SUPPLYING FAST FASHION

Here is a comparison of the approaches taken by H&M, Zara and Benetton to managing their supply chains* divided inthe following strategic areas :

Design:

• H&M: The three main components are: fashion, Price and quality. 50 pattern designers, 100 buyers, Budget controllers.
• Zara: Market specialists, 3 different product areas: women’s, men’s and children’s garments. Has around 300 designers producing 40,000 items per year of which about 10,000 go into production.
• Benetton: About 300 designers researching new materials and clothing concepts.

Supplies:

• H&M: Buyers and budget controllers have to find the optimum balance between the three main components (fashion, Price and quality), and then volumes and delivery dates are decided.
• Zara: Market specialists and buyers are in regular contact with Zara retail stores, discussing customer reaction to new designs.
• Benetton: Between 5 and 10 per cent of garments are customized,

Manufacturing:

• H&M: Does not own any factories, and works with around 750 suppliers, half of its production takes place in Europe, and the rest mainly in Asia.
• Zara: They own most of the manufacturing capability used to make their products. About half of its products are produced in its 20 network factories in Spain.
• Benetton: Italian plants, and come factories in North Africa, Eastern Europe and Asia. Most of customized production is made in Eastern Europe, and the company’s central facility at Italy decides which product is going to be produce and where.

Distribution:

• H&M: The stock management is handled internally and physical distribution is subcontracted, most of the product arrives to H&M’s transit terminal at Hamburg, where merchandise is inspected and allocated to the stores.
• Zara: Automated warehouses close to main production centres, Zara is planning to open a second automated warehouse.
• Benetton: Automated warehouses close to main production centres, Benetton is planning to use Radio Frequency Identification tags to track its garments.

Retail:

• H&M: Stores average size are 1,300 square meters and are owned and run by H&M.
• Zara: Stores average size are 800 square meters, garments rarely stay in store for more than 2 weeks.
• Benetton: At one time the majority of its retail outlets were small shops run by third parties, now they have been joined by Benetton-owned and –operated larger stores.

Suppliers:

	Design	Supplies	Manufactures	Distribuition	Retail
Benetton	XXX		X	X	X
H&M	XX			X	XXX
Zara	XXX	XX	X	XX	XXX

Full Ownership	No Ownership
XXX

Oscar M. Zúrrica Braunstein.

Student ID:1427532 
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EDIT BY: B. Zhelev

To sum it all up, we could say that the structure of the supply chains the three companies have chosen, represents and reflects their main strategies and how they position themselves on the market. 

Although these brands operate in the same industry, they are targeted towards different types of clients and markets, thus they need to adjust their supply chains to the different uncertainty of demand. As it can be seen from the comparison made, Zara and H&M are relying on much more responsive supply chain models, due to the fact that it is hard to predict the trends  and fashions early on, while on the other hand Benetton have developed a more universal design of their clothes, which has far more predictable demand, and as a result are mostly focused on the efficiency of their supply chain, rather than it's responsiveness. 

Figure 1. - Strategic fit of the Supply chains.

Having all that said, it can be concluded that the high-responsiveness approach that ZARA has developed and H&M has embraced, are a direct example of a strategic fit with the companies' strategy to offer trendy and up-to-date fashion and the highly efficient system BENETTON use gives them an edge in the market for simply styled quality apparel. 

B.Z.Z.
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