H&M comprises six different brands, although the H&M brand is the most recogniza
ID: 433938 • Letter: H
Question
H&M comprises six different brands, although the H&M brand is the most recognizable worldwide. The other brands are COS, Monki, Weekday, Cheap Monday, and & Other Stories. H&M designs sustainable fashion for all people at relatively modest prices and sells its products in 54 countries and online in an additional 10 markets. COS explores the concept of style over fashion and sells its products in stores and online in 38 countries. Monki is promoted as a fashion experience and is offered in 30 markets in stores and online. Weekday is a jeans-focused fashion destination with sales in 25 markets. Cheap Monday combines “influences from street fashion and subculture with a catwalk vibe” and is offered in some 20 markets. The last brand, called “& Other Stories,” was launched in 2013 and focuses on personal expression and styling, with availability in 17 markets. The collection of these brands, driven by the H&M collection and its footprint in 64 countries, presents a unique global supply chain challenge for the company.
The collections of clothing are created by a team of 160 in-house designers and 100 pattern makers. The design and pattern team is large and diverse, representing different age groups and nationalities. H&M's design process is about “striking the right balance between fashion, quality and the best price . . . and it always involves sustainability awareness.” H&M does not own its own factories, but instead works with around 900 independent suppliers to implement the team’s designs into reality. These independent suppliers are mostly located in Europe and Asia. They manufacture all of H&M’s products, and they also generally source fabrics and other components needed to create the fashion statements we have come to know from the H&M brands. Some 80 people in the H&M organization are dedicated to constantly audit the working conditions at the factories of suppliers, including safety and quality testing and ensuring that chemicals requirements are met.
Within the global supply chain infrastructure, one key aspect of H&M is the ordering of each product. Specifically, ordering each product at the optimal moment is an important part of H&M achieving the right balance among price, cycle time, and quality. To realize the effectiveness needed to ultimately sell fashion-oriented clothing at affordable prices, H&M works closely with long-term partners and invests significant resources into the sustainability of the work needed in its supply chains. In these areas, the company strives to promote lasting improvements in working conditions and environmental impact throughout the footprint that it makes worldwide. Through its 900 suppliers, H&M is connected to some 1,900 factories and about 1.6 million workers. * answer the following questions:
1. Does it surprise you that the second-largest clothing retailer is selling in stores in only 54 countries plus an additional 10 countries online? Why do you think it is not covering more of the world’s countries?
2. H&M does not own any of the factories that produce its clothes. Instead, it relies on some 1,900 factories and 900 suppliers to create what its team designed. These factories and suppliers are mostly in Europe and Asia. How can H&M ensure that its customers receive the quality expected in the clothing?
3. H&M stresses sustainability in its promotional campaigns. How can it ensure that the working conditions are appropriate for the 1.6 million people that serve in its supplier network? Is it even H&M’s role to ensure that the working conditions and environmental impact are great in every market it engages in?
4. If you worked for H&M, what would you suggest that it focus on to become even larger than it is now? Should it have its own factories? Should it expand to more than the 64 countries (54 with stores and 10 online) that it is in now? Should it control more of the global supply chains?
Explanation / Answer
1. No it is not surprising that the second -largest clothing retailer is selling in stores in only 54 countries and 10 additional countries online. It is able to achieve high volumes through the current operations. It is not covering more of the world's countries because its focus is on fashion, quality and value. Its current operations are vast and to manage them effectively lot of focus is required. Since it is achieving considerable growth through the current outlets, expansion is not a priority.
2. H&M can ensure that its customers receive the quality expected in the clothing manufactured at various suppliers factories across Europe and Asia by having a dedicated team of 80 employees who visit various factories. They conduct audits and testing to check the quality standards.
3. It can ensure working conditions are appropriate for the large number of people that serve in its supplier network by partnering along with suppliers and investing its resources for better working conditions and improved work practices. It works closely with the suppliers to help them effective process for timely delivery and quality of products.
It is H&M's role to ensure the working conditions and environmental impact as it needs to ascertain the quality standards for its products. As H&M works closely with the suppliers, it builds long term partnerships to ensure the sustainability of efforts, resources and various practices developed for the management of its operations worldwide.
4.If I worked for H&M the focus on becoming even larger should depend on the profitability and needs of those markets where it is not present. I would suggest that it focusses on building a vertically integrated supply chain. It may continue to work with the existing suppliers worldwide. In addition to the current supply chain network, it can have its own manufacturing facilities in each of the areas which can act as a model for other suppliers and center of coordination in areas of operation in different regions. Need of control of global supply chains depends on its current needs and any gaps the organization is facing.
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