The Hugo Boss Group, based in Metzingen, Germany, is one of the world market leaders in the premium fashion

and luxury segment of the apparel market. The Group focuses on developing and marketing high end women’s and men’s fashion and accessories. The products are predominantly manufactured by independent suppliers. With its brand world, Hugo Boss targets different, clearly differentiated consumer groups. The brands cover an extensive product range consisting of classic modern business wear, elegant evening wear and sportswear, shoes and leather accessories, as well as licensed fragrances, eyewear, watches, children’s fashion, home textiles and motorcycle helmets. Today, Hugo Boss sells their products in 124 countries worldwide. The most important sales region is Europe, with 61 per cent of Group sales in the fiscal year 2011. America accounts for 22 per cent of sales and Asia for 15 per cent. 2 per cent of revenues are generated by royalties Product development
The innovation and development process stands at the beginning of the value chain and therefore plays a decisive role in the subsequent success of the collection. The aim of product development for any brand is to ensure sustained, modern brand management and differentiation. As a global leader in the fashion industry, creativity and product innovations are also most important success factors for Hugo Boss. It is highly important for Hugo Boss to present the consumer with fashionable, innovative, high quality, a guaranteed perfect fit and unmistakable signature design products each season and therefore to keep offering new incentives to buy. Hugo Boss has divided the organisation of its brand and creative management into the segments of men’s wear and women’s wear. In men’s wear segment, responsibility is subdivided into the various group brands. The men’s wear segment is thus organised into the areas of Boss Black Clothing and Boss Selection, Boss Black Sport’s Wear, Boss Green, Boss Orange and Hugo, each of which is headed by a responsible creative director. On the other hand, creative management of the women’s wear segment is combined for all brands (Boss Black, Boss Orange and Hugo) under the management of a single creative director. Under the leadership of the creative directors responsible, the design and development teams manage the individual product categories of the different brands at the Hugo Boss’s four development locations in Metzingen (Germany), Clodrerio (Switzerland), Morrovalle (Italy) and Scandicci (Italy). The development department are usually staffed by skilled fashion designers, tailors and clothing technicians and engineers. In the collection development phase, the creative management defines the current collection statement, draws up the colour, theme, form and fabric concepts, and establishes target prices. To meet consumer’s requirements, feedback on the previous collection is systematically gathered and analysed in the group’s own retail business and from its wholesale partners before creative development begins. At Hugo Boss, in searching for new ideas, the creative teams also take inspiration from impressions that they gain from areas such as architecture, design and art, as well as from new technologies and social and economic developments.
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The main aim of product manufacturing and sourcing team is to ensure the on time delivery by maintaining the highest quality standards expected from Hugo Boss merchandise.
In the second step, the creative department hands over sketches to the pattern design department, where the implementation of the creative ideas is verified in technical tailoring terms. The models are then developed into prototypes in the technical development. In order to guarantee the quality standard of the products, work here focuses on the development of the innovative and high quality manufacturing techniques and the selection of appropriate fabrics. The prototypes undergo extensive tests which, among other things, provide the information on the materials physical properties that are required for subsequent series production. The suppliers are already involved in the process in this development phase, for instance in the selection of raw materials and outer fabrics.

merchandise vendors of the brand are in most case provided the necessary patterns but source the raw material themselves. Merchandise in the area of casual wear and sportswear is primarily sourced from Asia, Eastern Europe and North Africa. Hugo Boss recently opened the sourcing office in Hong Kong for optimisation of sourcing processes of casualwear and sportswear in Asia. This office majorly co-ordinates the sourcing activities for both raw materials and merchandise in Asia. This close supervision locally creates advantages with regard to the quality and speed of workflows. It is very important to Hugo Boss that vendors have an understanding of the products and their design that meets the high requirements of the premium and luxury goods segment. The selection of the vendors is purely based on objective technical production criteria as mentioned below: • Precise production techniques • Production expertise • Highest product quality • Cost structure • Environment friendly • • • • Technology innovation capacity Productivity Financial strength Social compliances

Virtual prototyping
In order to simplify and speed up the technical development process, recently Hugo Boss launched the project to facilitate computer based, virtual development of the selected product categories. The virtual prototypes can be discussed and adjusted flexibly directly on the computer, not only with the internal persons involved in the process but also with the suppliers worldwide. The close cooperation between the development teams and the manufacturers means that the products can be developed not only more quickly and with higher quality, but also at a lower cost due to the reduced need for physical prototypes. Following the prototyping phase is the so called sampling, i.e. the production of a sample collection and its representation and sale. Afterwards the ordered pieces are produced and sold to the end consumer.

Product manufacturing and sourcing
The main aim of product manufacturing and sourcing team is to ensure the on time delivery by maintaining the highest quality standards expected from Hugo Boss merchandise. To achieve this, sourcing team constantly works to ensure transparent, efficient and flawless structures in the sourcing and manufacturing process by selecting suppliers in a targeted manner, strengthening existing supplier relationships and adhering to the highest technical production standards at Hugo Boss own production facilities. At present, approximately, 79 per cent merchandise of Hugo Boss is manufactured by independent vendors and around 21 per cent is by Hugo Boss’s own factories. At present Hugo Boss are having five production facilities out of which below three concentrate on apparels: 1. Izmir (Turkey) – For suits, trousers, jackets, shirts and women’s wear clothing 2. Cleveland (USA) – For suits mainly for American market 3. Metzingen (Germany) – For small series production of suites, jackets and trousers along with manufacturing of prototypes, sample pieces and individual orders and exclusive BOSS Selection tailored line and made to measure suits are also manufactured here Hugo Boss Group is working with around 320 vendors for contract manufacturing and merchandise. The sourcing volume is distributed across a global network of vendors. The main advantage of this global spread is to minimise the risk and it makes brand independent as possible of single sourcing locations and manufacturing companies. Sourcing activities relate to raw materials, contract manufacturing and merchandise. The sourcing of raw materials includes predominantly fabrics but also components such as linings, buttons, threads and zippers. The majority of raw materials used internally and in contract manufacturing are sourced in Europe and fabrics are purchased from Italy. Contract manufacturing is used chiefly for the production of suits, jackets and trousers. In these product groups, Hugo Boss primarily works with companies in Eastern Europe. For product created in contract manufacturing, the vendor receives the fabrics and other components to be used along with the patterns. In contrast, sourcing for casual wear and sportswear is largely based on purchased merchandise. With this type of sourcing, the

The group has a strong interest in long-term co-operation with its vendors. The joint development of production expertise ensures the high quality for which Hugo Boss products are known around the world. Close co-ordination between the manufacturing companies and the technical development is essential particularly in the light of the shortened lead time. For instance, technical production considerations are integrated in the product development process at a very early stage. The vendor’s feedback on the fabrics and patterns used in past collections is likewise taken into account in developing new designs.

Quality assurance
End consumers expect an extremely high quality from Hugo Boss products and that’s a reason brand makes high demands on the quality of its product. The quality assurance starts from the initial phase of the product. The development phase is vital in ensuring this. Good co-ordination from an early stage between the brand and creative departments, the pattern designers and the technical developers is necessary. All officials at the development centre, the pattern designers, who basically draw the products cuts, and the product developers, who realise it technically and commercially, work together in a very early phase of product creation. The team is experienced and qualified enough to identify not only the potential for improvement but also shortcoming in the designed at an initial stage so that the problem gets solved before manufacturing of the bulk start. Product development and quality assurance at Hugo Boss is also characterised by intensive collaboration between the internal creative and development teams on the one hand and the external vendors and technology partners on the other hand. This not only ensures a smooth subsequent production process, but also assures Hugo Boss its competitive advantage in manufacturing technology and product quality. The vendors are provided with standardised quality and processing handbooks that document the quality requirement to assure the quality at the manufacturing stage. To meet the high quality standards, the manufacturing process is automated where economically feasible so as to minimise manufacturing tolerance. Hugo Boss also expects from their vendors to adhere to manufacturing standards which is ensured through fixed controls that are always carried out at certain process steps in the production line. Random checks of individual process steps are also performed on a regular basis
By Vasant R Kothari, Assistant Professor, NIFT, Bangalore (Author can be contacted @ www.vasantkothari.com). The article is his third input from the series of articles on sourcing practises of international brands.
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