Global supply chains clothing and fast fashion

Fast fashion chains such as Hennes & Mauritz (H&M), Zara and Benetton are examples that have left indelible marks in the industry due to their short product cycle with others such as Zara replenishing their stores on a weekly basis. The cotton, textile, and garment GSC have always been considered as outsets of globalisation and in absorbing a large pool of employees across the world (Hurley 2005, p. Additionally, the changing nature of the industry, the emergence of fast-growing fashion retailers and ‘fast fashion’s’ ability to drive competition on the global platforms have all attracted the attention of researchers in this particular GSC. The rest of the paper discusses the structure of governance, how different actors respond, and the winners and losers of clothing and fast fashion.

Structure of Governance The SCM determines the ability of the players in this industry to avail products to the market in a trendy manner, which is the identifying tenet of this market. H&M has 100 designers based at its Stockholm headquarter and 50 pattern designers. The company also budget controllers located at the company’s headquarters that oversees its financial resources globally (Leeman 2010, p. On the other hand, Zara has its design input function originating from designers, marketing experts, and consumers. Zara has 300 designers with a specialty in designing men’s, women’s, and children’s fashions (Leeman 2010, p. This demonstrates that Zara has an active R&D department that embraces customer insights when they are designing new fashions. On the other hand, Benetton owns a central technology or capital-intensive operation at its headquarter.

This has enabled it to run its manufacturing activities in a decentralised and specialised way. Consequently, the company continues to exploit the advantage of geographical factors evident in Italy. The manufacturing operations at Benetton utilise a network of contractors, who are also allowed to use sub-contractors. Customer insights contribute to the customisation of clothing and fashions in the later stages of the manufacturing phase of garments at Benetton, a reason why the company dyes its clothing at when garments are almost entering the distribution and retailing stages to allow flexibility in colours of the designs. For instance, H&M and Zara have warehousing facilities to enable them to effectively manage their stock inventories. However, stock management at H&M occurs internally.

In addition, H&M conducts physical distribution utilizing transiting subcontractors at its Hamburg terminal. The company has a centralized store stock room called “Call-Off Warehouse,” that facilitates an effective replenishing of all its stores (Leeman 2010, p. The centralization of stock management at H&M plays a key role in ensuring effective control as well as synchronization product distribution activities. The Zara stores ensure that their fashion only lasts up to 15 days before replenishing them. The concept of the store size and how it relates to the lead time of each fashion company is illustrated further by Benetton’s largest size ranging from 1,500 to 3,000 square meters compared to H&M and Zara (Bhardwaj & Fairhurst 2010). Benetton seeks to create a clear balance between its large-sized stores and smaller third-party-owned ones to ensure it maintains customer loyalty.

The megastores help the company to display its fashions which stay at its stores up to six months. Besides the store sizes and the specific roles they play in SCM of Zara, H&M, and Benetton, the number of stores and their distribution in the countries of operation plays a vital role. However, these companies have their key operations managed from their headquarters. The governance concept of GSC is instrumental in the management of stock and distribution of products in the clothing and fashion industry. According to Gereffi and Fernandez-Stark (2011), governance, as it pertains to GSC, is the power and authority relationships that determine how firms control and allocate their financial, material, and human resources within their supply chains. For instance, companies such as H&M and Zara have established regulations or standards their suppliers must meet to embrace a mutual relationship.

Also, this helps these companies to ensure that the raw materials suppliers conform to deliver raw materials conform to certain attributes. Fashion companies exploit modern technology to spread the investment across a broader customer base. The Social Processes of GSC A range of governance structures of the GSC has been explored and implemented as discussed above. Gereffi and Fernandez-Stark (2011) discussed the four dimensions of GCC/GVC. However, the criticism indicated that these dimensions could not be comprehensive without incorporating the “social processes” as it traverses across all GSC system. Consequently, Henderson et al. Therefore, when firms and their partners engage in negotiations in more or less equal power. The use of a balanced network by MNCs has been used in the fashion industry to enhance their relationships with their partnering or subsidiary firms as well as their workers.

Zara is one of the fast fashion firms that has excelled significantly in using a balanced network. According to Hurley (2005), Zara works directly with its Bulgarian manufacturers, whereby the latter enjoy a great deal of autonomy. The Bulgarians are allowed to use fabrics of their choice, although the resulting clothing must have designs conforming to Zara’s needs. (2002) places a higher premium on social processes of SCM. Henderson et al. (2002) argued that employees contribute directly or indirectly to the success of a global company’s chain. Although discussed piecemeal in GCC/GVC models by Gereffi and Fernandez-Stark (2011), the rather do not appreciate the social process of GSC. Regarding the balanced network, which embraces workers as an important part of the GSC.

111), the company directly runs its operations including in the manufacturing subsidiaries in other countries. For example, the Bulgarian manufacturing plants are run by Greeks. Additionally, materials are cut by Greek-based factories transported to Bulgaria, sewn, and then returned to Greece for labelling. Different actors responded differently. The government had a standard minimum wage. The subsidiary manufacturers of Benetton seem to be attuned by the mother company’s operation of the chain. For instance, the Hungarian manufacturing plant has appointed a coordinator to oversee all operations in the country, who then reports directly to the headquarters (Hurley 2005, p. The company always respond by ensuring that all activities are synchronised to ensure timely store replenishment. The workers gain through this governance structure by access benefits such as paid overtime, permanent contracts, and a good working relationship.