1.0 INTRODUCTION In today’s business world, the fashion industry is one of the fastest growing and competitive markets. The volatile market along with the customer demands have made garment companies such as H&M, Zara and Benetton seek to improve their supply chain management processes to succeed. Improving supply chain processes is many times difficult since customers are very fashion conscious and hence garment companies must constantly update designs as ways of meeting the customers’ expectations. The purpose of this paper is to analyse the operations and different supply chain management processes undergone by Zara, H&M and Benetton over the last few years. Supply chain management is defined as ‘the management of relationships and flows between operations and processes’ (Slack 2012, p. 212). The structure of this case study is divided into four key stages; design, manufacturing, distribution and retail. The paper will also focus on the four V’s which are …show more content…
At ZARA and Benetton, the supply chain strategies are automated and well organized thereby making the supply chain not only effective by also reliable. While H&M has subcontractors, and supplies within its strategies. ZARA focuses on specialized garments and hence designed are often not repeated. Hence the garments have only a rack life of 15 days. All three retail stores have similar operations strategies which all have pros and cons. Of the three stores, ZARA has the most effective strategy as its success is the garments are sold within 15 days and that ZARA has the highest number of stores. Vertical integration also plays and important aspect to ZARA success as places utmost importance on the designing phase and hence creates unique designs with short lead times at affordable prices. Additionally, by having manufacturing sites located globally, it allows diversity in the clothing
The Classic Journal, vol. 82, no. 4, May 1987, pp. 310-313. JSTOR, http://www.jstor.org/stable/3298000. Virgil.
This analysis will be devoted to exploring some important aspects that one feels have received less attention", (Sødtholt, D.
Due to their huge success, control over suppliers can be always be maintained by the company. Rivalry among the competitors is the force to reckon with and it is the one that will decide the future profitability of the fashion industry. Competition in fashion is very high since there are only a handful of competitors when looking at the giants. Future Industry evolution Scenario 1 The future of today’s world is technology.
One of the possible solutions to the above issues is to continue with the Product Lifecycle Initiative, but with a refined scope. As proposed, Patagonia might repair any garments regardless of their brands. Such services may benefit its competitors at the expense of Patagonia’s profits as it will incur extra cost to boost repairing capacity. Therefore, Patagonia may consider to provide such services to other brands only when they agree to pay a price for it. Also, outsourcing the repair services to reliable and high quality provider can keep their repair cost at a low level.
The Value Chain 4 4. Operations Strategy Implications (Store level) 5 5. Inventory Management and Demand Forecasting 9 6. Supply Chain Management 9 7. Quality Management 11 8.
Q. 2. Recent development in Technology has enabled huge global organizations to avail information easily in their premises for smooth functioning of various departments within an organization. Much of a company's success comes down to its Supply Chain Management and logistics. The development of Information Systems in SCM helps in cost reductions, customer satisfaction and productivity.
Zara is vertically integrated and takes care of designing, manufacturing and distributing its products. This gives it an immense hold on the market as most of the operational inefficiencies are eliminated by the company’s on employees who identify with the larger goal and value proposition of the brand (The New York Times, 2012). Zara works along with the consumers to understand them more closely rather than imposing its own predictions on them. Zara creates an environment of artificial scarcity in its stores for every design it manufactures so that consumers get a feel of exclusivity rather than stock pile up (Johnson, 2012). This gives them a sense of pride to buy a limited edition of products which they find at Zara stores only.
These characteristics, a complicated supply chain and wide availability of data make the industry a suitable avenue for an efficient supply chain. Also the fashion industry has been in a transition during the last 20 years: significant consolidation in retail, with most of the apparel manufacturing operations moving overseas and, in more recent times, increasing use of e-commerce in retail and wholesale trade. Historically, retailers have tried to exploit relationships with suppliers. Bargaining power of buyers is moderate because of the size and concentration of major retailers. To reduce power and you gain customers, retailers seek to differentiate products and to create stronger brands.
In terms of differentiation, ZARA’s “fast fashion” philosophy is unique, which create demands and lead the trend in the garment market. They respond very quickly to the demands of target customers and focus on young fashion. In production, they design quickly, production quickly and update quickly.
Where in the domestic market, its main competitors in terms of volume stores are the same Iniditex group, Pull & Bear and Stradivarius. Although Sfera and Mango can also be considered great rivals. Moreover, in the European market, Zara 's main competitors, GAP and H & M. Mango and Sfera and they were in the domestic market, they cease to be European. Rivalry between competitors The number of competitors is high (and are distributed locally, nationally and internationally) The textile sector has a slow growth (because it is a mature sector)
(BARNAT, "Concurrent Control") As fashion trends tend to change every now and then, Zara could use this control to work on latest trends and future trends. This to ensure that employee work activities produce the correct results without any major wastage and unacceptable services. This also allows Zara to be up to date with its fashion knowledge and also sustain its position in the
On the other hand the fact that Zara produces the remaining 40% internally, is a strong asset, providing better control, and short lead-times. Finally the fact that Zara owns 450 workshops were garments are to be sewed is a major asset ensuring quality. Another important asset in terms of production, is the technologies involved, for instance the cutting machines, to minimize waste (Ferdows & co. 2014 p9), used in combination with the last-final hand-made sewing. The ease of the connection between the production center and the distribution center is also an important time-saver element, and therefore
Executive summary This report depicts the various stages of IKEA’s supply chain flow, providing an elaboration of processes that take place at each stage. It also shows the dependency of the stages and how information flows through the supply chain. After illustrating the supply chain flow process of IKEA, the report then moves on to analyze the company’s global supply chain strategies.
Value chain Furthermore, the Zara‘s global value chain varies from its competitors and it is totally matchless for the reason that their lead time is just about two weeks that is quite encouraging for them to compete with their competitors viably. With the help of effective value chain, it helps them to create new and innovative designs in just two weeks (Finney, et al.,