Supply Chain Practices of Three European Apparel Companies: Zara, H&M and Benetton
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Case Details:
Case Code : OPER067
Case Length : 21 Pages
Period : 1990-2007
Organization : Tesco Plc.
Pub Date : 2008
Teaching Note : Available
Countries : UK
Retail
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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III. Benetton
In 2004, Italy-based clothing company Benetton SpA (Benetton)
formally adopted the 'Dual Supply Chain'system. The new system was a top down,
pull driven supply chain, which enabled the company to bring in more products on
to the store shelves more often, in accordance with the growing demands of the
customers and changing fashion trends...
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Design
The responsibility of designing, and keeping tabs on the innovations happening
in the apparel retail sector remained with the headquarters of Benetton.
Benetton had a design center at Ponziano, Italy. The design center had several
designers, from various backgrounds and cultures. The designers worked in three
groups, with the first group taking care of the commercial aspect of the
products, the second group carrying out research on the fabrics and the third
responsible for graphics...
Production
Benetton manufactured garments using a vertically integrated model. While
technically sophisticated parts of the garment manufacture process were retained
in-house, labor intensive parts were outsourced...
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Distribution
The clothes were distributed through a distribution center located in Castrette,
Italy. It was spread across 20,000 square meters, and could handle around 40,000
cartons, both incoming and outgoing, every day. From the distribution center,
the garments were sent to around 5,000 Benetton outlets located across the
world...
The Dual Supply Chain
Each fashion season generally began with ten alternative colors of which only
two or three recorded high demand. As Benetton delayed dyeing the garments, it
provided the company an opportunity to respond to the demand on time...
Exhibits
Exhibit I: Zara's Supply Chain
Exhibit II: Supply Chain – H&M
Exhibit III: Benetton – Manufactuirng Process
Exhibit IV: Benetton's Dual Supply Chain
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