Supply Fast Fashion
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Introduction
Supply chain management is becoming essential strategy companies use to deliver their products to the market. The design of each supply chain varies with the company and the industry they operate in. In the fast-fashion, for instance, a supply chain is used to fasten the speed of delivering fashions since they are short-lived. The clothing in fashion are volatile, and their demand can change within a very time. That calls for a responsive supply chain that is both efficient and swift in operations. The three cases of H&M, Benetton and Zara, will help demonstrate supply is built and used in the fast fashion industry. In that respect, we contrast their supply chains at the level of design, manufacturing, distribution and retail. The objective is to show how to develop the most suitable supply chain in the fast fashion industry.
Discussion (2pages)
Supply chain at the design stage (100 words)
Design in the supply chain is essential in ensuring the products placed in the supply chain conform to the needs of the market. That helps increase the turnover of such commodities. At the design level, H&M focuses on producing inexpensive but quality clothes. In that regard, the design function works on issues of fashion, price and quality. They are key success factors in the supply chain as they influence the demand. On the other hand, Zara fragments its design function into three main areas, which include fashions for children, men and women. They involve several parties at this stage. In particular, the Company makes use of market specialists in all stores. Their work is to inform the Company about the new designs which are trending in the market. Finally, Benetton puts more emphasis on research. The objective is to discover and identify new clothing concepts. In the process of doing that, it does work on standardization to ease the flow of their clothes to different markets.
Supply chain at the manufacturing stage (80 words)
The manufacturing stage in the supply chain helps a company produce what has been designed. Also, the point the products are manufactured affects the time taken by a company to serve an order. The three competitors differ in some specifics. Benetton has decentralized its manufacturing facilities with one main central facility in Italy. The idea of decentralizing is to cut the costs of labour and all other costs related to managing the long supply chain. In the case of H&M, they use their 21 production offices around the world to coordinate the suppliers who produce different items. They do not manufacture on their own, and therefore, their relationship with the suppliers is essential. Finally, Zara, at the manufacturing level, they own most of the manufacturing activities. That makes them the fastest, among the three in terms of lead times. Perhaps, that is because their capability entices the market response.
Distribution stage
Both Benetton and Zara have automated stores located close to the production facilities. The automation strategy enables online ordering and tracking of deliveries. Besides, Benetton is considering exploiting the Radio Frequency Identification (RFID) technology. The technology helps in monitoring and tracking the flow of goods along the supply chain. Contrary to the strategies used by the two companies, H&M subcontracts its physical distribution activities, although much of the stock management is done internally. The subcontracting strategy helps the company the responsibility of distribution to the specialists in distribution. The approach could also help cut supply chain management costs when the business is in the low season.
Retail stage
At the point of serving the consumer, the three companies employ different strategies to deliver their clothes to the customers. The retail points are the locations where the customers can purchase their items. H&M has established several stores in their markets. The average size of the stores is approximately 1,300 square meters. That makes the purchasing environment comfortable and appealing. Zara, on the other hand, produces in small batches which are displayed in their stores. They last for a very short before they finish. Finally, like the case of H&M, Benetton owns large stores with sizes ranging from 1,500 to 3,000 square meters. The stores are large enough to display a range of garments. They also enhance the customer experience.
Supply chain management (SCM) strategy for each case (100 words)
H&M uses the optimized product design as its supply SCM strategy. The strategy is more innovative. It focuses on discovering what best suits the market. The strategy starts at the design level where the Company emphasizes on fashion, quality and price. Zara, on the other hand, uses a lean strategy in supply chain management. They tend to produce what is considered ‘flash’ in the market. Their garments sell within a very short time. Finally, Benetton uses adaptive supply chain strategy. They strive to standardize their garments to each country. That is essential in reducing costs associated with managing individual designs.
Recommended strategy
The strategy used by each Company seems to suit their needs. Perhaps, that is because of the unique needs of each Company. However, the one that standards out, among the three, is the one used by Zara. The fast fashion industry is highly competitive. The garments can trend for a very short time. The strategy is the fastest, and it enables the Company to exercise a very short lead time. However, the strategy may not suit all situations. It is recommendable to develop a hybrid strategy that incorporates several attributes like quality, speed, price, and cost. That is vital in ensuring whatever strategy is used, is sustainable.
References
Mehrjoo, M. & Pasek, Z. J. (2014). Impact of Product Variety on Supply Chain in Fast Fashion Apparel Industry. Industrial and Manufacturing Systems Engineering, 17(1), 296-301.
Yang, S., Song, Y. & Tong, S. (2017). Sustainable Retailing in the Fashion Industry: A Systematic Literature Review. Sustainability, 9(1), 1-19.
Ciarniene, R. & Vienazindiene, M. (2014). Agility and Responsiveness Managing Fashion Supply Chain. Social and Behavioral Sciences, 150 (1), 1012 – 1019