The Rules of the Fashion Industry

Table of contents


The rules of the fashion industry have changed. Fashion is no longer the diktats of seasonal fashion houses. Fashion today is ever evolving, ever changing. What’s hot today is not tomorrow. The definition of haute couture (high fashion) and pret-a-porter (ready to wear) no longer bear the exclusive association of highly-priced designer garments or expensive boutiques available to the cream of society. The average person be it a teen , college student, guy or girl next door, mums and dads with toddlers, or people in their 40s and 50s ageing like fine wine, just about everyone wants to be trendy, fashionable, well dressed and smart. Affordable, fast-changing fashion is driven by customer needs and demands and not supply. Making affordable, fast-changing styles of fashionable clothes to the consumer is the key success driver of the fashion retailers.

Consequently, the choice of a supply chain management (SCM) model and the supply chain practices adopted by fashion companies are also keeping the customer at the helm.

Traditional Supply Chain Issues in Fashion Apparel Industry

As I begin to research the best possible SCM model for the fast-fashion retail company I’ve been hired for, I first seek to understand the limiting factors in the traditional supply chain management in apparel industry. My analysis of the broad issues are as follows:

Changing Customer Tastes Unmet Due to Long Lead Time

In any retail operation, particularly of fashion garments, there is variability in consumer demand due to changing tastes. For example tunic tops last quarter, jeggings this quarter and so on. Changing consumer tastes and long lead time from design to production render ordering of fashion garments risky. The long lead time also hinders offering variety to consumers in terms of styles and range. As consumer tastes become more diverse and fast changing, increasing the fashion range and decreasing the garment lifecycle, whilst managing inventory becomes exponentially challenging.

Unpredictability in Demand Resulting in Inventory Costs

The problem of selling fashion garments due to demand uncertainty has grown enormously for fashion retail houses. Adding to this problem is the level of SKUs (stock keeping units), which raises the level of uncertainty if a particular range of fashion garment will sell or not in a given season. This means the retailer carrying a range of fashion garments that don’t sell or overstock and also that sells beyond expectations resulting in running out of stock.

Delays in replenishment for not having an inventory of fashion garments in high demand will result in stock-out costs. Therefore, inventory is not always undesirable.

Three types of costs are typically incurred in inventory:

  • Enforced markdown of unsold overstocked garments
  • Loss of sales due to stock outs of high-demand clothes
  • Warehousing costs

The level of inventory will depend on forecasted demand, frequency of orders, lead time and cost to receive replenishment.

Inflexible Supply Chain Hindering Control

Supply chain includes different requirements and roles from its participants. The typical participants include Supplier, Manufacturer, Distributor, Retail Merchant and Consumer.

The fashion manufacturer’s success hinges on their ability to maintain relationships between each of the entities in the supply chain. In a way, the participants of the supply chain foster dependency and a slight slip at the supplier end has the capacity to bring operations in the supply chain to a grinding halt. This dependency of the manufacturer on various entities of the supply chain necessitates weighing the option of make v/s buy. The strategy involves decision on activities that can be performed in-house versus those that can be outsourced.

Control, quality and speed of the activities within the supply chain are key determinants in choosing make or buy, produce in-house or outsource.

Ineffective Information Flow Impacting Operational Efficiency

The IT infrastructure or lack thereof has a direct impact on the information flow between entities, which in turn impacts the operational efficiency of the supply chain.

A bullwhip effect at the downstream has a significant impact on forecasting, production and inventory at the upstream.

Even if apparel companies install IT systems, it is challenging for companies to obtain sales data that do not own their sales channels. It becomes difficult to refine manufacturing according to sales data.

Countering Traditional Supply Chain Issues – The Fast Fashion Supply Chain Practices

Some of the key words that have stood out from my analysis of the traditional supply chain are changing customer tastes leading to uncertain demand, long lead time, inventory costs, ineffective information flow, IT infrastructure, make or buy strategies.

How did some of the high-velocity fashion retail houses conquer these challengesAn analysis of the supply chain practices at two such fast fashion retail companies Zara and H&M provide key insights.

Quick Response to Shifting Consumer Tastes and Demands

The retail clerks and store managers at Zara determine the new styles to manufacture by feeding sales data back to the manufacturers. Store managers and staff relay customer feedback to regional managers on styles, fabric, cut and colours. While most fashion houses create designs for the public, it is the public that creates Zara’s designs.H&M‘s design team too bring to the stores clothes that customers are demanding. H&M adopts a customer-driven approach to production. By making use of traditional research methods as well as street trends, H&M’s central staff and national offices channelise a lot of their effort into research and prediction of emerging trends.

The new high velocity retailers require frequent shipment in small batches as an ongoing replenishment determined by ongoing sales data as well as customer preferences at sales outlets in contrast to traditional apparel supply chain model where manufacturers made typical bulk shipment per season.

Both H&M and Zara long renounced the traditional industry practice of spring/summer and autumn/winter collections. Their seasonless cycle involves bringing new clothes on a rolling basis throughout the year, which enables designers to receive customers’ reactions to their new line and incorporate them into more new lines rapidly.

Zara has the fastest lead time with a catwalk to rack time of just 15 days.

Increased Flexibility of Supply Chain Through Vertical Integration

The success of Zara’s fast production is in its vertically integrated supply chain model providing total control of its process from design to sale. Zara owns most of its manufacturing capability and is thus able to maintain flexibility of the manufacturing process enabling it to respond to rapidly changing consumer tastes.

About 50% of Zara’s clothes are manufactured in its state-of- the art factories. Zara uses a hybrid manufacturing approach with high demand trendy, highly perishable clothes being produced in its factories in small batches, whereas low demand variability items such as T-shirts and jeans are produced by contract manufacturers.

H&M does not have factories but relies on a network of 750 external suppliers with flexible lead times and low production costs. H&M also pioneered vertical integration with the distribution network. This vertical marketing enables H&M to directly gain and exploit information about sales and customers and accelerate its response to the market.

Vertical integration enables cost savings due to reduced tiers in supply chain.

Better Inventory Management Through Controlled Production

At Zara, if a particular range or style of clothes sells out, it simply makes more of them. If it doesn’t, then it stops production. This approach coupled with Zara’s bi-weekly shipment to retail stores minimises overstock and inventory enabling Zara’s clothes to be sold at full retail price with high profit margins. Zara limits each design to 3 sizes and 3 colours. Zara is efficiently able to move inventory owing to its up-to-the-minute design, just-in time production and delivery.

H&M, which relies on its suppliers aims to find the optimal time and supplier to order each item of clothing. On an average, H&M is able to get supplementary orders in a few weeks for clothes that are selling well. At H&M, the stock management is primarily handled internally. The store stockroom within H&M called the ‘Call-Off warehouse’ replenishes stores with clothes that are in high demand on item level.

Use of Efficient IT Infrastructure for Rapid Information Dissemination

High-velocity operation depends on rapid information flow to a large extent.

All of Zara’s stores are linked to its headquarters electronically. The entire supply-chain operation at Zara from design to retail is digitally controlled. Information flow binds the entire pieces of Zara’s operation together. Information is shared openly across business units that are highly adaptable with decision making capacity.

IT is a crucial component of H&M’s value chain. IT integrates H&M stores with the logistics, procurement departments and the central warehouse. An intelligent procurement system processes sales data gathered from central departments. Communication on design and new product development occurs electronically between departments.

Limitation of Fast Fashion Supply Chain Practices

Clearly, some of the supply chain practices of Zara and H&M have been a break-through in the traditional supply chain apparel industry. While the advantages of their practices are undisputable, it is important to be aware of some of their limitations.

Vertical Integration v/s Economies of Scale

While vertical integration has several advantages, it is important to note some of the limitations. As seen from Zara’s vertical integration model from design to sale and H&M’s vertical integration in distribution, flexibility and control are the key drivers.

However, vertical integration doesn’t enable acquiring economies of scale. Low lead times of Zara and H&M does not give them the cost advantage of high volume discount manufacturing or buying.

Centralised Distribution Centres v/s Global Expansion

Both Zara and H&M are quickly able to replenish garments in their numerous retail stores across Europe. Although both Zara and H&M have scaled up their distribution systems, the centralised logistics will be subject to diseconomies of scale as newer stores are opened in new markets and continents. Shipping garments from their single distribution centre may work well within Europe. However, short lead times and low operational costs may be impacted as they branch out in new territories.

Vertical Integration in New Markets v/s High Labour and Production Costs

To have state- of- the art factories and replicate the manufacturing, distribution process in new countries may be challenging. Potential economic and regulatory variables such as minimum wages or unions may render manufacturing in new countries impractical.

The Best Fit Supply Chain Practices for a Fast Fashion Retail Company

Taking the best supply chain practices of fast fashion houses Zara and H&M and at the same time covering the gap for some of their identified limitations forms the basis of my recommendation.

Seamless Integration of Design Cycles with Inventory Control

Integrate design cycles seamlessly inventory control and thereby control short term expenses with long term performance goals. Customers can be compelled to revisit stores for new designs and catering to their varied tastes through rapid response through effective inventory management

Make Them And Buy Some

The advantages of vertical integration are far too many. But vertical integration as seen is not without limitations. The costs associated with rapid manufacturing maybe suitable for fast forward apparel. However, for clothes with low demand variability, a long lead time with materials and manufacturing costs savings may be more efficient. Low variability garments also enable acquiring economies of scale with bulk manufacturing or buying.

Negotiate Shipping Contracts for Overseas Expansion & E-Retailing

Thinking ahead, as part of overseas expansion and e-retailing strategy, setting up manufacturing and distribution centres overseas can involve significant costs. It would be prudent to set up contracts with 3rd party logistic companies that enable negotiations of transportation costs based on volume and frequency by acquiring economies of scale

Use Efficient IT Systems for Seamless Information Flow

Invest in Enterprise-wide IT systems such as Enterprise Resource Planning (ERP) to integrate all entities of the supply chain. Use of other IT systems such as personal device applications (PDAs) by sales clerks to feed in real-time sales data and customer feedback linked to ERP systems will be a key success driver in dissemination of information which in-turn will positively aid in rapid production.


As a concluding note, emulating the success of fast fashion houses may or may not prove to be the most beneficial approach. Ultimately, the long term goal, positioning and vision of the fast fashion retail company holds the key to adopting the best fit supply chain strategy and practices.


  1. Marketing % 20 Case % 20 Study .htm#Idea _ Generation _ and _Design

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with MyHomeworkGeeks
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Business and administrative studies
Customer 452773, February 23rd, 2023
Business and administrative studies
Customer 452773, March 3rd, 2023
Business and administrative studies
Excellent job
Customer 452773, March 9th, 2023
Social Work and Human Services
Although it took 2 revisions I am satisfied but I did receive it late because of that.
Customer 452603, March 25th, 2021
Great job
Customer 452773, February 13th, 2023
Business and administrative studies
excellent paper
Customer 452773, March 3rd, 2023
Don't really see any of sources I provided, but elsewise its great, thank you!
Customer 452697, May 8th, 2021
Business and administrative studies
Thank you for your hard work and help
Customer 452773, February 21st, 2023
English 101
great summery in terms of the time given. it lacks a bit of clarity but otherwise perfect.
Customer 452747, June 9th, 2021
Business and administrative studies
always perfect work and always completed early
Customer 452773, February 21st, 2023
Business and administrative studies
excellent work
Customer 452773, March 9th, 2023
English 101
IThank you
Customer 452631, April 6th, 2021
Customer reviews in total
Current satisfaction rate
3 pages
Average paper length
Customers referred by a friend
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat

Sometimes it is hard to do all the work on your own

Let us help you get a good grade on your paper. Get professional help and free up your time for more important courses. Let us handle your;

  • Dissertations and Thesis
  • Essays
  • All Assignments

  • Research papers
  • Terms Papers
  • Online Classes