Operations Management Strategies of Zara, Benetton, and H&M: A Report

This report offers a comparative analysis of the operations and manufacturing strategies employed by Zara, Benetton, and H&M, three prominent fast-fashion retailers. The study examines how these companies manage their supply chains, manufacturing processes, and inventory to meet market demands. Zara's focus on unique designs and low inventory is contrasted with Benetton's emphasis on cost reduction through technology and H&M's strategy of short lead times. The report also provides recommendations for each company, such as Zara improving product quality, Benetton leveraging agile supply chain management, and H&M utilizing automation for lead time reduction. The analysis highlights the importance of adapting operations to maintain a competitive edge in the dynamic fast-fashion industry.

Running head: OPERATIONS MANAGEMENT
Operations Management
Name of the Student:
Name of the University:
Author’s Note:

2OPERATIONS MANAGEMENT
Executive Summary
The entire report deals with the operation and manufacturing strategy in the context of
Zara, Benetton, and H&M. It has been received that operation management is effective for such
fashion organization to reduce their operation cost, manage low inventory and meet the changing
demand of the market. However, each of the organization has specific operation management
strategy to improve their sales revenue generation. Zara and H&M need to improve their product
quality along with the unique feature of the product. On the other hand, Benetton needs to be
trendy based on the market demand by utilizing the agile supply chain management. However,
use of automation technology will be helpful for H&M to improve their short lead time strategy.
On the other hand, Zara needs to maintain a good track of their inventory as they focus on the
low inventory.

3OPERATIONS MANAGEMENT
Table of Contents
Introduction ................................................................................................................................4
Operation and Manufacturing strategy in the context of Zara, Benetton and H&M.......................4
Recommendations............................................................................................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................9

4OPERATIONS MANAGEMENT
Introduction
Supply chain management is a vital area of any business to make a balance between the
production and the demand of the market. Operation and manufacturing strategy is a crucial part
of the supply chain management in any business (Zhang et al. 2017). In order to enhance the
profitability in a business it is crucial for the organization to incorporate advance manufacturing
process in the supply chain management. In the recent years it is important for a business to be
competitive in the global market (Caniato et al. 2015). For this reason a good manufacturing and
operation strategy is required. This study deals with the manufacturing and operation strategy in
the context of Zara, Benetton and H&M. Operation strategy of an organization involves in
designing and controlling of the production process. Zara, Benetton and H&M are the popular
fast fashion retailers and operate in the international market. Benetton focuses on the quality of
the product in terms if high durability and quality in comparison to Zara and H&M. In the fast
fashion supply chain there are four stages. At the first stage the garments are designed, next the
second stage focuses on the manufacturing process. Third stage is the distribution of the product
and final stage includes sell of the product. However, the operation and manufacturing strategy
in the context of above three will be discussed and a comparison will be made in this section.
Operation and Manufacturing strategy in the context of Zara, Benetton and H&M
Zara focuses on the catwalk fashion. This fashion retailer adopts the manufacturing
strategy, which involves in designing of individuals pieces and manufactures the products in low
quantity. Hence, their manufacturing strategy is to design the different pieces and to produce low
amount of product (Zara.com 2018). On the other hand, Zara follows low inventory strategy as
one of the operation strategies. In order to manage the low inventory strategy Zara develops

5OPERATIONS MANAGEMENT
unique design as a result their products are sold quickly and they maintain the low inventory.
According to the given scenario, Zara organized their design function through different ways.
The design splits into three segments that are men, women and children. They introduce a small
workshop to execute the prototype.
Benetton focuses on the lower labor cost as the manufacturing and operation strategy.
However, for this reason they have adopted expensive technology. Incorporation of the advance
technology helps this organization to reduce the workforce as well as the labor force. As for
example, automation technology in the manufacturing process is an effective approach of such
organization to decrease the labor cost (Caro and Martínez-de-Albéniz 2015). As per the given
scenario, Benetton starts to lower the labor cost outside the Italy by utilizing the technology in
the manufacturing process. Benetton has a good relationship with supplier to take good raw
materials for their manufacturing process. However, a better manufacturing depends on the
quality of the raw materials (Benetton.com 2018). Benetton focuses on the dying garments rather
than the died thread.
H&M focuses on the reduction of the average lead time through the continuous
development of their purchasing process. However, short lead time is helpful for an organization
to minimize the risk regarding the selection of the wrong item for manufacturing (Caniato et al.
2015). Hence, such short-lead time enables H&M to restock their product quickly and offer them
to the customers at affordable rate. Their another operation strategy is the integration of the
technology in the manufacturing process to increase the productivity (Hm.com 2018). As per the
given scenario, H&M maintains a relationship between the suppliers and the production officers,
which is beneficial to buy correct raw materials for the manufacturing process.

6OPERATIONS MANAGEMENT
According to the above findings it has been observed that Zara follows low inventory
management as their operation strategy. On the other hand, in order to make unique design they
design separate pieces of the clothes in their manufacturing process. However, this organization
mainly focuses on the creativity rather than the quality. Such operation strategy is beneficial for
Zara but this organization always follows low inventory hence, availability of the low amount of
products may create customers dissatisfaction (Zara.com 2018). On the other hand, creating
design in the different pieces of cloths is a big strength of Zara as it helps them to manufacture
unique product in the market. Therefore, Benetton focuses on the reduction of labor cost thus
have adopted automation technology in their supply chain operation and manufacturing process.
Reduction of the labor cost by utilizing the technology is a great approach for this organization to
make their business faster in the global world. Technology helps this organization to finish the
entire process from production to the delivery of the product quickly. However, there is a
loopholes in the automation process as technological damage may hamper the operation and
manufacturing process (Choi and Shen 2017). H&M focuses on short lead time strategy in their
operation and manufacturing process as it helps the organization to reduce the probability of the
selection of wrong items in their manufacturing process. They also focus on the integration of the
technology in their manufacturing and operation process as like as Benetton.
Recommendations
Zara has followed their supply chain management to make the unique product to meet the
changing demand of the customers. Besides that, they manage the low stock, which is one of
their operation strategies. However, Zara mainly focuses on the product feature rather than the
product quality. This is a major loophole of their operation process. They need to purchase
quality raw materials to improve the durability and the quality of the product. However, due to

7OPERATIONS MANAGEMENT
the low inventory the customers may be dissatisfied. If the one item is present in Zara’s store and
it is on hold then it informs other stores about the availability of the product, which may cause
miscommunication. This organization manages low inventory thus they need to keep a good
track of the inventory by sending their staffs in stock observation.
H&M and Benetton focus on the incorporation of the technology in the manufacturing
and operation process. Thus, for these two fashion retailers recruitment of more technical experts
in the operation process will be helpful to improve the use of technology in the operation
process. However, data theft and damage of data are the common problem of using technology in
the operation process. Thus, keeping the security of the data and proper tracking and accessing
the data will be beneficial for these organizations to improve their operation process as well as
the manufacturing process. On the other hand, H&M can improve their short lead time strategy
by increasing the order frequency. Use of automating process such as inventory management
software will be helpful for this organization to reduce the lead time in their supply chain
operation process. Therefore, by providing forecast to the suppliers this organization will be able
to improve their short lead time strategy as it will resist them to purchase wrong materials for
their manufacturing process.
Conclusion
This above study reveals a comparative analysis of the operation and manufacturing
strategy in the context Zara, H&M and Benetton. However, such three organizations focus on the
design and quality of the product. However, it is important for Zara to give more concern
towards quality besides the design of the products. H&M also needs to give their concern
towards quality besides financial stability in their operation process. However, Zara aims to

8OPERATIONS MANAGEMENT
manage the low inventory as their major operation strategy besides that that they create design in
the each piece of the clothe to make an unique product. Benetton focuses on the minimization of
the labor cost by using the technology. On the other hand, H&M adopts short lead time strategy
to make their operation process better. However, it is crucial for these there fast fashion retailers
to increase the efficiency of their operation and manufacturing strategy by implementing and
monitoring it in a proper way.

9OPERATIONS MANAGEMENT
References
Benetton.com. 2018. Benetton. [online] Available at: https://us.benetton.com/ [Accessed 24 Jan.
2018].
Caniato, F., Crippa, L., Pero, M., Sianesi, A. and Spina, G., 2015. Internationalisation and
outsourcing of operations and product development in the fashion industry. Production Planning
& Control, 26(9), pp.706-722.
Caro, F. and Martínez-de-Albéniz, V., 2015. Fast fashion: business model overview and research
opportunities. In Retail Supply Chain Management (pp. 237-264). Springer US.
Choi, T.M. and Shen, B., 2017. Luxury Fashion Retail Management: An Introduction. In Luxury
Fashion Retail Management (pp. 3-9). Springer Singapore.
Hm.com. 2018. H&M. [online] Available at: http://www.hm.com/in [Accessed 24 Jan. 2018].
Jin, H., Yih, Y. and Sutherland, J.W., 2018. Modeling operation and inventory for rare earth
permanent magnet recovery under supply and demand uncertainties. Journal of Manufacturing
Systems, 46, pp.59-66.
Zara.com. 2018. ZARA. [online] Available at: https://www.zara.com/ [Accessed 24 Jan. 2018].
Zhang, J., Onal, S. and Das, S., 2017. Price differentiated channel switching in a fixed period fast
fashion supply chain. International Journal of Production Economics, 193, pp.31-39.