This assignment is a Case Study “Supplying Fast Fashion”. Working individually, analyze the “Supplying Fast Fashion” case study and present your analysis in a report limited to four pages. You may use any online sources as long as you properly reference them in your report. You may choose to prepare your report in an essay format or a list of questions and answers.
Contrast the approaches taken by H&M, Benetton and Zara in managing their supply chains. Consider the following focus points:
1. How do they differ in terms of their approach to design stage of the supply chain?
2. How do they differ in terms of the manufacturing stage of the supply chain?
3. How do they differ in terms of the distribution stage of the supply chain?
4. How do they differ in terms of the retail stage of the supply chain?
5. For each brand, Identify and explain a SCM strategy or trend utilized in its supply chain.
6. In your opinion, which of the three companies have the best SCM and why?
Supplying Fast Fashion
Garment retailing has changed. No longer is there a standard look that all retailers adhere to for a whole season. Fashion is fast, complex and furious. Different trends overlap and fashion ideas that are not even on a store’s radar screen can become “must haves” within six months. Many retail businesses with their own brands, such as H&M and Zara, sell up-to-the-minute fashionability at low prices, in stores that are clearly focused on one particular market. In the world of fast fashion, catwalk designs speed their way into high-street stores at prices anyone
can afford. The quality of the garment means that it may only last one season, but fast-fashion customers don’t want yesterday’s trends. As Newsweek puts it, “being a quicker picker-upper” is what made fashion retailers H&M and Zara successful. They thrive by practicing the new science of “fast fashion”, compressing product development cycles as much as six times. But the retail operations that customers see are only the end part of the supply chains that feeds them. And these have also changed.
At its simplest level, the fast-fashion supply chain has four stages. First, the garments are designed, after which they are manufactured. They are then distributed to the retail outlets, where they are displayed and sold in retail operations designed to reflect the businesses’ brand values. In this short case we examine two fast-fashion operations, Hennes and Mauritz (known as H&M) and Zara, together with United Colors of Benetton (UCB), a similar chain, but with a different market positioning.
Almost fifty years ago, Luciano Benetton took the world of fashion by storm by selling the bright, casual sweaters (designed by his sister) across Europe (and later the rest of the world), promoted by controversial advertising. By 2005, the Benetton Group was present in 120 countries throughout the world. Selling casual garments, mainly under its United Colors of Benetton (UCB) and its more fashion-orientated Sisley brands, it produces 110 million garments a year, over 90 per cent of them in Europe. Its retail network of over 5,000 stores produces revenue of around $2 billion. Benetton products are seen as less “high fashion” but of a higher standard of quality and durability, with higher prices, than H&M and Zara.
Established in Sweden in 1947, they now sell clothes and cosmetics in over 1000 stores in 20 countries around the world. The business concept is “fashion and quality at the best price”. With more than 40,000 employees, and revenues of around SEK 60 billion, its biggest market is Germany, followed by Sweden and the UK. H&M are seen by many as the originator of the fastfashion concept. Certainly they have years of experience at driving down the price of up-to-theminute fashions. “We ensure the best price”, they say, “by having few middlemen, buying large
volumes, having extensive experience of the clothing industry, having a great knowledge of which goods should be bought from which markets, having efficient distribution systems, and being cost-conscious at every stage.
The first store opened almost by accident in 1975 when Amancio Ortega Gaona, a women’s pyjama manufacturer, was left with a large cancelled order. The shop he opened was intended only as an outlet for cancelled orders. Now, Inditex, the holding group that includes the Zara brand, has over 1,300 stores in 39 countries with sales of over 3 billion. The Zara brand accounts for over 75 per cent of the group’s total retail sales, and is still based in northwest Spain. By 2003 it had become the world’s fastest growing volume garment retailer. The Inditex group also has several other branded chains including Pull and Bear, and Massimo Dutti. In total it employs almost 40,000 people in a business that is known for a high degree of vertical integration compared with most fast fashion companies. The company believes that it is their integration along the supply chain that allows them to respond to customer demand quickly and flexibly while keeping stock to a minimum.
All three businesses emphasize the importance of design in this market. Although not haute couture, capturing design trends is vital to success. Even the boundary between high and fast fashion is starting to blur. In 2004, H&M recruited high fashion designer Karl Lagerfeld, previously noted for his work with more exclusive brands. For H&M his designs were priced for value rather than exclusivity, “Why do I work for H&M? Because I believe in inexpensive clothes, not “cheap” clothes,” said Lagerfeld. Yet most of H&M’s products come from over a hundred designers in Stockholm who work with a team of 50 pattern designers, around 100 buyers and a number of
budget controllers. The department’s task is to find the optimum balance between the three components comprising H&M’s business concept – fashion, price and quality. Buying volumes and delivery dates are then decided.
Zara’s design functions are organized in a different way to most similar companies. Conventionally, the design input comes from three separate functions: the designers themselves, market specialists, and buyers who place orders on to suppliers. At Zara, the design stage is split into three product areas: women’s, men’s and children’s garments. In each area, designers, market specialists and buyers are co-located in design halls that also contain small workshops for trying out prototype designs. The market specialists in all three design halls are in regular contact with Zara retail stores, discussing customer reaction to new designs. In this way, the retail stores
are not the end of the whole supply chain but the beginning of the design stage of the chain. Zara’s approximately 300 designers, whose average age is 26, produce approximately 40,000 items per year, of which about 10,000 go into production.
Benetton also has around 300 designers, who not only design for all their brands, but who are also engaged in researching new materials and clothing concepts. Since 2000, the company has moved to standardize their range globally. At one time, more than 20 per cent of its ranges were customized to the specific needs of each country. Now only 5-10 per cent of garments are customized. This reduced the number of individual designs offered globally by over 30 per cent, strengthening the global brand image and reducing production costs.
Both H&M and Zara have moved away from the traditional industry practice of offering two ‘collections” a year, for spring/summer and autumn/winter. Their “seasonless cycle” involves the continual introduction of new products on a rolling basis throughout the year. This allows designers to learn from customers’ reactions to their new products and incorporate them quickly into more new products. The most extreme version of this idea is practiced by Zara. A garment will be designed; a batch manufactured and ‘pulsed’ through the supply chain. Often the design is never repeated; it may be modified and another batch produced, but there are no ‘continuing’
designs as such. Even Benetton have increased the proportion of what they call ‘flash’ collections: small collections that are put into its stores during the season… (c)
NOTE! AEssay Team of professional writers have already completed this assignment. We are ready to help You with it. Please use the coupon code AE-FB-2018-15 to get a discount if You order till the end of 2018 or contact our support to get a new one.