ALEXANDRA ALZURIA
We could define procurement as the need to make the required products for the collection procedure of the different industries. It encompasses the relationship with the suppliers, the bargaining process with them, etc. The purchasing strategy must be constantly active.
The procurement strategies must be continuously updated to the changes in the industry: for example, during the 20th century, the textile industry went through significant changes because of the emergence of the ready-to-wear trend and the fast fashion concept (which means that so many collections are launched every season). An example of this would be the brand Chanel, which presents six ready-to-wear collections per year.
H&M is another illustration of a fast-fashion firm, with hires more than 250 designers for the development of its clothes and accessories to be able to continuously change their style.
Consequently, these products are necessarily distributed in a shorter period of time, so the firms need flexible and responsive suppliers who are able to develop a product very fast. In addition, firms should pick suppliers with the lowest prices in order to set a price which is competitive in the market.
Another feature of this type of companies is the fact that they have low factories since they prefer to outsource their production: H&M does not have any own factory but outsources their production for over 800 factories. One of the reasons to the outsourcing process is the reduction in the cost, that’s why many companies outsource their production countries with low protection like China. Another reason to outsource would be the fast process between the production and sale of the products.
Furthermore, it is known that in such fast fashion companies, the products lose value once the collection is over, so this highlights the importance of the role of the purchasing service in ordering the adequate quantity, since the remaining stock can cost a lot to the firm.
So, in conclusion, we’ve seen how the fast fashion industry presents a reactive process from the design to the store and manages a control of the cost by international procurement. By negotiating with suppliers and designers, these firms can lower its prices and accelerate the distribution process.
Business Logistics 