Zara, H&M and Benneton Supply Chain Management

1. Created by ChathuraRavilalHapuarachchiBenettonZara
2. SUPPLY CHAIN MANAGEMENTSupply 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).ZaraBenetton 3. INTRODUCTIONEstablished in 1975It has stores in 39 countriesAnnual sales over $3 billionBiggest market is north –west SpainIn 2003 it has become the world’s fastest growing volume garment retailerIt’s total employment is 40000Zara 4. INTRODUCTIONHennes and Mauritz.Establish in Sweden in 1947Selling cloths and cosmeticsIt has 1000 stores and 20 countriesBusiness concept is ‘fashion and quality at the best price’More than 40000 employees and revenues of around 60000 millionBiggest market is GermanyOriginator of the fast fashion concept 5. INTRODUCTIONUCBGroup was present 120 countriesSelling casual garmentProduce 110 million garments per yearIts has 5000 stores and produce revenue of around $2 billionProducts are less ‘high fashion’Biggest market is EuropeHigher quality and durability with higher price than H&M and ZaraBenetton 6. SUPPLY CHAIN MANAGEMENTSupply 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).ZaraBenetton 7. DESIGNINGZara

8. DESIGNINGBenettonTheir designers are not only design for all the company’s brands but also are engaged in researching new materials and clothing conceptsSince 2000 the company has moved to standardize its range globally 20% of its ranges were customized to the specific needs of each country and now only 5-10 percents of garments are customizedThis reduced the number of individual designs offered globally by over 30 percent, strengthening the global brand image and reducing production costs. 9. DESIGNINGfind the optimum balance between the 3 components of H&M business concepts- Fashion, price and qualityDepartmentTaskBuying volumes and delivery dates are decided 10. MANUFACTURINGZaraZara has the fastest lead time in the industryCatwalk to rack time in as a little of 15 days About half of Zara productions are produced in its networks of 20 Spanish factories. Zara buys around 40% of its fabrics from its own wholly – owned subsidiary, most of which is in undyed for dyeing after assembly.Most of their sub- contractors work on a single shift system to retain some volume flexibility

11. MANUFACTURINGBenettonAllocates production to each of the Non-Italian networks, deciding what and how much is it to produce. 12. MANUFACTURING Cont…Benetton has a controlling share in its main suppliers of raw materials, to ensure fast supply to its factoriesBenetton is also known for the practice of dying garments after assembly rather than using dying threads or fabricsThis postpone decision about colours until late in the supply process so that there is a grater chance of producing what is needed by the market 13. MANUFACTURING750 suppliersThe actual dyeing and cutting of the garments can then be decided at a later stage in the production The later an order can be placed on suppliers, the less the risk of buying the wrong thingSub contractors are used for most labour intensive operations like sewing21 production office 14. DISTRIBUTIONZaraBothe zara and Benetton have invested in highly automated warehouse, close to their main production centers that store, pack and assemble individual orders for their retail networks.Benetton 15. DISTRIBUTIONIt stock management primarily handed internally, physical distribution is subcontracted. A large part of the production of the flow of goods is routed from production side to the retail country.

Then the goods are inspected and allocated to the stores or to the centralized store stock room. It call as ‘Call-off warehouse’ 16. RETAILZaraAverage Size 800 m2Zara produce comfortable stores for their customersThe most important characteristic of Zara stores is that garment rarely stay in the store for longer than 2 weeksBecause product designs are not repeatedThe range of garment displayed in the store can change radically every 2 or 3 weeksThis encourages customers both to avoid delaying a purchase and to revisit the store frequently 17. RETAILIt has larger stores like 1500-3000m2 mega – stores that can display the whole range of Benetton products and reinforce the Benetton shopping experience.Benetton

18. RETAILAverage Size 1300 m2Aim of their stores is ‘create a comfortable and inspiring atmosphere in the store that make it simple for customers to find what they want and to feel at home’ 19. SUPPLY CHAIN MANAGEMENTWorld Class ManufacturesMinimizing the watefull costs associated with the ‘Value Chain’Introducing the Advance Manufacturing Technologies (AMTs), towards maximizing efficiencies, in all related functions of the “Value Chain”, to ensure startegic cost reduction and improvement of lead timeProving the customer with the a high quality product, more superior to what was expectedDistribution Recourse Planning (DRP)JIT conceptContinuing good inventory management system 20. THANK YOU