Supply Chain Management in H&M
Hennes and Mauritz, which is abbreviated as H&M, is a worldwide fashion retail firm or company which is based in Sweden. It was established in the year 1947. It is a company or an organization which offers excellent and quality products at a customer-friendly price, something which makes the business to have a large number of loyal customers, not only in Sweden but also in other countries and nations around the world or globe. As a company, H&M is among the top five fashion retailer companies in the world (“H&M Supply Chain and Logistics Management Strategies”, 2019). It was in the year 2013, whereby the company H&M opened about three hundred and fifty new stores as well as expanding or opening its branches in five other countries. The countries were; Estonia, Lithuania, Serbia, Indonesia, and Chile.
H&M is one of the pioneer companies in the industry of fast-growing fashion sector or industry. The company’s fashion was greatly inspired by catwalk fashions which were then trending. The firm or company later transformed these into affordable fashion. In terms of managing its brands, the firm or company uses a combination of ZARA’s and Uniqlo’s marketing strategies.
The Key Flows in the Supply Chain Management
The product flow encompasses or entails the movement of goods and products from the supplier to the final consumer or the client. It should be noted that consumers or clients can either be external or internal. External are the ones who do not have any direct relationship with the company or organization. On the other hand, internal consumers are the one with direct associations or relationships with a particular company or organization (Krishna, 2016). They include employees or workers of the particular company. Also, product flow includes rejection or reversal. These are goods or products that consumers or customers might have bought by mistake or they bought them yet their expiry date had reached.
In a typical organizational environment, there will the existence of a consumer, retailer, wholesaler, distributor, manufacturer, and supplier. In the chain, a consumer can either from within a particular company or outside (Krishna, 2016). The movement of products through that channel for the purpose of reaching the consumer is what constitutes to the product flow.
The department of supply chain management involves a boundless deal of wide information flow. This could be information in terms the current cash flow, title of goods, commercial documents, delivery status, information about supplier as well as the distributor, information concerning customers and order, levels of inventory, pricing and descriptions, product data or information, and bills of material (Krishna, 2016). All these information are very vital and crucial not only to the department of supply of chain management but also to the entire organization or company and its wide range of customers or consumers. The company can use some of the data or information for the purpose of making crucial decisions about the company.
Cash flow refers to the situation in a company or organization, whereby it gets cash from either customer who is the final consumers or through retailers and distributors, who but the products and goods from the company or organization and then distribute them to the final consumers or customers (Krishna, 2016). This flow of cash is very essential for any company. It helps in making a particular company or organization to continue with its operation of creating goods, products or even services. Without a proper cash flow within an organization, it will be very hard for it to continue with its operation, something which can even make it be closed down for good.
Return flow refers to the amount of money or capital which is accrued from a particular sale of a company’s product or service, in relative to the amount which was invested in the creation of the particular goods, products, or services (Krishna, 2016). The amount of the return flow minus the amount of capital; invested for the creation of the product, service, or goods is what makes a company know if a profit or loss has been incurred. If the amount is positive, that implies that the company has gained a profit. If the amount is negative it implies that the particular company or organization has experienced a loss. Under normal circumstances, many of the organizations or companies always strive to have profit accrued from their endeavors.
The Make Process
H&M production plan/Plan of Production
As the supplier chain manager of the H&M Company or firm, I can authoritatively elucidate that my organization does not own any factories for the production of raw materials. However, as a company, we acquire our raw materials from more than eight hundred suppliers who are located mainly in Asia and Europe (“Production”, 2018). At our production offices, we deal with all practical production aspects, something which keeps us as a company or organization in constant contact with our main suppliers, who are located mainly in Asia and Europe. The constant communication with the suppliers is very healthy because it ensures that at any time our company has required raw material for its production purposes.
Aggregate Production Plan/ Master Production Schedule/Material Requirement Plan
The aggregate production plan of our company, H&M, is to produce enough products so that it can be able to cater for the large numbers of customers or final consumers it enjoys from various corners of the world. It is always our rule as a company or firm that we are allowed to produce more goods or products than the quantity required by the consumers or customers (“Production”, 2018). However, that amount should not be much greater. In other words, the surplus amount should be negligible. This is because eventually the products or goods will have to be purchased.
The company’s production schedule is that in the event it is started, there should not be anything which can pose as a hindrance to the process of production. That way a high level of goods or product will be realized, something which is very essential for the whole company (“Production”, 2018). Such products of high quality pose high chances of being loved by the final consumer or customers just at a glance by seeing them.
The firm’s requirement plan is that enough material should be gathered after being supplied for the purpose of preparing for the production process. That is a very good way of starting the process, rather than to begin when the materials are not enough. From there henceforth the process begins without any disturbance.
H&M Bill for Materials
As it is now well known that my company, H&M, where I work as a senior supply chain manager, we do not have any factories which aide or help us in the production of raw materials. On the other hand, we import raw materials from Asian and European nations (“Production”, 2018). The aspect of buying and making sure that the raw materials reach out to the company is entirely in my docket as a supply manager. It usually entails a simple step through the use of the latest ICT and technologies. I do not have to travel physically to those nations to purchase raw materials. All I have to do is to purchase the raw materials online through their companies’ sites. Also, I make payment through online platforms, something which is very efficient and effective.
Quantity to be produced
As a company, we have realized that we have humongous customers from different parts of the world. Moreover, it has come to our realization that our fashion product is in great demand, not only in Sweden but from the entire parts of the world. Hence, as a company, it is our duty to make sure that our customers or final consumers are satisfied. Hence, I can say that per day the company or organization should produce about 10,000 pieces, produce 70,000 pieces on weekly basis, produce 300,000 pieces on monthly basis as well as 3,650,000 pieces on yearly or annually basis. That pieces will be a quite sufficient amount to cater for the large market base the company has all over the world.
As a senior supply chain manager, who has been at this position for quite a long time, I can authoritatively suggest that the best strategy is the one which takes into consideration the demand factor. The production of the products or goods should be in line with the level of demand at that particular time. The higher the demand, the higher the level of production. Also, if the demand keeps on going higher, also the level of production should also be aiming more higher. This will be very high.
The Supply Chain Focus
Quantitative or Quantity better for H&M
For a company or firm like H&M whose market base increases every day, quantity is what better fits its bill. This implies that the company should make more efforts to producing more of its products or services. In other words, it just has to increase its level of production. In the event that it does not do so, it risks having made its loyal customers or consumers disappointed. If consumers get disappointed, the particular company or firm might later get a huge shock of having its customers leaving it for other companies doing the same business. In the event that it makes a quantity to be enough for the diehard customers and the new one, the particular customers will increase their loyalty, something which is of great importance to the firm.
Recommend Qualitative or Quantity Forecasting for H&M
As a supplier chain manager, I have realized for quite a long time that people always tend to be attracted by something of greater quality. People no longer purchase of buy products just for the sake of satisfying their various needs or wants, but they also do so for the purpose of having or owning something of greater quality. Hence, if my company put much concentration on quality it will attract more customers on board, something which is very healthy for the business.
In conclusion, I can authoritatively say that in as much as a company does not have factories for the production of goods or products, it is still in a position of competing with others in the particular venture it has put its focus on. For instance, a company like H&M, where I work as a senior supply chain manager, has no factories for coming up or production of raw materials. However, as a company, we only import raw materials from Asian and European countries. From there henceforth we use the imported raw materials for the creation of fashion products. The good thing is that the company enjoys a very huge market from both within the country, Sweden, as well as from the other parts of the world.
H&M Supply Chain and Logistics Management Strategies. (2019). Retrieved 22 July 2019, from https://www.ukessays.com/essays/business/hm-supply-chain-logistics-management-6182.php
Krishna, B. (2016). The Five Major Flows in Supply Chain. Retrieved 22 July 2019, from https://brandalyzer.blog/2016/03/23/the-five-major-flows-in-supply-chain/
Production. (2018). Retrieved 22 July 2019, from https://career.hm.com/content/hmcareer/en_se/workingathm/what-can-you-do-here/corporate/production.html
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