Walkthrough Fashion Business: Episode 2 (English) - Fashion Business Wiki
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On the other hand, The House of Eliott is not a fashion company but an outsource manufacturer. The company has to order the raw materials in advance in order to manufacture the product, and then the company has to produce it. In comparison to a mass-market fashion company, the House of Eliott has to deal with a more complicated process and more complex supply chain, and a higher degree of unpredictability. The House of Eliott's problems arise from the fact that the company purchases the raw materials from independent producers, and tries to control the process by becoming partners of the production partners. However, as a manufacturer, the House of Eliott is not a flexible supplier, and it is difficult for them to adjust their production according to fluctuating market conditions. The process of production control is also expensive and not a guarantee of quality control, especially as the House of Eliott is not capable of managing the production processes themselves; this results in inconsistent quality control. The House of Eliott is forced to follow the first-come-first-served supply process as there is no central warehouse. It is also hard to adapt the manufacturing process, and the House of Eliott has to let the manufactures set their own prices, which is not an efficient way of controlling prices. H&M has also made changes to the supply and manufacturing process, but they are not as comprehensive as those of H&M. One of the reasons why the House of Eliott does not perform well is due to the failure of the company to secure a strategic network and logistics model. H&M has a network of strategic partnerships, with a high degree of coordination between office and production centres; this has allowed H&M to develop new initiatives and take advantage of suppliers' new product developments.
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