Fashion Supply Chain Case

H&M business concept | Source: about.hm.com

Thanks for your thoughtful comparisons of the H&M and Zara supply chains this week . Many of you made the point that these two supply chains have similarities, but also some important differences. See Kristen, Andrew, Mario, Michael, and Micah's posts for excellent comparisons of the two supply chains using the SCOR model. 

A central concept in supply chain design is effectiveness. How do we determine and design the most effective supply chain for our business? The answer to this question goes back to our company's overall strategy. Do we want an efficient supply chain, a responsive supply chain, or some combination of both? (See Collier & Evans, 2015, chapter 9, for a full discussion of the differences between these choices.)

H&M identifies their core business concept is "fashion and quality at the best price". Fashion certainly implies some level of supply chain responsiveness, but H&M spends significant time and energy outlining the efficiency aspects of their supply chain design as well. H&M ensures best price by designing in-house, purchasing in large volumes, efficient logistics, and overall cost consciousness (H&M, 2015). Zara, as Mario points out in his post, has a different focus. Zara clearly comes down on the responsiveness side of the design discussion with their focus on fast fashion. Your posts this week and earlier in the month detail how Zara delivers on their fast fashion commitment.

Sustainability is an important third measure of supply chain effectiveness. Andrew and Jacob point out H&M's efforts in this area. Resource efficient transportation is an important part of the H&M sustainability mix, as are reverse logistics: taking back used clothing for fabric re-purposing or fiber recycling. Note that the most resource efficient transportation methods are also the slowest. This is not necessarily a problem for supply chains that are strictly designed for efficiency, but can be problematic for supply chains designed to be responsive. It will also be a challenge for supply chain design that seeks to balance both efficiency and responsiveness. 

So, which supply chain design is most effective? The answer is the supply chain that best supports the company's strategy and facilitates delivery of the their customer benefit package. Be sure to consider these issues of efficient, responsiveness, sustainability and alignment with company strategy as you conduct the supply chain analysis in your case studies.

Enjoy the weekend. Stay warm. We'll continue our supply chain discussion in class on Monday. See you then!

References

Collier, D.A. & Evans, J.R. (2015). OM5. Boston: Cengage Learning.

H&M (2015). About H&M: Our business concept. Retrieved from http://about.hm.com/en/About/facts-about-hm/about-hm/business-concept.html.