SECTION A [100 Marks] Read the case study below and answer the questions that follow. Hennes & Mauritz (H&M): High Cost

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SECTION A [100 Marks] Read the case study below and answer thequestions that follow. Hennes & Mauritz (H&M): High Cost ofFast Fashion Sweden-based Hennes and Mauritz (H&M), one of theleading fast-fashion retailers in the world, was staring at anuncertain future in 2018. As of November 2017, the company hadunsold stock worth US$ 4.3 billion. While the CEO, Karl-JohanPersson, said that the problem was due to decreasing traffic to thephysical stores and the growing impact of online retailers,analysts were of the view that it was due to H&M’s weak supplychain, which could not keep up with more nimble competitors likeZara. H&M designed the clothes in-house, but it did not own anyproduction facilities and outsourced its manufacturing to factorieslocated in Asia to reduce costs. It took about three weeks for theclothes to be designed, made, and shipped to stores across theworld. Competitors like Zara, however, finished this whole processwithin a span of ten days to two weeks. There were exclusivelyonline retailers like ASOS which had short supply chains. WithH&M’s products not able to keep up with customers’expectations, inventory started to pile up. The company did notmake any major changes to its supply chain for over two decades,and continued to produce in Asia without paying any attention tothe changing trends in the fast fashion industry. Users said thatthe offerings from H&M had become dull and unfashionable. Thiswas because H&M designed 80% of its clothes before the seasonand only 20% during the season. As the clothes were not attractive,they remained unsold, leading to a build-up of inventory. In thefast-fashion era, these clothes went out of fashion within a fewweeks, and H&M was unable to sell them. This only added to itsinventory. H&M’s supply chain was unable to react to the unsoldstocks, and it continued to replenish stocks with styles that werenot always trendy. It also started facing competition from onlineretailers who were extremely quick in introducing new styles andfashions. Though H&M went online in the late 1990s itself, itdid not do much to develop its e-commerce capabilities. As aresult, the company’s unsold inventory swelled to 20% of its totalsales. H&M resorted to markdowns, which adversely impacted itsprofits. The inventory problem-plagued it for seven quarters, andthe company appeared to be caught in a vicious circle of low sales,markdowns, and excess inventory. To address these issues, thecompany went in for an overhaul of its supply chain. But the newsupply chain led to more problems as the merchandise could notreach the stores on time. It again went in for a change of thesupply chain and also the design process to include analytics tounderstand demand. It also automated the warehouses and logisticscentres. The company announced investments in artificialintelligence, RFID, and omnichannel programs. H&M thenannounced a transformation that was guided by three action areas –be restless around the core; invest in enablers – new technologyand ways of working, and drive growth – both traditional and new.It remained to be seen whether the supply chain transformationwould help the company regain the glory it had lost. Source: Hennes& Mauritz (H&M): High Cost of Fast Fashion - The CaseCentre Answer ALL the questions in this section. Question 1 (20Marks) Integration, operations, purchasing, and distribution arethe four primary components of supply chain management. Each ofthese pillars is reliant on the others to provide a smoothtransition from plan to completion at the lowest possible cost.Outline each of the four aspects and illustrate your answer withexamples from the text. Question 2 (20 Marks) Foreign vendors areadded to a company's supply chain for a variety of reasons.However, the fundamental motivation for utilising an internationalprovider is because that source is thought to offer better valuethan a domestic supplier. Explain ANY FOUR (4) reasons for globalsourcing and make reference to the case study. Question 3 (20Marks) Discuss the various forms of inventory costs and useexamples from the article to illustrate your point. Question 4 (20Marks) Identify and describe ANY FOUR (4) external factors todirect distribution while making reference to the article tosupport your answer. Question 5 (20 Marks) The key processes andmethods for integrating and managing process links among supplychain partners will vary depending on each firm's internalstructure, market conditions, the degree to which functional silosexist in any trading partners, and the nature of existingrelationships within each supply chain. Discuss ANY FOUR (4)important supply chain processes and provide examples from the casestudy.