H&M Supply Chain Strategy - Successful Retail Inventory Control (2024)
Indeed, the production rate of H&M's retail inventory is elevated by its heavy dependence on outsourcing from design to production. Although H&M’s core operation relies on its designers, creative directors, and pattern makers to stay on top of the latest trends, it also uses the services of fashion trend forecast companies such asWorth Global Styles Network (WGSN). As a fast-moving retailer, it takes on an innovative direction in determining consumer interests through both traditional analysis and experimental augmented-reality technologies.
With customer-driven reports of future trends in hand, H&M creates collections that strike a good balance between latest trends and the basics. Street fashion, haute couture, trends from the '50s and clean lines from the '60s are examples of a few recent avenues of inspiration for the H&M team as well. "We get inspiration from everywhere, but the most important thing is to make it your own way," says Van den Bosch. However, while the brand is international in its persona, it certainly holds the Scandinavian trait of being democratic and practical.
And democratic it is in terms of price tags. With H&M's range of baby-doll dresses, printed silk blouses with fashionable leggings, and drainpipe jeans available at uniform, egalitarian prices. What's behind the brand's economical prices? That's where its manufacturing game plan comes in.
H&M, the second largest retailer of apparel industry are constantly striving to strengthen their supply chain performance in the market with its technological integration through initiation of artificial intelligence, RFID, Automated Warehouses, blockchain technology to enrich their customer experience.
The significance of inventory management in the demand-supply chain provides updated and direct sales forecasting information, which assists the sales and marketing group in planning for future inventory needs.
H&M says that it has a $4 billion unsold inventory challenge. The company was having plans to open up 220 new stores and expanding its eCommerce operations and hence it produced the clothes to fill up the racks. However, what the company failed to see was to study the on-going fashion and near future fashion.
What is an inventory strategy? An inventory strategy refers to having processes and systems in place to manage the flow of products throughout the supply chain chain, from manufacturing and procurement to warehousing and shipping.
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