Group 7:Hannah van Geerestein, Reference list

Kashmanian, R. M. 2018, Supplier codes of conduct: Company authorization of subcontractors.

Monica Jones,
Siran He, Kui Wang, Litong Dong,
Environmental Quality Management, vol.27, no.4, pp. 9-27, Viewed 29 September 2019, <
https://onlinelibrary-wiley-com.ezproxy.lib.uts.edu.au/doi/full/10.1002/tqem.2155>
Cano, X. (2018). Winners in fashion retailing need to optimize inventory and boost supply chain agility,
Viewed 30 September 2019, https://www.openbravo.com/blog/winners-in-fashion-retailing-need-to-
optimize-inventory-and-boost-supply-chain-agility/

Qishan Su Paton, E. (2018). H&M, a Fashion Giant, Has a Problem: $4.3 Billion in Unsold Clothes, Viewed 30

Background of H&M
September 2019, <https://www.nytimes.com/2018/03/27/business/hm-clothes-stock-sales.html>

-H&M is a fast-fashion sector of

clothing, accessories and footwear for
women, man and children.
-H&M do not owns factories,
cooperated with more than 800
independent suppliers that came from
21 lowest wage countries.
-Provide the last fashion trends with
affordable price in order to track their
competitors (ZARA, ASOS).
Issue 1: Inventory Problem Solution & Recommendation 1
-Last year, company has be struggling with large amount -Change the progressing process to short lead time, enable
unsold inventory and company decide burn these stock to full-price sales that lead to overall financial performance
create energy (Paton 2018). improved (Cano 2018).
-Large scape of sales and profits dropped.
Causes: -H&M should invest in sustaining a better product principle
-Opened 220 new stores and expansion on e-commerce that goes hand in hand with agile development.
under big competitions on fast-fashion market.
-H&M is transitioning to new logistic systems and
automation of their warehouses.
-Inaccurate weather and demand forecasts.

-H&M’s environment is characterized

by a highly volatile demand and short-
lived product life-cycles.

Issue 2:Unethical Behavior From Suppliers Solution & Recommendation 2 Conclusion

-H&M does not have own manufactures and suppliers are -H&M as a European company can partly move its suppliers - Moving the production closer to
from developing countries follow with political and legal from Asia to Europe. Because most of European countries has European borders will reduce the
issues. Its creates negative impact on brand image. (e.g. comprehensive legal system and currently Asian countries company’s lead times.
suppliers from Bangladesh employed child labor) losing their competitive advantages on low labor cost.
-Investments in artificial
-Illegal operation also may cause serious supply delay if the -Company should set up complete and strict codes of conducts intelligence and advanced
local government takes mandatory measure. to suppliers (Kashmanian 2018). analytic will enable the company
to respond quicker to its highly
-The punishment for unqualified suppliers should be more dynamic marketplace.
serious, for some suppliers which have negatively influenced
the brand image of H&M, H&M should immediately terminate -Necessary to take actions on
the cooperation with disqualified suppliers. issue of child labor.

-Make strict management of

suppliers, minimize future losses.