Compare and contrast the supply chain management approaches take by H&M, Benetton and Zara
The purpose of this essay is to discuss different supply chain management approaches taken by H&M, Benetton and Zara. It is first necessary to explain what a supply chain management means. Supply chain management involves planning, design, maintenance and control of the flow of materials and information along the chain in order to efficiently satisfy customer's requirements (Schroeder, 2000). Such an approach, of looking at the entire supply network helps organisations identify their competitive advantages and parts of their processes that contribute the most to the performance objectives that are of the greatest importance to the customers (Slack et al., 2007). It also helps to develop long-term strategies for the company based on the identified advantages.
H&M, Benetton and Zara are all garment retailers. Key stages in their supply chains that I will discuss are product design, manufacturing, distribution and retail. Zara and H&M are so called "fast fashion" providers. Their clothes do not have to be of an exceptional quality as the most important factor is to quickly deliver catwalk design to high street customers at an affordable price (Slack et al., 2007). Benetton clothes are of better quality and higher prices but they are at the same time less fashionable and not as trendy. Despite these differences in the target markets, all three companies operate in a very similar environment and all offer innovative products with a life cycle that is very short. Therefore, they need a responsive supply chain that will respond with flexibility to the uncertainties of the environment in which the three companies operate (Fisher, 1997). These uncertainties can be avoided by decreasing lead times, increasing a chain's flexibility or allowing excessive inventories and lower capacity utilisation Fisher, 1997). The later, though, require great capital and leads to high costs. How do the companies balance these factors? In order to answer this question I will follow the
H&M, Benetton and Zara are all garment retailers. Key stages in their supply chains that I will discuss are product design, manufacturing, distribution and retail. Zara and H&M are so called "fast fashion" providers. Their clothes do not have to be of an exceptional quality as the most important factor is to quickly deliver catwalk design to high street customers at an affordable price (Slack et al., 2007). Benetton clothes are of better quality and higher prices but they are at the same time less fashionable and not as trendy. Despite these differences in the target markets, all three companies operate in a very similar environment and all offer innovative products with a life cycle that is very short. Therefore, they need a responsive supply chain that will respond with flexibility to the uncertainties of the environment in which the three companies operate (Fisher, 1997). These uncertainties can be avoided by decreasing lead times, increasing a chain's flexibility or allowing excessive inventories and lower capacity utilisation Fisher, 1997). The later, though, require great capital and leads to high costs. How do the companies balance these factors? In order to answer this question I will follow the