Topics: Supply chain management, Inventory, Management Pages: 5 (1647 words) Published: September 9, 2013
Executive summary
H&M has more than 2000 stores in approximately 40 countries. The management philosophies of H&M are ‘Fashion and a quality at the best price and rapid expansion’. The powerful supply chain management is an important factor for its success. It has designed an efficient supply chain in Asia and quick response supply chain in Europe to control production. The sales are increased through IT systems, which control these two supply chains stably with fashion design. H&M is regarded as a typical ‘McFashion business’, which is popular by fashion design, good quality and low price in the worldwide. Internal designers undertake its design, and the entire production process is outsourced, mostly to Asia. Meanwhile, H&M is not only an importer but also a wholesaler and a retailer. Recently, H&M and Inditex (parent company of ZARA) have become top two biggest retailers in the world.

H&M is known for fast-fashion clothing offerings for women, men, teenagers and children, and with Zara, both are successful clothes brands that combine perfectly lower price with fashion design. Zara’s goodwill has widely been achieved by its fast supply chain, and H&M is successful by means a unique two-supply chain management. The prices of H&M’s clothes are lower than major brands, but the benefits are higher. When the economy was down, most clothes companies struggled, but H&M saw opportunities to expand its retail stores worldwide. During 2011, H&M has opened approximately 260 new stores. One-day turnover of a Shanghai store has been over two hundred thousands pounds. To dominate the market fast, H&M created slightly higher prices, modern fashion, and city style brands – Collection of Style (COS). COS adopts seasonal design cycle, it is different from H&M’s two to three week design cycle, and COS cloths are more elegant than H&M. Furthermore, H&M has claimed that it will announce a new top brand –‘&Other Stories’, the products of this brand are planned to have better fashion design, better quality, and still at a good price. The first retail store of ‘&Other Stories’ will be opened in Europe in 2013. The objectives of OM

Operations management (OM) is an essential function to businesses, ‘which is the set of activities that create value in the form of services and goods by transforming inputs and outputs. Activities creating goods and services take place in all organizations.’ (Heizer & Render, 2010) ‘An operation may be defined as the process of changing input into output thereby adding value to some entity. Right quality, right quantity, right time and right price are the four basic requirements of the customers and as such they determine the extent of customer satisfaction. And if these can be provided at a minimum cost, then the value of goods produced or services rendered increases.’ Thus the objectives of OM are, ‘to produce goods and services of the right quality, in the right quantities, according to the time schedule and a minimum cost.’ (http://www.mbaknol.com/operations-management/operations-management-and-its-objectives/)

Hence, the objectives can be summarized into six approaches: Effectiveness objective – Choosing and producing right goods and services that are required by customers. Efficiency objective – Using minimal input resource to produce maximal outputs by chosen and produced goods and services. Quality objective – Ensuring the goods and services quality is uniform as pre-set quality and satisfying customers’ needs. Lead-time objective – Through reducing delays and waiting time to minimize throughput time. Capacity utilization objective – Efficient use of machines, space, and personal. Cost objective – Minimizing costs of the whole production process of goods or services.

Key elements of OM
Selection and design of goods and services: The goods and services chosen is a crucial point for business. A right good or service is different as competitors, understanding customers’...
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