Operation Management of Fast Fashion

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This case is relatively strategic in the context of the chapter that supports it. Chapter 3 in the text examines what might be termed the more ‘strategic’ aspects of supply network design. Chapter 13 (this chapter) treats some of the more operational issues. Yet, the boundary between what is strategic and what is operational in supply network/chain management is somewhat arbitrary. And although this case does not examine the very operational issues of how each of these companies' supply chains operates, it does provide a starting point for a debate on what, in practice, the operational issues would be. The virtue of the case is that all three companies are relatively well known. How well known they are to a postgraduate class will depend on the make-up of the class. Although the stores do not deal exclusively in women’s garments, it is more likely that women will have heard of the stores and be aware of the differences between them. Also, the older the class, the less likely they are to be interested in fashion. So, some explanation may be necessary. This is not difficult. Press adverts can be used, catalogue images can be shown and so on. The one problem with using companies like these is that some class members may have their own individual views on the companies’ products (I hate the stuff Benetton sells, etc.). This can be destructive and inhibit discussion. It is important to be very clear with the class that their personal preferences should not cloud the issues involved here. The fact that all three companies have been (more or less) successful over a number of years is testament to the fact that somebody is buying their products.

Notes on questions
In fact, there is only one question attached to this case in the text. This does not mean that the class debrief of the case needs to be centred only around this one question. Nevertheless, given the nature of the information in the case, it does lend itself to a very broad ‘compare and contrast’ mode of analysis. If required, the case debrief can be broken down into smaller segments such as the following. 

How would you class the three companies in terms of the markets they serve? 
How do they differ in terms of their approach to design stage of the supply chain? 
How do they differ in terms of the manufacturing stage of the supply chain? 
How do they differ in terms of the distribution stage of the supply chain? 
How do they differ in terms of the retail stage of the supply chain? 
How would you summarize the general differences between the companies in terms of  their approach to supply chain management?
Here, we will address these questions in this order.
The markets occupied by these companies (or rather, brands) could be analyzed in several ways. But this is not a marketing case, and all that is necessary here is to establish (approximately) the similarities and differences between the three brands. A diagram similar to the one below is useful for doing this. The next illustration shows approximately the degree of ownership that each company has at each stage in the supply chain. In this diagram, the manufacturing stage, as it is called in the case, is divided into two parts: the supply of parts and the manufacture of the garment. This is not strictly necessary, but can be used to prompt a debate about exactly what the company has chosen to own. There is, after all, a difference between how much of the finished garment to manufacture and assemble, and how many of the components that go into the finished product do they want to supply internally. Design

Notable here is that all three companies do the majority of their own design. In fact, Benetton and Zara do virtually all of their own design in-house, while H&M is using ‘guest designers’, but mainly to exploit the reputation of these designers. It is worth debating with the students why, of all the stages in the supply chain, it is design that these companies are the most reluctant to outsource....
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