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Hennes and Mauritz more remembered as H&M started their business in

a small Swedish town named Vasteras. The Swedish person Erling Persson in

194 opened his !irst store "alled #Hennes$ in Vasteras. %t that time the "lothing

range was limited to women s wear onl. This "hain was e'pended in the 19()

and spread in the neighboring "ountries o! *enmar+ and ,orwa in 19-). %!ter

the a"uisition o! Sto"+holm based Mauritz wid!ross in 19-/ H&M was "omplete

and Erling Persson renamed the store as Hennes & Mauritz. The "ompan

e'pended into men s and +ids wear. Then0 H&M went publi" in 194 and

"ontinued its geographi" e'pansion beond S"andinaia and started their

business in 2reat 3ritain in 19-. H&M has started to spend more on adertising

and design and a""elerated its e'pansion in the Europe. n the new millennium0

the showed !ast deelopment as the opened their !irst store in 5S% in 6))) and

H&M7s (0/ billion turnoer in 6))6 8Pahl & Mohring0 6))/.

3 the end o! 6))0 H&M was operating about 1()) stores in the 69

"ountries all oer the world. H&M has more than ()0))) emploees. H&M

outsour"e its produ"tion !rom )) suppliers o! "lothes. H&M was the largest

!ashion "lothing retailer until 6))(0 but a!ter that the !aster e'pansion o! Spanish

group ndustria de *iseno Te'til0 whi"h is more remem:bered as ndite' too+ oerand H&M lose their mar+et share 8Pahl & Mohring0 6))/.

H&M is more internationalized as "ompared to its "ompetitor li+e ndite'

and 2ap be:"ause more than 9) per"ent o! its turnoer "omes !rom oerseas in

6))(. H&M is iewing the same pattern as o! ;ara and 2ap0 n". b sele"ting the

international mar+ets based on phsi"al and "ulture distan"e !irst and then on

e"onomi" indi"ators li+e pur"hasing power0 rate o! emploment and pur"hasing

behaior.


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the lo"al mar+et. @e need to adapt but not at the e'pense o! loosing what ma+es

us who we are$.

The +e !a"tor behind H&M su""ess "an be identi!ied b the lo"ation o! its

store0 !le'ibilit o! its produ"tion and its low pri"es. 2erman is the biggest mar+et

o! H&M with 6 per:"ent o! the "ompan total reenue 8>opez & i>i0 6)).


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2ambar 1. H&M Supply Chain Model

@h there is a need to integrate the lean and agile suppl "hainC To !ind

the answer the preious pages need to be turned= D>eanD is the name that ames

@oma"+ gae to the Toota Produ"tion Sstem in the boo+ #The Ma"hine that

Fhanged the @orld.$. %ppling lean to the entire suppl "hain is not a new

"on"ept0 but er !ew hae had su""ess doing it. ,alor et. al 81999 de!ined the

lean as0 #>eanness means deeloping a alue stream to eliminate all wastein"luding time0 and to enable leel s"hedule.$


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2ambar 6. Tabel penggunaan Lean danAgile manufacturing

2ambar di atas menelas+an mengenai penggunaan dari 6 tipe SFM0

aitu I lean manufacturing dan agile manufacturing. 3eri+ut adalah gambar

mengenai perbedaan dari lean dan agile manufacturingI

2ambar J. Perbedaan lean dan agile manufacturing

%s per the "ase stud #Suppl ean suppl0 the mar+et uali!iers

are Aualit0 >ead time and Seri"e leel and the winner is the "ost. n addition=


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,alor0 Towill and Fhristopher 86))) suggested that agile suppl "hain is !or

!ashion goods and lean suppl "hain is !or "ommodities 8dilihat di gambar 4.

2ambar 4. Market qualifier dan winner untu+ lean dan agile manufacturing

,ow the "on"ept o! integration o! lean and agile paradigms is originated

to "apturing the adantage o! lean and agile paradigms su"h as to ma'imize the

e!!i"ien" and utilization o! the operations and "ustomization o! high leel o!

produ"ts. Fhristopher and Towill 86))6 pointed that0 #the lean "on"ept wor+s well

where demand is relatiel stable and hen"e predi"table and where ariet is

low.$ eagilitB and0 as it is

pa"+ed with the best out"omes o! lean and agile.

Lesultant= the integration o! lean and agile suppl "hains "an thereb

adopt a lean manu!a"turing approa"h upstream0 enabling a leel s"hedule and

opening up an opportunit to drie down "osts upstream while simultaneousl still

ensuring that downstream should hae an agile response "apable o! deliering to

an unpredi"table mar+etpla"e. The need o! integration or marring the lean and

agile suppl "hain is to rea"t e!!e"tiel on a olatile demand while redu"ing


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waste and "ost and improing ualit and seri"e leel. Please see table 84 !or

bene!its o! >eagileB suppl"hain.

2ambar (. ?euntungan penggunaan Leagilemanufacturing

There are parti"ularl three was o! marring lean and agile paradigmssuggested b resear"hers su"h as0 Pareto Fure approa"h0 *e"oupling Point

and base and surge demand. These three was o! marring lean and agile "an be

used in an point o! time and in an department0 su"h as design0 pro"urement0

manu!a"turing et". n a parti"ular suppl "hain these approa"hes "an be used

!reuentl0 su"h as Pareto /)N6) rules and separation o! base & surge demand

"an be used in design0 manu!a"turing0 !ore"asting or while ta+ing the "riti"al

de"isions su"h as Standardisation o! produ"ts0 postponement de"ision et".

These approa"hes gie !le'ibilit to the pro"ess and enable to postponethe de"isions and lower the inentor and most importantl minimizing the waste

while optimizing the per!orman"e and ualit. *e:"oupling point approa"h is the

main idea to hold the inentor in shape o! in"omplete produ"t shape and

assemble the produ"ts instantl or in a shortest period on "ustomers demand.

Pra"ti"al impli"ation o! these approa"hes gies the bene!it o! integration o! lean

and agile suppl "hain. The pra"ti"al was o! marring lean and agile proide

aailable and a!!ordable produ"ts0 8Fhristopher & Towill0 6))1 instantl to the

"ustomers in a olatile demand su"h as


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2ambar -. *iagram ?ura Pende+atan Metode Pareto

n the late 194)s ualit management guru oseph M. uran

suggested the prin"iple and named it a!ter talian e"onomist Vil!redo Pareto0 who

obsered that /)O o! in"ome in tal went to 6)O o! the population. Pareto

%nalsis is a statisti"al te"hniue in de"ision ma+ing that is used !or the sele"tion

o! a limited number o! tas+s that produ"e signi!i"ant oerall e!!e"t= stated Towill0

,alor0 ones 86)))0 Fhristopher0 Towill 86))1 Haughe0 86)). t uses the

Pareto Prin"iple= is also +now as the /)N6) rule0 the idea that b doing 6)O o! the

wor+ ou "an generate /)O o! the bene!it o! doing the whole ob

8Haughe06)).

This rule "an be applied on almost anthing su"h as /)O delas arise

!rom 6)O o!"auses0 6)O o! sstem de!e"ts "aused /)O o! problems 8Towill0

,alo0 ones0 6))). #The Pareto Prin"iple has man appli"ations in ualit

"ontrol. t is the basis !or the Pareto diagram0 one o! the +e tools used in total

ualit "ontrol and Si':Sigma$ 8Haughe0 6)). n !igure 81 Fhristopher and

Towill 86))1 suggested that0 6)O o! the produ"ts are easil predi"table and "an

be standardised and the lend themseles to lean manu!a"turing0 !urthermore the

/)O o! the produ"ts are in agile manu!a"turing be"ause o! less predi"tabilit0

whi"h reuire ui"+ response to mar+et$

The !urther marring o! lean and agile "an be a"hieed b "reating

de"oupling point= in a produ"tion pro"ess it is "ommon to introdu"e de"oupling

points where produ"tion lead time is mu"h longer then a""eptable order lead time


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8Fhristopher and Towill0 6))). The de"oupling point ta+es phsi"al sto"+ to

a"hiee the adantage o! di!!erent management and "ontrol tools to e!!i"ientl

manage the both side 8input & output o! the inentor 8Velde and Meier0 6)).

The other side o! de"oupling point is the natural boundaries o! organisations and

departments with in the pro"ess 8Fhristopher and Towill0 6))10 Velde and Meier0

6)).

t is also the hub to meet the need and "apabilit on either side o! point.

@ith in a suppl "hain there "an be man numbers o! de"oupling points 8Towill0

,alor and ones0 6))). #% de"oupling point diides the alue "hain into two

distin"t parts= one upstream with "ertain "hara"teristi"s and one downstream with

distin"tl di!!erent "hara"teristi"s$ 8Glhager0 Selldin and @i+ner0 6))-. n !igure

8J Fhristopher and Towill 86))1 suggested that0 #b utilising the "on"ept o!

postponement "ompanies ma utilise lean method up to de"oupling point and

agile method beond that.$

2ambar . The Decoupling Point

Separating demand patterns into #base$ and #surge$ elements is an

emploment o! hbrid strateg. #3ase demand "an be !ore"ast on the basis o!

past histor whereb surge demand tpi"all "annot. 3ase demand "an be met

through "lassi" lean pro"edures to a"hiee e"onomies o! s"ale whereas surge

demand is proided !or through more !le'ible and probabl higher "ost0

pro"esses$ stated 8Fhristopher and Towill0 6))1.


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a"hieed b "lassi"al lean manu!a"turing with low "ost and less !le'ibilit and

surge demand b agile with high "ost and high !le'ibilit.

The "hallenge in retailing is to respond to "hanging demand0 seasonalit0

pri"e "ompetition0 "ore important produ"ts with high seri"e leel goal in right

time. H&Ms goal is to be +nown as a "ompan whi"h is "hanging with "hanging

!ashion trends and to !ul!ill this promise the whole suppl "hain has to be

designed to support this idea. This sn"hronization "an be analzed in the suppl

"hain !rom suppliers till the end users

1. Supplier

%s the "ompan H&M is retailer and its "ore "ompeten" is stores

management not the produ"tion management but it is o! prime importan"e to

!a"ilitate the suppliers with right in!ormation on right time0 so suppliers0 sub

suppliers and transport and hae a snerg. The biggest "hallenge and

reuirement o! this !ashion business is agilit and to empower supplier to redu"e

lead times. Ledu"ing the lead time "omes under postponement0 whi"h means

that when "ustomizing the produ"ts0 there is also possibilit o! redu"ing lead

times. n this wa supplier will get more time !or produ"tion. Light in!ormation at

right time is er important in the !ashion retailing.6. Law Materials

%s raw materials management and pro"essing is the main "ontributor o!

the lead time it is uite eident !rom answers o! the "ompan that supplier are

spe"ialized in "ertain areas0 whi"h "an be denim0 +nitted0 woen0 and man: made

!ibers. So i! eer suppliers is gien a lot o! arious produ"ts !rom these

"ategories means the "annot master one and one sup:pliers made arti"le is not

selling well whi"h means produ"tion loss where as another sup:plier "an hae

huge orders whi"h are oer and aboe to the possible and allo"ated "apa"it is

not good !or the suppl "hain. There!ore0 the idea o! spe"ialization is empowering

the suppliers to !o"us on narrow range o! business and hae semi !inished and

standard !abri"s to rea"t to the ui"+ demand "hanges with an ease in planning.

% good e'ample "an be that i! one "olor bla"+ is selling well and blue is not

selling well0 then and obious interpreta:tion is that stores will be run out o! sto"+

!or bla"+ and will hae e'"ess blue in sales !loors0 so the damage is two!old !or

this design and onl responsie supplier with short lead time "an rea"t with


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replenishment o! right sto"+ +eeping units 8S?5s o! bla"+ to balan"e the size

ratio as mu"h as possible.

Qarn "ounts0 >"ra and "omposition is basi"s !or !abri" manu!a"turing in

te'tile produ"ts and i! these are "ertain limited and spe"i!ied !or "ertain suppliers

then the suppliers "an ta+e position on these as the "oloring de"ision is

postponed on these standardized !abri"s.

J. Fomponents and %pparel a""essories

The added on materials whi"h is used in the !inishing o! garments su"h as

"artons0 tags0 sti"+ers0 pol bags0 tapes0 tag pins0 threads are "ertain items whi"h

are not the "ore "ompe:ten"ies o! suppliers. n !a"t the supplier has its own

suppl "hain with its sub suppliers whi"h it is managing it with standardization

and postponement.

Standardized "artons gie an opportunit to hae a running sto"+

aailable all the time in supplier !a"ilit as it is er eas to maintain one size !or

thousands o! S?5s and the de"i:sion o! printing the destination on "arton is

de!erred and printed in house at the dispat"h time. This is big adantage o!

standardizing "artons. 3 this wa0 supplier will get rid o! out o! sto"+ situation

regarding "artons.4. >ogisti"s management

The "ountr o! origin is dependent on the uantit 8olume and

destination "ombination whi"h is soled with the standard "artons !rom eer

supplier to "o:load i! the destination is same0 also this delier is postponed !or

the "onsolidator who is doing a ob !or H&M as third part and the right "ontainer

size and essel is sele"ted with respe"t to the reuire:ment.

To understand the bene!its o! standardization o! materials and di!!erent

postponement a":tiities0 it "an be dis"ussed !rom the initial phases o!

manu!a"turing. H&M uses standardi:zation in man o! their pro"ess in the suppl

"hain. The appli"ation o! standardization and postponement in the !ashion

industr is high. t is also "lear !rom the answers o! our res:pondent that H&M is

using standardization and postponement in his suppl "hain e!!i:"ientl.

1. Law Material Standardization "oupled with PostponementI

3elow mentioned are the pro"esses in raw material standardization whi"h

"oupled with the postponement.

6. Fotton& Qarn


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Fotton & Qarn &M has "lear segments o! "ompositions whi"h hae been

standardized to "onsolidate and !a"ilitate the manu!a"turers to ta+e a position

sto"+s o! desired materials as "otton is"ultiated on"e in a ear and

manu!a"turers hae to bu the right materials !or the "oming ear.

3lended arns whi"h mi'ed in a ratio with man: made materials are also

tri"+ with the high !lu"tuations o! pri"es. >ess ariet in H&Ms "ase is allowing

the manu!a"turers to manage !ewer ariants. Then0 !urther the suppliers are

assigned !ew spe"i!i" material based produ"ts whi"h restri"t the range to be

small at one gien supplier to spe"ialize in it.

J. *eingNPro"essing

Suppliers alread and alwas hae standard materials read in

anti"ipation o! replenishment orders and this "ertaint allows the supplier to

postponement the deingN"oloring pro"ess until the !irm demand arises !rom PGS

8point o! sales. %"tuall0 standardization has de:"rease the response time o!

supplier due to the !a"t the suppliers are sitting with semi !i:nished goods whi"h

has a health impa"t on total suppl "hains response time. Postpone:ment o!

"oloring also allows H&M to order at right time0 otherwise preiousl the "ompa:

n had to base on assumed !ore"ast. 3e"ause now H&M "an e'perien"e thesales !irst in the mar+et and still the "ompan hae the option to "at"h up the

demand with more a""u:rate need !ul!illment rather than preo""upied assumed

order whi"h will also lead to better aailabilit in Stores also aoiding oer sto"+s

4. Futting

The !abri" has another parameter whi"h is the width o! the !abri"0 whi"h is

determined b the sizeNmeasurements o! !inished produ"t. ! garments hae !ie

sizes whi"h are S0 M0 >0 R> and RR> then the sales historNpopulation !igures

also "learl guides that best selling sizes are medium and large in Men s. This

helps to determine one standard width !or ea"h tpe o! produ"t. This standard

width "on"ept a"tuall postpones the de"ision o! a"tual sizes where this is le!t to

the "utting pro"ess to e'tra"t the right sizes !orm the standard !abri". Een some

times !or generi" !abri"s the suppliers also "arr !inished and ded !abri" in

standard !abri" width to aoid the bottlene"+s o! deing be!ore pea+

manu!a"turing wee+s.

(. Pa"+aging


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Forrugated materials o! organi" pulo 8material used in the "artons0 whi"h

is li+e sheet o! brown paper in beige "olor are standard reuirement !or H&M

"artons0 and sub suppliers are des"ribed the spe"i!i"ation o! laers o! the paper

!or "arton whi"h is same !or all H&M produ"ts0 so the sub suppliers "arr

standard material read all the time to !ul!ill !lu"tuated demand. The "arton bo'

size is standard as well !or all produ"ts whi"h allow the H&M supplier to "arr a

sto"+0 as this is a standard bo' !or eer produ"t and an essential impor:tant item

needed in the !inal pro"esses. This standardization o! "arton allows the supplier

to use it !or all "ombination whi"h is destination "ountr0 warehouse number0 port

o! entr0 "ategor 8men s0 women s size0 uantities0 net and gross weight. This

in!ormation is post:poned until the a"tual goods are pa"+ed with all the

in!ormation read and then the right in!ormation is pasted on standard "arton in a

sti"+er !orm whi"h is "alled %S,0 %dan"ed Shipment ,ote. The shipments !rom

multiple suppliers in one "ountr are sent to the no:minated "onsolidatorNlogisti"

spe"ialist in port area to "onsolidate the shipments !rom re:

"eier s perspe"tie and it is er eas !or them to a""ommodate same

size "artons !rom eerone to hae better !illing rates in "ontainers to aoid waste

o! spa"e.-. Fare nstru"tion >abel

Fare instru"tion label used is standard whi"h enables H&M retail and

logisti" team to steer to multiple "ountries0 swap between stores0 as these are

generi"Nstandard garments with 5PF number 85niersal Produ"t Fode whi"h is

same !or all stores. H&M uses standardi:zation in all "are instru"tion labels b

means o! adding language o! eer destination "oun:tr. t is er important and

ne"essar strateg to standardize ou "are instru"tions in order to ease !or our

"onsumer.

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