Preview

Global Sourcing Benefits and Challenges for H&M

Powerful Essays
Open Document
Open Document
4702 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Global Sourcing Benefits and Challenges for H&M
MO358 Strategic Supply Chain Management

Global Sourcing-
Benefits and challenges for H&M

Northumbria University, UK

Abstract
Global sourcing is a technique of strategic sourcing in the global strategy, which is an effective approach as a part of organization’s procurement section. The objective of global sourcing is to develop global efficiencies in the delivery of a product or service for the firms achieving a sustainable competitive advantage and this is an important weapon have been focused in the 21st Century. The well-known organization, Hennes and Mauritz (H&M) is one of the largest international fashion retail and production house with the great deal of businesses all over the world. In the today’s competitive market and ever-changing environment, what distinguishes an organization that succeeds from others? The article is to explore and focus on the benefits, challenges and requirements of global sourcing for H&M by the means of a literature study, case interview and discussion with the fashion merchandising manager.
TABLE OF CONTENTS Page
|CHAPTER 1 INTRODUCTION | |
|INTRODUCTION.…………………………………………………… |4 |
| | |
|CHAPTER 2 BENEFITS | |
|COST REDUCTIONS………………………………………………… |5 |
|BETTER QUALITY………………………………………………….. |6 |
|AVAILABILITY………………………………………………………. |7 |
|


References: Jinsook Cho and Jikyeong Kang (2000), “Benefits and challenges of global sourcing: perceptiomns of US apparel retail firms, “International Marketing Review” pp544, Laura M.Birou and Stanley E R. M. Monczka and R. J. Trent (1991), “Global sourcing: a development approach”, International Journal of Purchasing and Materials Management, pp.2-7. Laura M.Birou and Stanley E. Fawcett (1993), “International Purchasing Benefits, Requirements, and Challenges”, “National association of Purchasing, Inc” pp36 See J.C H&M Annual Report 2007. Retrieved November 10, 2008, from http://www.hm.com 7.2Invitation Letter
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Good Essays

    Target’s Internal and External Factors
    • 1334 Words
    • 6 Pages

    Target’s Internal and External Factors

    Globalization is a leading concept and has become an internal and external factor in in business life during the past decade (Kati, 2011). It leads to increased competition and can be related to product and service costs that benefit both customer and business. Although Target stores have not expanded outside of the United States they do import products from all over the world. Since Target’s mission is to offer their customers high quality at low prices they must do extensive planning and organizing in order to meet the customers’ expectations. As part of planning Target decides what products they want to import and uses Target Sourcing Services, it is a global sourcing organization locates merchandise from around the world for Target and helps import the merchandise to the United States. They have quality control offices all over the world. Target Sourcing Services employs 1,200 people. Its engineers are responsible for evaluating the factories that do business with Target Corporation for quality, as well as labor rights and transshipment issues (Global Logistics, 2013).…

    • 1334 Words
    • 6 Pages
    Good Essays
    Read More
  • Best Essays

    Resource Based View and Porter’s Five Forces Analysis on Unilever
    • 3034 Words
    • 13 Pages

    Resource Based View and Porter’s Five Forces Analysis on Unilever

    22. Zeng, A. Z, 2000, “A synthetic study of sourcing strategies”, Industrial Management & Data System, vol. 100, no. 5, pp219-226…

    • 3034 Words
    • 13 Pages
    Best Essays
    Read More
  • Powerful Essays

    global sourcing
    • 1946 Words
    • 8 Pages

    global sourcing

    Global sourcing factors that must be understood and balanced can be segmented into 5 categories. First factor is material cost. The bottom line of execution of global sourcing is reduce cost by minimizing material cost. Another category is transportation cost. Various costs including inventory delivery cost can be dwindled through global sourcing. Moreover, significant amount of transportation expense can be reduced when marketing products at outsourcing regions. Cross-border taxes, tariffs, and duty costs are third factor which form global sourcing. Instead of relying on domestic production but rather outsource each process internationally, costs can be reduce by avoiding trade barriers which include cross-border tax, tariff and duty cost. Next factor is supply and operational performance. With effective resource…

    • 1946 Words
    • 8 Pages
    Powerful Essays
    Read More
  • Better Essays

    Explain Why Companies Use Competitive Bidding and Explain the Advantage of Using It.
    • 984 Words
    • 4 Pages

    Explain Why Companies Use Competitive Bidding and Explain the Advantage of Using It.

    [2]Handfield / Monczka / Giunipero / Patterson, 2009, “Sourcing and Supply Chain Management” 4th Edition, South-Western.…

    • 984 Words
    • 4 Pages
    Better Essays
    Read More
  • Powerful Essays

    Strategic Sourcing
    • 3663 Words
    • 15 Pages

    Strategic Sourcing

    Executive Summary. Global sourcing executives face more challenges than ever, and the global sourcing environment will only grow more complex. The firms that survive the next century will do so because they make key investments in building the next generation of strategic sourcing capabilities. Strategic Sourcing 2.0 is about automating networks and analysis that is more rigorous. Global sourcing executives can increase their effectiveness by automating many aspects of the sourcing lifecycle and by relying on a core group of analysts who focus on creating the information reporting and analysis necessary for “enterprise awareness.” Presented below are the lifecycle and capabilities for automating and analysis. Source Discovery – Web crawling and crowdsourcing provide affordable, tailored information to constantly update the picture of risks, supplier status, new entrants and competitive intelligence. Source Evaluation – Multi‐cultural expert networks and a supplier evaluation methodology can improve the likelihood of successful supplier relationships. Source Network Management – Multi‐enterprise sourcing networks, a deliberate sensor network, and a command center can provide near real‐time insight on all aspects of the sourcing network; hosted auction services can provide dynamic pricing for source acquisitions and asset disposal. Sourcing Analytics – Near real‐time insight into subordinate sourcing organizations and programs can only be achieved with a custom reporting capability. In general, a data mart may also be required to store, manipulate and manage the information necessary for sourcing analytics. Sourcing Resilience – The capabilities and information to manage multiple issues like the acceptable levels of redundancy in the network, acceptable security, insight into business, network and supplier risks, rapid insight…

    • 3663 Words
    • 15 Pages
    Powerful Essays
    Read More
  • Good Essays

    H&M Opportunities and Threats
    • 775 Words
    • 4 Pages

    H&M Opportunities and Threats

    H&M contributes to numerous causes that make them a socially conscious company. The clothing producing business has become very environmentally conscious and most importantly, price conscious. H&M has committed to having a corporate responsibility to social and economic issues, which was the cause of them creating a meticulous sustainability policy. Sustainability describes practices and policies that reduce environmental pollution and do not exploit people or natural resources in meeting the lifestyles needs of the present without compromising the future (Kadolph). H&M holds their suppliers to the same standards that they have established as a corporation. H&M conducts audits that not only check for working conditions and child labor, but also focuses on water treatment, chemical handling, and waste management. H&M has created a list of chemicals that would not be tolerated in the factories and before the factory can begin manufacturing H&M products, they must sign the Chemical Restrictions Compliance Commitment to confirm their compliance with the restricted chemicals list. H&M began using organic cotton in 2004, incorporating it in 5% of baby and children garments and now have lines made up of 100% organic cotton. (H&M Website) The farmers that supply organic cotton to H&M also has a restricted chemical list that they must adhere to, just like the factories. This is an aspect of H&M that they have a substantial advantage over other companies with their commitment and expansion to organic cotton line. They have increased the use of organic cotton by 50% each year since 2004 and goaled to reach 15,000 tonnes, or 16,530 tons, used for their clothing by 2013. H&M participates in numerous organizations that request clothiers abide to more environmentally safe practices, like the Fur Free Alliance. H&M is also one of 73 companies that have signed the United Nations Water Mandate, which stresses the correct…

    • 775 Words
    • 4 Pages
    Good Essays
    Read More
  • Powerful Essays

    A Comparative Study of Asia Strategy: Wal-Mart Versus Carrefour
    • 3853 Words
    • 16 Pages

    A Comparative Study of Asia Strategy: Wal-Mart Versus Carrefour

    Wal-Mart, the number one retailer in the world, persistently maintain three fundamental beliefs—respect everyone, total-solution service, and in search of highest quality—to shape their unique corporate culture. They insist lowest price every day, carry out total solution services, effectively control the cost of global logistics, fully leverage information technology to become e-company, powerfully motivate employees to work and share knowledge and adopt a play-safe strategy in internationalization. As for the number two player—Carrefour, they provide customers with one-stop shopping, lowest price, fresh products, self-served shopping in a hypermarket with free parking lots. In contrast to Wal-Mart’s internationalization strategy, Carrefour expands to foreign markets faster and more flexible than their counterpart. This study investigates the configuration in Asia, marketing service, product procurement, logistics management, digitalization and human resource management of Wal-Mart and Carrefour. The authors then propose strategic implications for global retailers to increase their management effectiveness and efficiency.…

    • 3853 Words
    • 16 Pages
    Powerful Essays
    Read More
  • Good Essays

    Strategies in an Era of Global Competition
    • 9501 Words
    • 39 Pages

    Strategies in an Era of Global Competition

    References: Abernathy, F., Dunlop, J., Hammond, J. and Weil, D. (1999), A Stitch in Time: Lean Retailing and the Transformation of Manufacturing ± Lessons from the Apparel and Textile Industries, Oxford University Press, New York, NY. (The) Age, (1997), ``Tariff cuts threat prompts Berlei closure ' ', The Age, 14 August. Anderson, K. and Garnaut, R. (1987), Australian Protectionism: Extent, Causes and Effects, Allen and Unwin, Sydney. Australian Manufacturing Council, (1990), ``The global challenge: Australian manufacturing in the 1990 's ' ', Final Report of the Study by Pappas Carter Evans Koop/Telesis, July. Baines, T., Whitney, D. and Fine, C. (1999), ``Manufacturing technology sourcing practices in the USA ' ', International Journal of Production Research, Vol. 37 No. 4, pp. 939-56. Berry, W., Hill, T. and Klompmaker, J. (1999), ``Aligning marketing and manufacturing strategies with the market ' ', International Journal of Production Research, Vol. 37 No. 16, pp. 3599618. Bita, N. (1997), ``Out of fashion ' ', The Australian, 2 July. Bromby, R. (1990), ``Local clothing industry is falling apart at the seams ' ', The Australian, 18 October. Bryce, D. and Useem, M. (1998), ``The impact of corporate outsourcing on company value ' ', European Management Journal, Vol. 16 No. 6, pp. 635-43. Buxey, G. and Kosmider, R. (1997), ``Strategies for survival following tariff reform ' ', Industrial Management and Data Systems, Vol. 97 No. 6, pp. 214-21. Canel, C. and Khumawala, B. (1997), ``Multi-period international facilities location: an algorithm and application ' ', International Journal of Production Research, Vol. 35 No. 7, pp. 1891-910.…

    • 9501 Words
    • 39 Pages
    Good Essays
    Read More
  • Powerful Essays

    International Sourcing in an Apparel Industry
    • 1313 Words
    • 6 Pages

    International Sourcing in an Apparel Industry

    The textile and apparel industry is undergoing structural changes to sustain itself in a dynamic environment. Till few years back, companies were focusing on organic growth to increase sales but in the face of increased competition, companies have now started to focus on growth through mergers and acquisitions. Inorganic…

    • 1313 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Good Essays

    Global Sourcing
    • 554 Words
    • 3 Pages

    Global Sourcing

    One of the major supply chain developments of recent years has been the expansion in the proportion of products and (occasionally) services which businesses are willing to source from outside their home country; this is called global sourcing. It is the process of identifying, evaluating, negotiating and configuring supply across multiple geographies. Traditionally, even companies that exported their goods and services all over the world still sourced the majority of their supplies locally. This has changed companies are now increasingly willing to look further afield for their supplies, and for very good reasons. Most companies report a 10 percent to 35 percent cost savings by sourcing from low-cost-country suppliers. There are a number of other factors promoting global sourcing:…

    • 554 Words
    • 3 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    culture study for fashion
    • 413 Words
    • 2 Pages

    culture study for fashion

    The clothing retail industry has been and is undergoing significant changes resulting from processes of globalisation, changes in consumer demand as well as changing corporate activities in terms of strategic marketing decisions. The UK clothing retail industry has experienced significant growth, which has focused attention on studies in the field with this sector being considered as the one of the most competitive markets in Europe. This is primarily as a result of the concentrated power of larger retailers such as Marks & Spencer. One prime issue as a result of globalisation is that there are more and more retailers sourcing globally aiming to provide competitive prices and quality products in the market. Marks & Spencer as such then is challenged by this trend particularly from rival discount and supermarket competitors.…

    • 413 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Better Essays

    SCM 371 Final Study Guide
    • 2917 Words
    • 12 Pages

    SCM 371 Final Study Guide

     Levels in the evolution towards global sourcing: Asked purchasing agents where they are now with global sourcing and then where they see themselves in the future.…

    • 2917 Words
    • 12 Pages
    Better Essays
    Read More
  • Good Essays

    If a company is considering switching production to a country where wage costs are lower, to what other factors will it need to take into account before doing so?
    • 650 Words
    • 3 Pages

    If a company is considering switching production to a country where wage costs are lower, to what other factors will it need to take into account before doing so?

    References: Cho, J. & Kang, J. (2000). Benefits and challenges of Global sourcing: perceptions of U.Sapparel retail firms. International Marketing Review, Vol. 18, No. 5, pp.…

    • 650 Words
    • 3 Pages
    Good Essays
    Read More
  • Powerful Essays

    Perceived Impact of Outsourcing on Organizational Efficiency
    • 5391 Words
    • 22 Pages

    Perceived Impact of Outsourcing on Organizational Efficiency

    Kotabe, M., J. Murray, and R. Javalagi. 1998. Global sourcing of service and market performance: Au empirical investigation. Journal of International Marketing 6(4): 10-13.…

    • 5391 Words
    • 22 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Factors to Consider When Buying from Abroad
    • 6024 Words
    • 25 Pages

    Factors to Consider When Buying from Abroad

    2”An important part of the work of a buyer, whether the buyer is operating in the domestic market or international, is ‘sourcing’. In many developing economies, where buying firms are just beginning to explore the international market, the major difficulty is to locate potential suppliers in the global market. Fortunately the advent of global network is of information regarding not only the suppliers, but also, also almost any detail required regarding their products is accessible to buyers in most countries.”…

    • 6024 Words
    • 25 Pages
    Powerful Essays
    Read More

Related Topics