H&M’S SUPPLY CHAIN ANALYSIS HOW CAN H&M IMPROVE THEIR SUSTAINABILITY THROUGH CHANGES WITHIN THE SUPPLY CHAIN

• Main Author: Oloan Manihuruk, Shalom
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/87509
• Institution: Institut Teknologi Bandung

This dissertation explores the sustainability of H&M's supply chain, analyzing its practices, challenges, and the effectiveness of its sustainability initiatives. H&M, a leader in the fast fashion industry, operates a supply chain optimized for production and distribution, leveraging outsourcing to low-cost countries. While this model offers advantages in responsiveness and market penetration, it raises significant concerns regarding environmental sustainability and ethical labor practices. The research identifies areas within the supply chain that contribute to its substantial environmental footprint, including high greenhouse gas emissions, excessive water usage, and the production of significant waste. These environmental impacts are increased by the fast fashion model's demand for rapid production cycles and extensive use of non-renewable resources. On the social front, H&M faces challenges related to labor practices in its supply chain. Issues such as unfair wages, poor working conditions, and inadequate labor standards are prevalent, especially in outsourced manufacturing hubs in developing countries. Although H&M has implemented various sustainability initiatives and corporate social responsibility (CSR) measures aimed at addressing these issues, the effectiveness and transparency of these actions remain questionable. The company's efforts are often perceived as inadequate or as instances of greenwashing, where effort is put into appearing sustainable rather than in genuine change. The dissertation provides several recommendations for H&M to enhance its sustainability. These include increasing transparency and accountability through detailed reporting and independent audits, strengthening compliance with ethical standards, investing in sustainable technologies and materials, and improving labor practices. Additionally, H&M is encouraged to reevaluate its production/procurement strategies to align closely with environmental sustainability goals, potentially adopting more internal production controls and initiatives focused on the circular economy. Through this, H&M can better align its operations with the principles of sustainability, ultimately enhancing corporate reputation and contributing positively to sustainability efforts.