EFIMM0074 Global Supply Chain Management

Your summative assessment for this unit is a written individual essay based on the case study.

Summary

The Okepas case explores the challenges faced by a sustainable sneaker startup as it confronts a sudden and dramatic increase in US tariffs on Chinese-manufactured goods in April 2025. Okepas, founded by industry veterans, built its business model around mass customisation, sustainability, and a lean, China-based supply chain. The company's innovative approach enabled rapid, on- demand personalisation and minimal inventory, but left it highly exposed to geopolitical risks. When tariffs on footwear imports soared to 145%, Okepas’ cost structure became unsustainable, threatening its survival in its largest market. The case highlights the complexities of global supply chains, the risks of political and economic shocks, and the strategic decisions required to build resilience and ensure long-term viability in a volatile international business environment. As a secondary focus, the case demonstrates how the company positioned itself as a category-defining brand by offering personalised products at competitive prices while minimising environmental impact. Set in an operations scenario involving production, sourcing, and distribution, this case explores how a small start-up tackles challenges related to mass customisation, sustainable components, and new production technologies. In addition to these challenges, it also has to rethink its entire operations strategy due to rising tariffs on parts produced outside the US.

Your task is to answer the following four questions:

1.   Given the tariff escalation in April 2025, what short- and long-term risks does Okepas face in continuing to rely on a China-centered supply chain?

2.   Could partial relocation of production (e.g., manufacturing the white base shoes in China and completing customization in Italy or the US for the European and US markets, respectively) offer a viable form of operational postponement? What are the trade-offs in terms of lead time, cost, and control?

3.   What capabilities and supply chain structures would be required for Okepas to build a resilient, future-proof operating model?

4.   What strategic options should Stefano Ferniani, CEO at Okepas, consider to mitigate tariff exposure while maintaining Okepas’ made-to-order, premium customization model?