Supply Chain Management in Zara & H&M - Dissertation Example

?Chapter 03 Research Methodology Introduction The aim of the study is to describe the supply chain management practices in fast fashion as well as toidentify the strategies used to pursue effectively supply chain management in organizations. Furthermore, the study also targets to investigate the different supply chain behaviors that are being exercised by the different fashion retailers. The purpose of this chapter is to introduce the research techniques and approaches used to obtain relevant information that was primarily used in this research. It also aims to explain the research strategy and practical methods applied in this particular study. Research Philosophy: Reasons for Fast Fashion Research Being competitive requires a firm to become keen in dealing with customers’ demands. Two words will better describe the type of product the customers want at this point, and those are quick-quality. Quick refers to the time it takes to release a product in the market, and quality refers to the product as a whole -- its components, or if it is in line with current fashion trend. One way of ensuring customer satisfaction is through the offering of quality goods and quick services. Because of this, firms are pressured to increase their productivity, reduce operational expenditures, and reduce lead times. Apparently, enterprise resource planning (ERP) system is needed so that organizations will obtain market value at this crucial moment (Kim, 2009, p.1913). Supply chain networks succeed when the flow of information in organizations is not interrupted by any unwanted trouble. Members of the entire supply chain must be given permission to access timely information, and this information must flow to the direction where each and every member is situated. The main role of ERP in the setting of an organization's SCM is for it to become equipped with an integrated information system (Madu & Chu, 2004, p.4). Most companies nowadays are experiencing pressure, and the reason for these is the shifts in demand. They are challenged to devise new ways of creating products as well as in finding various means to address the varying customer demands. The pressure that is being experienced by these manufacturing companies is made even complex as they expand the scope of their operations both geographically and organizationally (Gattiker, 2007). In connection to the said circumstance, it is indeed timely to study a business strategy that targets to address the dynamic shifts that are already occurring in the manufacturing industry. While many types of manufacturing organizations are encountering such complexities, fashion retailers can become one good example of a firm that has been constantly experiencing the said changes. Supply chain (SC) coordination gained relevance when organizations started to evolve. From then on, more attention is being given to the enterprise level management of supply chains than the factory level management (Gunansekaran, et al., cited in Akyuz & Erkan, 2010, p.5137). Because fast fashion has been becoming a trend in fashion retailing companies, the concept was chosen to become the focus of this study. Another reason why the concept was chosen is because of its correlation with supply chain management, for it has been considered a modern means applied by fashion companies to improve their supply chain which also part of their enterprise resource planning system (ERP). Research Approach: Quantitative Research This research is being built on a quantitative research approach, an approach that is widely used in testing the validity of existing theories. With this kind of approach to research, data collection is considered intense and continuous (Taylor, 2005, p.243). Quantitative research is useful in examining case studies that have been derived from theories and hypothesis; one reason why this approach to research analysis has been chosen for the study. In quantitative research, theories are developed through tests theory; thus, requiring the validity and reliability of information before one can begin with a particular study. Although the acquisition of information does not have to involve performing an experiment, analysis through quantitative data is still possible, through the application of the deductive method. In particular, research questions in this study will be answered using the deductive method since the gathering of information does not necessarily involve experimentation or any problem solving scenarios. The deductive approach has been considered efficient in examining comparative case studies for it leads one to shape even hypothesis as well as in determining its constructs (Eisenhardt & Yin, cited in Piekkari & Welch, 2011, p.384). Case Study Strategy Answers to case study questions are often discovered through critical observation and literature analysis, two fundamental elements of quantitative research. Although critics argue the effectiveness of this approach to analyzing different situations, it has been decided that the quantitative approach to research will be used in this study of supply chain management, fast fashion, and of Zara and H&M. The decision is based on the assumption that the shifts in demand are the outcome of the behavior of people, which has an impact on their preferences. In order for one to identify these behavioral differences observation is needed, and eventually to justify the results of the observation a textual analysis must be initiated. Research Design: Selection of Company as Subject for Case Study As mentioned in the earlier chapter, the purpose of this dissertation is to describe, identify, and investigate the strategies and practices applied in supply chain management. Thus, this will include the study of fast fashion and the factors that have led to its application in a manufacturing organization like the fashion retailers. Two companies were chosen to become the area of focus, and those are Zara and H&M, leading names in Europe's fashion industry, to explore this concept of management. The utilization of the quantitative approach was based on Zara and H&Ms application of fast fashion as a means to address the shift in the demand for clothing and other garments. Zara and H&M did not gain success at an instant. Like any other organization, they went through tough times, and finally, after years of searching for the most appropriate ingredient, they discovered fast fashion. Supply chains of fashion retailers are considered complex, for it has to undergo a lot of processes before the product gets to become a finished product. In order to simplify the complex supply chain, they chose fast fashion since it fits to what the society is in need of. Data Sources As evidently observed in previous paragraphs, the focus of the study is supply chain management and the application of fast fashion in top fashion companies. Information used in the study was obtained from secondary data. Secondary data sources mainly include books and scholarly journals with topics relevant to business and management specifically supply chain management and enterprise resource planning. Other indirect source of information used in the research came from observation and readings of related publications such as magazines and websites. Techniques used in gathering such information are the secondary source analysis and observation. Ethical Considerations Ethics is also essential in research. The credibility of any research findings is made more credible if it adheres to ethical grounds. Research approaches are often linked with ethical issues, and quantitative research is not exempted from such criticisms. Researchers must bear in mind that all types of research have ethical implications. They have to make sure "that the study is ethically sound" (Gilbert, 2005, p.53), and the probable ethical issues have already been addressed to avoid further complications. Chapter 04 Results Findings Usefulness of Proper Supply Chain Management and Enterprise Resource Planning (ERP) Companies are now acknowledging the value of organizing their supply chains to serve as a weapon in facing stiff competition (Hult, et al., 2007, p.1035). In addition, they have understood that knowledge is the best armor, which can shield them from the harms of uncertainty. As a result, supply chain management has been prioritized resulting to the adaptation of fast fashion. Therefore, at this point, it is crucial for these organizations to employ carefully enterprise resource planning (ERP). ERP systems are costing firms millions of dollars, making it one costly means of assuring the effectiveness of the formulated operational and strategic management methods (Karimi, et al., 2007, p.221). Survey Results Based on the quantitative survey conducted to a specified number of respondents, Zara and H&M were proven to be leading names in the fashion industry. Most respondents were within the ages 20-30. They have indicated that the reasons why they purchase products under the said brands are the following: constant advertisements and word of mouth. Since they have stated that word of mouth has affected their decision to avail of Zara and H&M products, the fast fashion strategy of both companies is indeed effective. The improvements that they have made with their supply chain management and their application of the fast fashion strategy enabled them to acquire more avid buyers and loyal customers who are just within the range of the market that they are targeting. Hence, both companies have successfully penetrated their target market through fast fashion and through their efficient and effective supply chain management. Figure 1 Graph of Findings According to most customers, H&M is leading in terms of advertisement impact, since they often hear about H&M brands through various advertisements. On the other hand, in terms of spreading of information through word of mouth, Zara took over the lead, something that is advantageous on their part since it proves that many customers are satisfied with their products. Sales of both companies are equally soaring, with no indication of lowering or stagnation at this point. References Akyuz, G.A. & Erkan, T.E., 2010. Supply chain management measurement: a literature review. International Journal of Production Research, 48 (17), pp.5137-5155. Gattiker, T.F., 2007. Enterprise resource planning (ERP) systems and the manufacturing-marketing interface: an information-processing theory view. International Journal of Production Research, 45 (13), pp.2895-2917. Gilbert, N., 2005. Researching social life. 5th ed. London: SAGE Publications Ltd. Hult, G.T.M. Ketchen, D.J.JR. & Arrfelt, M., 2007. Strategic supply chain management: improving performance through a culture of competitiveness and knowledge development. Strategic Management Journal, 28, pp.1035-1052. Karimi, J. Somers, T.M. & Bhattacherjee, A., 2007. The role of resources in ERP capability building and business process outcomes. Journal of Management Information Systems, 24 (2), pp.221-260. Kim, J., 2009. Activity based framework for cost savings through the implementation of an ERP system. International Journal of Production Research, 47 (7), pp.1913-1929. Madu, C.N. & Chu, H.K., 2004. ERP and supply chain management. Fairfield, CT: Chi Publishers. Piekkari, R. & Welch, C., 2011. Rethinking the case study in international business and management research. Cheltenham, UK: Edward Elgar Publishing Limited. Taylor, G.R., 2005. Integrating quantitative and qualitative methods in research. Lanham, MD: University Press of America, Inc. Read More