions.
Forecast accuracy helps Deckers to coordinate with its customers (both e-commerce
• Various forecasting concepts are shown in action, as well as how forecasts support the
management of the whole supply chain. The risks of seasonal, stylish products are
3. What factors make forecasting at Deckers particularly challenging? How can forecasts be
made for seasonal, fashionable products for which there is no history file? What are the
costs of over-forecasting demand for such items? Under-forecasting?
• Seasonal, fashionable products create special challenges. Forecast errors are larger with
no history file, and inventories left over at the end of the season must be sold at heavy
discounts (or held for another year with significant inventory holding costs).
4. What are the benefits of leveling aggregate demand by having a portfolio of SKUs that
create 365-day demand?
• Forecasts are needed both at the SKU level as well as at the aggregate level.
5. Deckers plans to expand internationally, thereby increasing the volume of shoes it must
manage in the supply chain and the pattern of material flows. What implications does this
strategy have on forecasting, order quantities, logistics, and relationships with its
suppliers and customers?
• Deckers is truly a global company. Brand development teams, supply chain
management, process design, and warehousing functions are headquartered in
