Supply Chain Practices of H&m

Supply chain practices of H&M

1. A)

There are four elements in supply chain: Sourcing and procurement this procedure gathering, researching and evaluating suppliers of good and services. Second implementing, planning and adjusting the effective, well-organized flow and storing of goods, services from supplier to producer that comes in Logistic management and it has Order processing, Inventory, Transportation, Warehousing etc. Third Channel partners they do dealing with a producer for to sell their products, goods or services in market and last one Third party logistic it provides multiple logistic services for use by customers.

B)

As per the case study the H&M Company were a great success because of the three precious key elements design, production and distribution. Here they have shown conceptual management which formed in better growth and success.

H&M’s elements design include sourcing as they have building a team that will come out with best products which will fulfil customers need and future demand. For example, they have planned over 100 in house designer 50 pattern designer and 100 buyers to finalize the designs concentrated as fashion, quality and price. Channel partner H&M is doing collaborations with the renowned designers like Karl Lagerfeld, Stella McCartney, Viktor and Roberto cavalla to implement their design, behind these plan is to take effective out come from the designers Because each year they come out with two main collection for that each collections they involve all designers, buyers and channel partners, pattern designers and supplier because partnership are usually done through a co- branding relationship Each of H&M’ concept like Men, Women, kids and denim has its own team designer, buyers, pattern makers, assistants and controllers to produce the garments according to demand of retailers and customers.

Furthermore, H&M stores their inventory in Warehouse in different countries as per the demand of their fashionable cloths production and they have 22 production offices different countries the all buyers are in contact with production and the offices do order processing by identify new suppliers, negotiate price with good quality and minimise the transport time by the using flexi rail or air that comes in logistic management. The production offices engage with suppliers and buyers to gather all the information’s which is required for designer garments and list the suppliers who can supply the samples in 24 hours as specified by H&Ms source and procurement. Moreover, each new order of buyers differ by location Production that depend upon availability of garments & supplier of raw materials, transportation. H&M have 10 production offices in Europe& far-east few in America& Africa but for fashionable cloths they depend upon the all 700 suppliers and producer like there is a demand for any specific garments in particular country than H&M manage by their international channel partners.

However for the distribution of finished items they have set up distributors and retailers in all the countries in which H&M operated and that set up provided multiple logistic transportation, information, warehousing and needed capital. H&M organise large order shipments by 3PL- freight forwarders from Asian countries to minimise the cost of demanded garments for a particular country forwarder act only when H&M dispatch shipments via ships, aeroplanes and train and with a Logistic management they can restocked their stores everyday by doing advance ordering and checking the availability all the physical resources and needed transportation.

C)

The Bullwhip effect happens when the needs differs in the supply chain are increased as they moving-up in the supply chain. Inaccurate information-data from one end of supply chain to the next can prompt huge inefficiencies. Organizations can successfully check the bullwhip impact by understanding all its hidden causes.

To understanding the causes helps management to design and develop tactics to counter it. Indeed many businesses have started to execute innovative projects that partially address the effect. Next conceivable remedies on the underlying smaller purchase order that has a greater cost than discount achieved from making a bulk order. Supply chain manger can reduce misleading signals of the distribution by Point of data collection. By maintain consistent price can avoid invariably leads to enlarged variations for the supply chain to overcome the bullwhip effect and with an information sharing improve forecasting and communication along the supply chain. With Sharing of information demand information at a down-stream site is transferred to up-stream in a suitable manner. Channel arrangement is the synchronisation