Columbia Sportswear 2001 Annual Report Download - page 10

enhancement systems which include signage and Ñxtures that prominently display consolidated groupings of
Columbia merchandise oÅer similar beneÑts.
Inventory Management
From the time of initial order through production, distribution and delivery, we manage our inventory in
an eÅort to reduce risk. Our inventory management systems coupled with our enterprise-wide information
system have enhanced our ability to manage our inventories by providing detailed inventory status from the
time of initial factory order through shipment to our retail customers.
Additionally, through the use of incentive discounts we encourage early purchases by our customers to
promote eÅective inventory management. We provide our customers with staggered delivery times through the
spring and fall seasons, which also permits us and our customers to manage inventories eÅectively and thereby
diminish the likelihood of closeout sales. Through our eÅorts to match our purchases of inventory to the
receipt of customer orders, we believe we are able to reduce the risk of overcommitting to inventory purchases.
This helps us avoid signiÑcant unplanned inventory build-ups and minimizes working capital requirements.
This strategy, however, does not eliminate inventory risk entirely as we build a nominal amount of speculative
inventory into our business model. Additionally, customer orders are subject to cancellation prior to shipment.
Product Design
Our experienced in-house merchandising and design teams work closely with internal sales and
production teams as well as with retailers and consumers to produce products which are designed primarily for
functionality and durability.
We also engineer technical garments with special performance features. Our outerwear features include
Columbia's Interchange System», Radial Venting System
TM
, Radial Sleeve
TM
, Stretch Panels, the perform-
ance storm hood, and packable and reversible options. The GRT» line oÅers the Radial Leg Gusset
TM
, GRT
Venting
TM
, Convertible Sleeve Tab, and convertible and packable garments. In Footwear we have features
such as Quadensity» and our Hunting and Fishing garments have such features as the Columbia Comfort
System
TM
, the PFG Venting System
TM
, and our Quarpel Thread Technology
TM
.
We distinguish ourselves by designing clothing that performs well in a wide range of weather conditions
and for a variety of outdoor activities. To accomplish this we carefully choose the appropriate fabric or
insulation for each garment. Those selected obtain optimum performance characteristics such as waterproof-
ness, breathability, weight, durability, and wicking ability. For our outerwear collections we feature our
premier waterproof/breathable Omni-Tech» technology. Three diÅerent levels are oÅered to meet diÅerent
needs of waterproofness, breathability, and protection. In our GRT line we feature Omni-Dry» which is our
high-performance moisture-management technology which renders superior results in a variety of conditions.
Our footwear line features Omni-Grip» traction technology which is a specially formulated sticky rubber
compound to allow superior traction as well as stability on wet and dry surfaces.
We feel that these technical innovations and product features provide versatility, comfort and value to our
consumers.
Sourcing and Manufacturing
Our apparel and footwear products are produced by independent manufacturers selected, monitored and
coordinated by regional Columbia employees to assure conformity to strict quality standards. We believe the
use of these independent manufacturers increases production capacity and Öexibility and reduces our costs.
Unlike many apparel companies, we use few independent agents in our sourcing activities. We maintain
15 sourcing and quality control oÇces in the Far East, each staÅed by Columbia employees and managed by
personnel native to the region. Personnel in these oÇces direct sourcing activities, help to ensure quality
control and assist with the monitoring and coordination of overseas shipments. Final pricing for all orders,
however, is approved by personnel from our U.S. headquarters. We believe Columbia personnel in the Far
East, who are focused narrowly on our interests, are more responsive to our needs than independent agents
4