ENTERPRISE RESOURCE

PLANNING

On
SCM STRATEGIES USED BY
H&M
Submitted by,
Aditya kumar (03)
Shankey sawaraj (20)

H&M company profile

Full name- Hennes & Mauritz
Founder- Erling Persson
Established

in-Vsters, Sweden

(1947)
Biggest market- Germany (more than
20% of sales)
Cheap yet chicclothing,mainly for men
and women ages 18 to 45, children's
apparel, and its own brands of cosmetics.
The firmdoesn't own factories but buys
its goods from suppliers primarilyin Asia

H&M supply chain

Different

with other fashion retailing industry, H&M

does not have its own factories. It outsources its
products to independent supplier mainly in Europe
and Asia.
Asia always in charge the base demand which needs
longer lead time, and Europe always in charge of
surge demand which needs lower lead time.
Asia usually has lower cost of production, it is a good
way to reduce the costs.
Europe usually in charge the cloth that are popular
and will be popular because the Europe and America
market always changes fast. And it will not cost a lot
because the quantity of each style will not be much
since trend changes fast.

H&M supply chain

Another

unique supply chain in H&M is its

transportation.
Usually, the production produce by
supplier will directly send to the central
warehouse in Hamburg, Germany and
than deliver to the stores. But if the
production is for a regional market, it will
deliver the production directly to the
segment in the country, and even directly
to the stores to ensure the supply just in
time.

H&M supply chain

H&M

always use the lowest cost

transportation.
Productions produced by European
suppliers is always transported by
railway traffic
productions produce by Asian supplies
always transport by ocean transportation
productions which have to deliver to
stores from warehouse always by truck.

H&M supply chain

H

& M distribution system can handle daily

goods reach more than 160 million pieces,
and there will be 20-55 pieces of new goods
into the store everyday to ensure freshness.
Flexible procurement is the core of the supply
chain of H&M.
Generally, apparel industry purchase
seasonally, but H&M break this mode since
1968. The buyers of H&M use the strategy
that purchase twelve times a year in order to
make change according to the change of
trend.

H&M supply chain

"Sync"

is the concept proposed by H&M's first

CEO that means update detailed list weekly.
So that each procurement departments and
store could know how much of each product
has been sold.
This idea has been on implementing till today
on ICT (Information and Communication
Technologies).
ICT created a closed-loop feedback system
which makes sales, inventory, procurement
plans and capacity information becomes
completely transparent.

H&M supply chain

H&M

claimed that they are faced with a

challenge that how to meet their
requirements to keep up with the rapid
growth of H&M at the same time, and
reduce the impact of transport in the
environment greatly.
H&M plan to use three methods to
improve this situation.

H&M supply chain

Firstly,

H&M decided to avoid air and road

transportation as far as possible.
And then, H&M cooperate with the transport
company that attached great importance to
the environmental protection.
Finally, H&M improved the logistics
efficiency to reduce the impact on the
environment as much as possible.
In 2012, H&M shipped around 90% goods by
sea or railway transport from the supplier
factory to the distribution center.

THANK YOU