Created by Chathura Ravilal Hapuarachchi

Zara

Benetton

SUPPLY CHAIN MANAGEMENT

Supply chain management involves planning, design, maintenance and control of the flow of materials and information along the chain in order to efficiently satisfy customers requirements (Schroeder, 2000).�

Benetton

Zara

INTRODUCTION

• Established in 1975• It has stores in 39 countries• Annual sales over $3 billion• Biggest market is north –west Spain• In 2003 it has become the world’s fastest growing volume

garment retailer• It’s total employment is 40000

Zara

INTRODUCTION

• Hennes and Mauritz.• Establish in Sweden in 1947• Selling cloths and cosmetics• It has 1000 stores and 20 countries• Business concept is ‘fashion and quality at the best price’• More than 40000 employees and revenues of around 60000

million• Biggest market is Germany• Originator of the fast fashion concept

INTRODUCTION

• UCB• Group was present 120 countries• Selling casual garment• Produce 110 million garments per year• Its has 5000 stores and produce revenue of around $2 billion• Products are less ‘high fashion’• Biggest market is Europe• Higher quality and durability with higher price than H&M and

Zara

Benetton

SUPPLY CHAIN MANAGEMENT

Supply chain management involves planning, design, maintenance and control of the flow of materials and information along the chain in order to efficiently satisfy customers requirements (Schroeder, 2000).�

Benetton

Zara

DESIGNING

# Women garments# Men garments

# Children garments

Zara retail stores

customer reaction to new designs

Zara

DESIGNING

• Their designers are not only design for all the company’s brands but also are engaged in researching new materials and clothing concepts

• Since 2000 the company has moved to standardize its range globally

• 20% of its ranges were customized to the specific needs of each country and now only 5-10 percents of garments are customized

• This reduced the number of individual designs offered globally by over 30 percent, strengthening the global brand image and reducing production costs.

Benetton

DESIGNING

50 pattern designers

Around 100 buyers

100 designers in Stockholm

A number of budget

controllersDepartment Task

find the optimum balance between the 3 components of H&M business

concepts- Fashion, price and quality

Buying volumes and delivery dates are decided

MANUFACTURING

• Zara has the fastest lead time in the industry• Catwalk to rack time in as a little of 15 days • About half of Zara productions are produced in its networks of

20 Spanish factories. • Zara buys around 40% of its fabrics from its own wholly –

owned subsidiary, most of which is in undyed for dyeing after assembly.

• Most of their sub- contractors work on a single shift system to retain some volume flexibility

Zara

MANUFACTURING

Non-

Italian

Plants

Estan Europe

North AfricaAsia

Central Facility of the Benetton

Allocates production to each of the Non-Italian networks, deciding what and how much is it to produce.

Benetton

MANUFACTURING Cont…

• Benetton has a controlling share in its main suppliers of raw materials, to ensure fast supply to its factories

• Benetton is also known for the practice of dying garments after assembly rather than using dying threads or fabrics

• This postpone decision about colours until late in the supply process so that there is a grater chance of producing what is needed by the market

MANUFACTURING

750 suppliers

21 production

office

• The actual dyeing and cutting of the garments can then be decided at a later stage in the production

• The later an order can be placed on suppliers, the less the risk of buying the wrong thing

• Sub contractors are used for most labour intensive operations like sewing

DISTRIBUTION

• Bothe zara and Benetton have invested in highly automated warehouse, close to their main production centers that store, pack and assemble individual orders for their retail networks.

Zara

Benetton

DISTRIBUTION

• It stock management primarily handed internally, physical distribution is subcontracted.

• A large part of the production of the flow of goods is routed from production side to the retail country.

• Then the goods are inspected and allocated to the stores or to the centralized store stock room. It call as ‘Call-off warehouse’

RETAIL

• Average Size 800 m2

• Zara produce comfortable stores for their customers• The most important characteristic of Zara stores is that

garment rarely stay in the store for longer than 2 weeks• Because product designs are not repeated• The range of garment displayed in the store can change

radically every 2 or 3 weeks• This encourages customers both to avoid delaying a purchase

and to revisit the store frequently

Zara

RETAIL

• It has larger stores like 1500-3000m2 mega – stores that can display the whole range of Benetton products and reinforce the Benetton shopping experience.

Benetton

RETAIL

• Average Size 1300 m2

• Aim of their stores is ‘create a comfortable and inspiring atmosphere in the store that make it simple for customers to find what they want and to feel at home’

SUPPLY CHAIN MANAGEMENT

• World Class Manufactures• Minimizing the watefull costs associated with the ‘Value

Chain’• Introducing the Advance Manufacturing Technologies (AMTs),

towards maximizing efficiencies, in all related functions of the “Value Chain”, to ensure startegic cost reduction and improvement of lead time

• Proving the customer with the a high quality product, more superior to what was expected

• Distribution Recourse Planning (DRP)• JIT concept• Continuing good inventory management system

THANK YOU