Supply chain - H&M Group (2024)

FAQs

What is H&M supply chain strategy? ›

Not having any factories of its own, it utilises over 700 partner companies in more than 20 countries, relying on a network of external suppliers to manage its buying and production. H&M purchases garments from around 750 suppliers, with 60% of production taking place in Asia and the remainder mainly in Europe.

H & M is very much dedicated to make profits by reducing costs and increasing demand for it products by providing customers what they want. So therefore H & M uses both the lean and agile strategy to manage its supply chain management.

A factory is where the product is made. The H&M group collaborates with over 700 independent suppliers who usually own their own factories.

David Sävman is the Head of Supply Chain at H&M Group. David joined H&M in 2006 as a Senior Merchandiser.

Types. The main four types of supply chain strategies are client-centric, predictive business, visibility and smart automation.

We work with suppliers to move beyond compliance and towards continuously improving environmental and social performance. We have the most influence where our relationships are strongest. That's why we focus on building long-term partnerships with suppliers who share our vision for a more sustainable industry.

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.

Here Bullwhip Effect refers to a phenomenon where disparity of demand expands dramatically since every order has to go through every level of company's supply chain.

H&M competitors include Arcadia Group, Abercrombie & Fitch Company, Uniqlo and Avenue Stores. H&M ranks 1st in Overall Culture Score on Comparably vs its competitors.

What is supply chain in simple words? ›

A supply chain is the network of all the individuals, organizations, resources, activities and technology involved in the creation and sale of a product. A supply chain encompasses everything from the delivery of source materials from the supplier to the manufacturer through to its eventual delivery to the end user.

Therefore a comparison is made between two of the largest globally active retail groups, namely H&M group and Inditex. H&M does not own any production facilities and therefore operates, using a fully vertically disintegrated supply chain. Meaning they outsource the production of all their clothing produced.

5 essential qualities in a supply chain manager

math skills combined with strong analytical and statistical capabilities to understand supply and demand issues. ability to use data to track orders and shipments, sales trends, demand and any weaknesses and inefficiencies.

A supply chain is the network of individuals, companies, resources, activities, and technologies used to make and sell a product or service. A supply chain starts with the delivery of raw materials from a supplier to a manufacturer and ends with the delivery of the finished product or service to the end consumer.

The Top-level of this model has five different processes which are also known as components of Supply Chain Management – Plan, Source, Make, Deliver and Return.

A good supply chain strategy is about fulfilling demand, driving customer value, improving responsiveness, facilitating financial success and building a good network. The primary goals of efficient supply chain management should be faster delivery, higher efficiency and accelerated cash flow.

Supply management is made up of five areas: supply planning, production planning, inventory planning, capacity planning, and distribution planning. Supply planning determines how best to fulfill the requirements created from the demand plan.

Examples of supply chain activities include farming, refining, design, manufacturing, packaging, and transportation.

What is a strong supply chain? ›

A strong supply chain is one that is sustainable and understands the impact of its actions and the strength of the supplier-customer relationship is key in this endeavour.

While H&M does make good promises and sustainability commitments for the future which include using recycled and sustainability-produced materials only by year 2030, the fast fashion business model per se isn't sustainable in itself as it supports the “buy-and-throwaway” consumer mentality and still produces waste.

Having a sustainable supply chain can also help with supply chain resilience in vulnerable times. When workers are suffering from the negative effects of environmental degradation, this in turn affects the availability, ability and resilience of the workforces that our supply chains depend on.

H&M uses green hangtags to identify and market its “Conscious Choice” products, a labelling tactic that suggests garments are either sustainable or more sustainable than other products, despite being manufactured mostly from polyester or recycled plastics, which the plaintiffs claim is a misrepresentation of products ...

We have identified four major causes of the bull-whip effect: Demand forecast updating. Order batching. Price fluctuation.

The bullwhip effect is caused by demand forecast updating, order batching, price fluctuation, and rationing and gaming. Demand forecast updating is done individually by all members of a supply chain. Each member updates its own demand forecast based on orders received from its “downstream” customer.

Real-world examples of the bullwhip effect

As panic-buying resulted in supply shortages, stores were scrambling to increase their orders and keep their shelves stocked. Further up in the supply chain, manufacturers were also increasing production to meet this excessive spike in demand.

China: main clothing supplier

As seen in the present graph, China, Bangladesh and Turkey are top three locations where H&M sources its products. This is also true for. In Sweden, where the retailer is headquartered, there are a total of 21 suppliers and factories manufacturing H&M's clothing products and accessories.

Who is bigger Zara or H&M? ›

Swedish fashion retailer Hennes & Mauritz (H&M) has overtaken its main rival Zara to become India's largest clothing brand by revenues in FY19-20, helped by.

H&M has become one of the leading fast fashion companies using its supply chain and techonology as core competitive advantages. H&M's business model consists of creating value for customers by offering fashion and quality at the best price.

A supply chain strategy is the overarching plan that an organization uses to manage the flow of goods and services, from sourcing raw materials to delivering products to customers.

An example of a supply chain in the food industry includes farming, manufacturing, packaging and transporting food products. By managing the supply chain effectively, companies reduce production costs, avoid shortages of raw materials and deliver products to customers timely.

Why Is Supply Chain Management Important? Modern supply chains help improve living standards by enabling consumers to buy essential products at lower costs. This is because an effective supply chain streamlines the process of getting products to market, and ultimately to consumers.

How much do supply chain managers make? According to the US Bureau of Labor Statistics, the median annual salary for logisticians is $77,030 [1]. On the lower end, logisticians earned less than $45,160 while the higher end earned over $122,390 [1].

The average Supply Chain Manager salary in the United States is $120,639 as of January 26, 2023, but the range typically falls between $105,992 and $137,474.

In short, supply chain professionals have faced huge amounts of stress over the past two years. Not as much as healthcare workers or other front-line workers, but considerable pressure nonetheless—especially compared to some other white collar functions that have less accountability for disruptions.

What personality type is supply chain? ›

As supply chain managers, ISTJ personality types get to use their skills to figure out the complicated logistics of a company's supply chain. Their detail-oriented approach ensures all data is tracked efficiently, while their critical-thinking skills help them propose solutions for distribution challenges.

Supply Chain includes purchasing, manufacturing, warehousing, transportation, customer service, demand planning, supply planning and Supply Chain management.

A supply chain strategy is the overarching plan that an organization uses to manage the flow of goods and services, from sourcing raw materials to delivering products to customers.

Weaknesses. Outsourcing: H&M is immensely dependent on outsourcing. Hence, this is one of its primary drawbacks. Instead of producing their goods in-house, they have more than 900 suppliers in Asia and Europe.

The Secret to H&M's Success: Fast Fashion

Aimed at young, fashion-conscious urban consumers, their products are trendy and they're cheap, bordering on disposable. Fast fashion retailers make their profits by having a high merchandise turnover and by constantly resupplying the product pipeline with the latest trends.

The Top-level of this model has five different processes which are also known as components of Supply Chain Management – Plan, Source, Make, Deliver and Return.

Colgate-Palmolive, which provides household and consumer products to millions of households around the world, has demonstrated agility, resilience, and commitment to supply chain sustainability.