H&M Invests in Supply Chain as Fashion Rivalry Intensifies - Case Study - Management Assignment Help

Assignment Task

Case: - H&M invests in supply chain as fashion rivalry intensifies

STOCKHOLM (Reuters) - Cost controls helped H&M HMb.ST to limit a drop in quarterly pretax profit but the fashion chain said it was increasing investments this year as it tries to keep pace with its larger rival, Zara owner Inditex ITX.MC.
H&M, the world’s second-biggest fashion company, said conditions remained very tough in key European markets and in the United States, with shopping behavior and expectations changing rapidly.
Earnings were dented by weaker than expected sales growth and bigger mark-downs and H&M shares fell 5 percent.
After years of hectic expansion across the world, the Swedish companys profitability has faltered as Inditex, Fast Retailings 9983.T Uniqlo and online specialists such as ASOS ASOS.L gain an edge in fast fashion. By turning over more new styles each year and having production closer to customers, they can quickly boost supplies of best-selling items.
H&M’s supply chain lead times are around double those of Inditex, according to a report this month by Goldman Sachs, which recommended that investors “sell” H&M shares.
H&M Chief Executive Karl-Johan Persson conceded that the company’s supply chain practices had remained the same while the world had changed. H&M would “definitely” move some production closer to end-markets while keeping an eye on profitability.

Tasks:
1. What do you think are the complexities and challenges associated with supply chains of Fast fashion Industry? Discuss in detail.

2. “H&M need to make sure they’re innovating ahead of the curve, not just to catch up”. What are the major supply chain and operations overhauls that H&M is working on? Share your opinion on its effectiveness and justify using relevant reasoning.

3. Compare Zara and H&M’s supply chain capabilities. Which do you think is superior in meeting market requirements and is more sustainable? Justify your answer with suitable reasoning.

4. How has Covid-19 impacted the fashion industry and its Supply Chain? Produce a detailed discussion on how businesses can prepare themselves to minimize the impact of future supply chain disruptions.

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