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Case Study: Supplying Fast Fashion

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by

John Carrillo

on 2 November 2015

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Transcript of Case Study: Supplying Fast Fashion

Case Study:
Supplying Fast
Fashion

benetton
Design
Manufacturing
Distribution
Retail
Presented by: John Carrllo, Robert Chan, & Jonn Mendoza
established in Sweden in 1947
1000+ stores over 20 countries
40,000+ employees
originator of the fast fashion concept
Ensure the best price by...
few middlemen
large volumes
extensive experience
efficient distribution
opened in 1975 by accident
1300+ stores over 39 countries
over 75% of sales accounted to Zara
Fastest growing volume garment retailer by 2003
Supply chain integration allows fast and flexible response to customer demands while keeping stock at minimum
Benetton
300 in-house designers who research material and concepts
Has moved to standardize their range
Has increased proportion of ‘flash’ collections
Benetton
Increased production outside Italy (North Africa, Easter Europe, Asia)
Each location operates in a similar manner through a single, central Benetton-owned operation
Controlling share in its main supplier of raw materials
Dyes clothes AFTER assembly rather than use dyed thread or fabric
Luciano Benetton, 1965
Sister’s casual sweater design
Started across Europe then went on to being global
110 million garments, >90% produced in Europe
less high fashion but higher quality and durability, higher prices
Benetton
Invested in highly automated warehouses
Benetton
Retail outlets used to be small shops run by third parties, but are now joined together into large, Benetton-owned and -operated stores
"The best supply chains aren't just fast and cost-effective. They are also agile and adaptable, and they ensure that all their companies' interests stay aligned."

- Hau L. Lee, US Professor of Operations, Information and Technology in Harvard Business Review, Oct. 2004
H&M
Capturing design trends is vital to success
Business concept: fashion, price, and, quality
"Why do I work for H&M? Because I believe in inexpensive clothes, not 'cheap' clothes."
- Karl Lagerfeld
Zara
3 functions: designers, market specialists, buyers
3 product areas: women's, men's, children's
300 designers averaging 26 years old
H&M
works with 750 suppliers
21 production offices
Lead time: 3 weeks to 6 months
Zara
fastest lead time ("catwalk to rack")
20 spanish factories focusing on cutting and dyeing operations
Buys 40% fabric owned
Works on a single shift system to retain volume flexibility
H&M
stock management handled internally
Flow of goods rounted via transit terminal in Hamburg
"Call-off warehouse"
Zara
automated warehouse close to main production centres
launched a 2nd automated warehouse in 2001
H&M
"to create a comfortable and inspiring atmosphere in the store that makes it simple for customers to find what they want and to feel at home."
Zara
averaging 800 sq meters in size
garment rarely stays longer than 2 weeks
Full transcript