Task1: Supply Fast Fashion
The fashion industry has been changing at a very fast rate. For example, in the past, most cloths used to be customized while currently only between 5-10 percent are customized. In light of this, businesses in the fashion industry must remain a breast with the changes in this market and also be competitive. In this regard, businesses in this industry must be creative in order for them to remain competitive in this market.
In order to remain competitive, businesses in the fashion industry have continuously adopted innovative technologies, designs, and manufacturing processes in order to remain competitive. On the same breath, they have also streamlined their distribution channels in order to ensure that customers can easily access their products. Similarly, enterprises in the fashion industry have modernized their retail stores by making them more attractive and welcoming to customers.
In terms of designs, the businesses in the fashion industry have reduced the number of cloths that are customized from 20% to between 5 and 10%. Accordingly, businesses now prefer to make cloths for mass consumption. Similarly, there has been a trend of reducing the seasonality in the introduction of fashionable cloths. In the past, fashion used to be based on the two major climatic changes; summer and spring. Currently, there has been a change in this trend. Major cloths manufacturing companies such as H&M and Zara are now continuously introducing new fashionable cloths throughout the year. In addition, these companies do not repeat past fashion designs, rather, they improve on these designs or introduce totally new designs (Choi, 2014).
Concerning manufacturing, the cost of this process determines the ideal location for these activity. For example, H&M has its suppliers from all over Europe and Asia who enable the company to access many raw materials needed in the fashion industry at a low price. In addition, companies in the manufacturing industry consider the lead time needed to complete an ordered batch. For high volume fashion cloths, the companies require a long lead time. However, companies such as Zara, which supplies a significant proportion of it materials enables it to be competitive by reducing its lead time.
Companies in the fashion industry also have an elaborate distribution channel. For example, Zara and Benottin have an automated warehouse system. H&M on its part has a sophisticate stock management which it uses to control its inventory levels and provides insight on the items that the company should purchase (Choi, 2014). Finally, most fashion business have uniquely designed their retail stores in a manner that they are spacious and attractive. This large spaces enables shoppers to easily trace the items that they are looking for and to be comfortable while shopping.
The quick adaption of modern designs and the failure to repeat outdated designs. Generally, the fashion industry is mainly marked with introduction of stylish designs regularly. In this regard, the constant introduction of new cloths by H&M and Zara enables these two companies to stay ahead of competition. This factor is also supported by the fact that unlike competitors who mainly introduce new cloths twice an year. The continual production and sale of the company’s items will enable them to increase their market share and dominance in the industry.
Task 2: 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.