Reflection Report: Supply Fast Fashion
The case study is highly insightful on the various strategies adopted by the major firms in the fashion industry namely, H&M, Benetton, and Zara. The common aspect among the three fashion retailers is that produce their major designs in-house. According to the class notes and discussions, one advantage to using this strategy is that the end products communicate a brand that is unique to the company. Additionally, the design stage of the supply chain is the most critical for firms in creative industry and hence the reluctance of these firms to outsource (Sehgal, 2009). In the high end fashion industry, the aesthetic and unique value of the product, an output of the design phase, is the most critical factor in the brand image.
Supply chain theory holds that one of the fundamental aspects of an effective supply chain is speed. It is critical that raw materials are delivered to the processing plant; the processing is done within the least amount of time, and the distribution process efficiently done to ensure that the commodities reach the client on time. Fashion firms such as Benetton and Zara deal in seasonal products and must therefore ensure the products are availed to the customer at the right time. For instance, winter clothing is supposed to reach the market as soon as the winter season commences and the same for summer clothing. Flexibility is another important factor in the supply chain. Companies in the fashion industry need to show great flexibility in their product designs in that they should be both fast and responsive to the dynamic market needs for them to remain both relevant and competitive.
In terms of distribution, none of the major firms directly performs the distribution of their products. These companies normally contract professional distributors able of transporting their products to the various global markets. However, the firms have invested in warehousing, which is a critical aspect in the supply chain. Warehousing for the fashion companies does not necessarily entail maintaining large storage spaces but performing the decisive operations of sorting the products. The firms therefore ensure that the goods do not stay for long at the warehouses by quickly splitting the batches and sorting them for delivery in the various stores that they are needed. Warehousing is therefore considered an extension of the factory and therefore a critical phase of the supply chain.
In terms of retail, the three firms have employed different strategies. Benetton has opted to set up its own retail stores while Zara and H&M have opted to have their apparel sold by specific retailers. The main advantage to setting up stores is that it provides the firm with overall control. However, such an approach is highly capital intensive. However, the use of franchising and private retailers to sell the goods enables a company to expand with minimal costs on its capital (Choi, 2014).
Therefore, in reflection, it is clear that the theoretical concepts identified in the class notes and group discussions are practically employed by corporate organizations. Benetton, Zara and H&M have practically employed the theoretical concepts of supply chain management to effectively ensure quality products are availed to their customers within the specified time and thereby achieving customer satisfaction. The firms have implemented the concept of outsourcing whereby they delegate some of their non-core functions in the supply chain to other professional firms and thereby left to concentrate on their most critical function. All processes within the supply chain are therefore executed with high levels of professionalism and consequently achieving high levels of customer satisfaction.
Choi, T.-M. (2014). Fashion retail supply chain management: A systems optimization approach. Boca Raton [u.a.: CRC Pr.
Sehgal, V. (2009). Enterprise supply chain management: Integrating best-in-class processes. Hoboken, N.J: Wiley.