Business Operation Management: A Comparative Analysis of Garment Firms

This report provides a comparative analysis of the business operation management practices of H&M, Zara, and Benetton, focusing on their design processes, manufacturing stages, product distribution, and retail strategies. The report highlights the unique approaches each firm employs, from H&M's design collaborations and outsourcing to Zara's integrated production system and Benetton's technology-driven manufacturing. It examines the firms' supply chain management strategies, including the use of technology, partnerships, and outsourcing. The analysis covers the retail stages, emphasizing customer interaction and satisfaction. The report concludes with recommendations for achieving success in the competitive garment industry, including a focus on quality products, technological advancements, employee training, and addressing unhealthy competition and trademark protection. The study draws upon research to evaluate the firms' performances and offers insights into effective operation management.

Running Head: BUSINESS IN OPERATION MANAGEMENT 1
Business in Operation Management
Name of Student
Name of Supervisor
Course Affiliated
Date

BUSINESS IN OPERATION MANAGEMENT 2
Executive summary
Fashion design industries face market challenges. Factories come up with a unique design
that attracts customers. Garment design passes through four critical production stages. First, the
firm starts by designing the garment, manufacturing process, and distribution to suppliers and
lastly display and sell. The last step of selling is vital as it determines the profit the firm makes.
This report seeks to evaluate H&R, Zara and Benetton's firm production process. With a long
history, the firms have recorded a different net profit. The report finalized by making a few
recommendations that are essential for firm success.

BUSINESS IN OPERATION MANAGEMENT 3
Introduction
Extensive research and innovation are essential in ensuring the factory continues to
expand (Shishoo, R. 2012). H&M, Zara and Benetton have known garment firms with a
comprehensive history. Huge market demand, these factories have incorporated customer-related
factors to improve their supply chain. Benetton has an impressive background, having
established 50 years ago as a casual sweaters manufacture. Currently, the firm has over 5000
stores in 120 countries due to its quality production. H&M was established in1947 in Sweden but
now it has offices in 20 countries with 1000 stores. It originated from a fast-fashion concept and
later grew and employs over 40,000 employees. Zara started as the pajamas manufacturing
industry in 1975. The difference in design techniques, manufacturing mode, and distribution
means has brought disparity between the three firms.
Design
H&M design approach is unique as the company engaged pattern designers to help the
company balance fashion, quality and price. In 2004 H&M employees know Karl Lagerfeld to
help the firm with the fashion design process. H&R based on involving 160 in-house designers
together with 100 pattern makers. The designing process takes place in Stockholm, which is
considered the company's largest production site. They develop collections that will meet the
expectations of the customers. Zara design process is different as they focus more on
interpreting new fashion trends bases on information gain in the market. With 300 Designers,
market experts and buyers help the firm to improve the quality of their product. Benetton also
has over 300 designers and conducts market research on the clothing concept. Benetton
customized to 10% while the rest of the products are a standard design.
Manufacturing stage
The manufacturing process largely depends on the market demand of the product and the
firm financial capacity to invest in equipment. The manufacturing process relies on the
availability of the material and procurement process (Giri & Rai, 2013). H&M outsource its
product from the European and Asian market. The firm believes in cost reduction and it
emphasizes motivation and efficiency in the operation. They can manage inventories with the

BUSINESS IN OPERATION MANAGEMENT 4
idea of optimizing on order time of all items. Zara has 20 manufacturing plants used in the
production process. They cut and dye materials and store them in stores. Zara also partners with
subcontracts in pick season and employ labor-intensive operation to beat competition and market
demand. Benetton has a manufacturing plant based in Italy. It uses intensive technology in
production with few works are done by workers; this measure aims at reducing production cost.
Benetton also employs contractors to work specific orders in a different destination. Zara and
Benetton have integrated production system that suits market trends.
Product distribution
Production distribution depends on infrastructure status, transportation cost and security
issues (Bahadır, S. 2011). Making all these factors constant, these firms have different
distribution trends. H&R depends on cost and efficient flow in the distribution process hence in
focus on retailing. In 2012, 90% of H&R distribution was through the sea and real. Logistic
centers play a strategic role in ensuring a constant flow of products and it emphasizes green
transport. Stock is handled internally and subcontractors do the distribution. The call-off
warehouse is a central storage facility for the product in the H&R firm. Zara uses sophisticated
means such as air and trucks, to deliver products. Zara and Benetton have a similar strategy in
production and retail from their market analysis data. They have invested in warehouse
automatization, which is more secure and cost-effective. Despite Zara and Benetton ironing and
tagging the garment, Zara makes two delivery weekly compared to one delivery of Benetton.
Retail stage
The sale and marketing phase is a critical part as it determines the net profit of a firm.
H&R owns its retail stores in different locations. Customers are given a chance to interact with
the firm staff and ask questions. Customer satisfaction is the primary purpose of H&R. Zara
freely engages customers and encourages them to visit the retail shop frequently to see new
designs guaranteed by hardworking staff. Benetton initially used subcontractors to interact with
customers as a third party. But the idea didn't go well as the company owns most of the stores
and runs them to gain full access to customers.
Supply chain management strategy

BUSINESS IN OPERATION MANAGEMENT 5
Supply chain management focuses on initial movement products from manufactures to
distributors or consumers. The process entirely depends on adequate access to information
concerning the quality, quantity, and timeframe for delivery. The current trend in supply chain
management is the use of technology as it's more reliable and accurate than other means. Also,
partnerships and outsourcing help firm to expand through innovation and accessing market trend.
Zara Company is the have the best supply chain management. This is evident in the
delivery made twice a week. The firm has many branches and appropriate customer care services
that focus on satisfying the customers. Also, the firm has market specialists who focus on
analyzing market trends and adverse designers on customers' demand.
Recommendation
Quality products are essential in gaining consumers' trust. The garment manufacturing
industry is a challenging sector as the market keeps fluctuating all time. The firm must not only
aim at achieving maximum profit but also satisfy customers. The use of technology in the
production process is critical as it helps its efficiency and accuracy. Employing an expert who is
training is crucial as it increases the innovation and dedication of the staff. Competition affects
many growing businesses; it's the responsibility of government and international agencies to
control unhealthy competition. Stealing of trademarks and designs is most common in the
garment industry and firm action is implemented to security firms and employment.

BUSINESS IN OPERATION MANAGEMENT 6
Reference
Bahadır, S. K. (2011). Assembly line balancing in garment production by simulation. Assembly
Line–Theory and Practice.
Giri, S., & Rai, S. S. (2013). Dynamics of garment supply chain. International Journal of
Managing Value and Supply Chains, 4(4), 29.
Shishoo, R. (Ed.). (2012). The global textile and clothing industry: technological advances and
future challenges. Elsevier.