M&S Supply Chain Project
M&S Supply Chain Project
M&S Supply Chain Project
By Shikha gupta
Case study No 1
By
By:-
ABSTRACT
Methods of research pertaining to object of study under supply chain management has underwent a
transition. This research looks into the efficiency and effectiveness of the supply chain management of M&S
by understanding its supply chain practices, performances and its operations across the world. This paper
further evaluates and analyses the changes proposed in the supply chain of the company with respect to the
disruptions post Covid-19 and also the effect it had on the sustainability goals of the organization. This paper
attempts at tapping the transition process in the supply chain of the organization and the strategies being
adopted by the company in order to maintain business continuity in the times to come.
M&S was founded in 1884 by Michael Marks and Thomas Spencer in Leeds. M&S currently has 959
stores across the UK, including 615 that only sell food products, and through its television advertising,
asserts the exclusive nature and luxury of its food and beverages. It also offers an online food delivery
service through a joint venture with Ocado.
In 1998, the company became the first British retailer to make a pre-tax profit of over
£1 billion, although subsequently it went into a sudden slump, which took the company and its
stakeholders by surprise. In November 2009, it was announced that Marc Bolland, formerly
of Morrisons, would take over as chief executive from executive chairman Sir Stuart Rose in early 2010;
Rose remained executive chairman until July 2010 and then chairman until January 2011, when he was
replaced by Robert Swannell. In recent years, its clothing sales have fallen whilst food sales have
increased after axing the St. Michael moniker for its own brand. The company also began to sell branded
goods such as Kellogg's Corn Flakes in November 2008.
On 22 May 2018, it was confirmed that over 100 stores will have closed by 2022 in a "radical" plan.
Whether more stores would close was yet to be confirmed.
On 18 August 2020, M&S stated that they were to cut 7,000 jobs over the next three months owing to
the coronavirus pandemic.
On 26 May 2021, the company announced plans to close another 30 shops over the next 10 years as
part of its turnaround plan.
INTRODUCTION:
Marks and Spencer Plc is an international retailer with 718 locations across 34 countries. The group sells
clothing, footwear, gifts, home furnishings and foods under the St. Michael trademark in its chain of 294
stores in the United Kingdom. It is listed in the FTSE 100 index and employs over 75,000 staff. Approximately
half of the group's overseas stores are franchised to local partners. The group also owns the clothing retailer
Brooks Brothers and the Kings Super Markets chain in the United States of America. Marks and Spencer uses
direct mail as a means for marketing products such as home furnishings, flowers and wine. Marks and
Spencer also has a financial services operation providing account cards, personal loans, unit trust
management, life assurance and pensions. Retailing accounted for 96% of fiscal 2000 revenues and financial
services, 4%. For the interim results to September 30th 2000, group profit before tax was £183.4 million
compared to full 1999 figure of £192.8 million. Over the past 18 months there has been some major internal
organizational changes, including a change of Chairman. Both the UK and the international businesses are
controlled through the PLC board. Below this sits the UK Retail Board, which controls the UK retail business
(around 90% of Marks and Spencer customer business). Marks and Spencer UK retail is now made up of
seven business units. These are Women swear, Menswear, Lingerie, Children swear, Beauty, Home and
Foods. The retail business itself is made up of roughly 60% in clothing and 40% in food. The following case
study is focused upon the retailing side of the business.
M&S endorse the SA Partners Lean Business Model that was developed by Professor Peter Hines following
many years of research on how the best companies deliver profitable growth using Lean Thinking. The rest of
this toolkit will act as a guide to the five elements as shown in the adjacent picture. The five elements work
as an integrated system to deliver sustainable, profitable improvement. Many sites have used this framework
to guide them in creating strategies that transform their operational and business perfomance. The five
elements of the Lean Business Model need to be implemented in a systemic way and frequently this means
working on more than one element of the framework at one time.
To ensure that the products get delivered to the customers just in time or to get the products available in stores
beforehand, it is crucial for M&S to choose the cheapest and fastest route plan. The final product manufactured
by the supplier is generally sent to the warehouse in Hamburg, Germany from where it is ensured that the
products are made available in stores but in situations where the demand is design specific, M&S ensures that
the produce is directly transported to the particular location of the country ensuring that it is made available
just in time. M&S does not depend on third party for its logistics and uses its own logistics services in the
name of “M&S International Transportation, Inc.” M &S mainly uses Railways, Waterways and Roadways as
their mode of transportation to deliver the products across the globe, thus making it cost effective as well
(MUÑOZ, 2015). But when there is a surge demand of new trends, the preferred mode of transport is usually
Airways.
Suppliers:
ASIA
a) Bangladesh b) Cambodia c) China d) Hong Kong e) Indonesia f) Myanmar g) Pakistan h) Sri Lanka i) Thailand
j) Vietnam k) South Korea
EUROPE
a) Sweden b) Romania c) Spain d) Portugal e) Poland f) Turkey g) Netherlands h) Italy i) Latvia j) Luxemburg h)
France i) Finland j) Germany k) Greece l) Czech Republic
AFRICA
a) Kenya
GREAT BRITAIN
Firstly, the production produce from suppliers in Asia or Europe are transported through Ship to the main
warehouse in Hamburg, Germany. In case of urgency, airways are preferred over waterways. Although, most
part of the production comes from the Asian suppliers, the goods need to be transported to the main hub in
Hamburg. The goods received in Hamburg are then transported through Rail to the distribution centers in the
specific geographic area. Once the merchandise reaches the distribution centers, they are then sent to the stores
through trucks or rail. The distribution centers are often located nearby to the stores which makes
transportation easier.
IMPACT OF COVID 19 ON FASHION INDUSTRY
Impact of COVID-19 across the clothing sector is completely unprecedented and has been felt acutely by
both retailers and our suppliers. We are very proud to have strong long-term relationships with our
clothing suppliers; in fact, we have worked with over 70% of our supply base for over seven years.
Most importantly, we are managing our supply so that we have a viable business on the other side of this.
We have worked through a plan with our suppliers which is as follows:
For the fashion industry, 2020 was the year in which everything changed. As the coronavirus pandemic sent
shockwaves around the world, the industry suffered its worst year on record with almost three quarters of
listed companies losing money. Consumer behavior shifted, supply chains were disrupted and the year
approached its end with many regions in the grip of a second wave of infections. A turbulent and worrying
year has left us all looking for silver linings — both in life and in business — knowing full well that we will
need to make the most of them in the year ahead.
Indeed, according to McKinsey Global Fashion Index analysis, fashion companies will post approximately a
90 percent decline in economic profit in 2020, after a 4 percent rise in 2019. Given the ongoing uncertainty,
our predictions for industry performance next year are focused on two scenarios.
The first, more optimistic “Earlier Recovery” scenario envisages that global fashion sales will decline by
between 0 and 5 percent in 2021 compared to 2019. This would be predicated on successful virus containment
in multiple geographies and a relatively rapid transition to economic recovery. In this scenario, the industry
would return to 2019 levels of activity by the third quarter of 2022.
Our second, “Later Recovery” scenario would see sales growth decline by 10 to 15 percent over the coming
year compared with 2019. In this case, the virus would continue to wreak havoc despite widespread
containment measures and fashion sales would only revert to 2019 levels in the fourth quarter of 2023.
In either scenario, we expect tough trading conditions to persist next year, in some geographies at least, and for
high levels of bankruptcies, store closures and job cuts to continue. At the same time, the pandemic will
accelerate trends that were in motion prior to the crisis, as shopping shifts to digital and consumers continue to
champion fairness and social justice. Given the extreme jeopardy facing the industry, there is no simple,
standardised playbook for the coming year. Instead, fashion companies must tailor their strategies to fit their
individual priorities, market exposure and capabilities. In other words, deploy your “silver linings
strategy” that takes advantage of bright spots in the proverbial storm.
DELIVERING PLAN A
Find out about our approach to delivering Plan A - our plan for creating long-term sustainable business value
We're committed to helping to build a sustainable future by being a business that enables our customers to
have a positive impact on wellbeing, communities and the planet, through all that we do.
Plan A is a multi-year sustainability transformation plan that has been updated several times (2010, 2014 and
2017) to reflect the evolution of our business and the risks and opportunities that social and environmental
issues pose for us.
The business transformation programme aims to return M&S to sustainable, profitable growth and to deliver
long-term value for all stakeholders. Our priority in 2020/21 has been to embed Plan A into our business
operating model as a family of accountable businesses, putting sustainability into the heart of their commercial
plans. Over the past year we have:
Delivered on our customer promise of trusted value; for example we launched our most sustainable
denim range yet in spring 2021 – finished with 86% less water, kinder chemicals and 100% responsibly
sourced cotton.
Found better solutions for challenges faced by our customers and colleagues; for example through the
collaborative efforts of our colleagues in Food and Retail we delivered a 120% increase in food
redistribution and rolled out a new digital app to all our food stores.
Taken a leadership position on the issues that matter most to our customers, supporting our
commitment to the Ten Principles of the UN Global Compact.
Formed commitments to tackle the biggest sustainability challenges facing business, our society and
our planet.
Alongside this, the business’s focus was rightly on managing the impact of Covid-19 pandemic on colleagues,
customers and communities – particularly the most vulnerable and healthcare workers. We played our part in
feeding the nation, distributing more than 11.8 million meals to those most in need, launched new digital
services such as Sparks Book & Shop to make shopping safer and collectively raised over £8.3m for NHS
Charities Together through our M&S Rainbow sale.
Full information detailing our performance on a range of environmental and social issues is included in our
2021 Plan A report.
Governance
Sustainability is core to the M&S brand and the Plan A framework brings together individual business unit
strategies into a shared programme to engage our customers and enable us to report on performance at Group
level. The CEO has ultimate accountability for sustainability in M&S and the managing directors of the
business have responsibility for setting new performance metrics to drive behavioural change and ensure their
business operates in a more sustainable way. The Executive Committee, as M&S’s senior leadership team with
responsibility for the day-to-day operation of the business, are accountable for the whole programme in
addition to compliance with M&S policies and regulations to help drive change and a more sustainable future
for M&S.
In December 2020, we established a new Board sub-committee on Environmental, Social & Governance
(ESG), chaired by Tamara Ingram, to provide a focus and oversight of Plan A across the business
Listening, learning, responding and working in partnership is an important part of how we do business.
Many Plan A issues are too large or complex for us to tackle alone, so it is vital that we work with others.
M&S is involved in active partnerships globally and locally, including participation and leadership roles within
the Consumer Goods Forum and Business in the Community. We are playing our part in industry-wide
collaborations and during the year we signed up to the British Retail Consortium’s Climate Action Roadmap
and WRAP’s Textiles 2030 alongside our existing support for and WRAP’s Textiles 2030 alongside our
existing support for WRAP’s Courtauld 2025 Commitment.
Find out about our approach to managing sustainability in our clothing and home products
We are restless in our aim to improve things for the better. We work closely with our suppliers to develop high
quality and innovative products that are only available at M&S.
Products
We operate rigorous quality management systems which have been developed with our suppliers. These
operate on a precautionary principle and are supported by a range of on-site audits and product testing.
Suppliers are required to meet a range of quality, safety, environmental and social standards.
M&S has committed to removing plastic microbeads from M&S own brand personal care products.
No own-brand products are manufactured with such microbeads and all products, own-brand and branded, sold
in M&S stores will be free from these microbeads by end of 2017
Since 2012, M&S has been a member of the Sustainable Clothing Action Plan (SCAP), a UK based initiative
with a mission to reduce the use of resources across the clothing industry.
In collaboration with other brands, we have pledged to reduce the impact of the products we sell over their
entire lifecycle. We agreed, along with 10 other brands, to achieve the below targets by 2020:
HUMAN RIGHTS
M&S People Principles Marks & Spencer is committed to driving a sustainable business that is
both commercially successful and socially and environmentally responsible. This includes
providing our employees in the UK and overseas with a safe and healthy working environment
and having an organisational culture which promotes diversity, inclusivity, personal
development and respect. We know it’s our people who make Marks & Spencer successful. We
want people to enjoy coming to work and for the workplace to be free from discrimination,
harassment and victimisation. Employing people in different countries means responding to
different cultural and social norms and different employment law and commercial
considerations. However, regardless of where they work or the job they do, we want everyone
employed by Marks & Spencer to be treated with dignity and respect and have pride in our
brand. In seeking to always ‘do the right thing’, when determining our global principles, we have
been mindful of international standards and benchmarks such as the UN Universal Declaration of
Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, the UN
Guiding Principles on Business and Human Rights, the UN Women’s Empowerment Principles,
the UN Human Right to Water and Sanitation and the UN Global Compact.
Compliance with national law Supporting and respecting internationally recognised human
rights. Find out more about our approach to respecting human rights. Meeting, at least, all
relevant statutory requirements in every country where we have employees. Human Resource
polices Establishing and implementing appropriate policies and procedures which are consistent
with the requirements of local national law, the Company’s values and these People Principles in
every country where M&S has employees. Information about employment Providing our
employees with written and understandable information about their employment conditions and
working arrangements including wages, hours and holidays. Data Privacy As a minimum,
handling all personal information in line with data protection laws. This includes ensuring: all
information held is accurate; only essential data is collected; all personal details are treated with
sensitivity; all documents, systems and devices on which personal details are held are secure and
safe; and data is only stored for as long as necessary before it is securely destroyed/deleted.
Temporary workers’ rights We will provide permanent employment wherever possible. Where
temporary workers (e.g. fixed term contracts or apprenticeship schemes) are employed,
appropriate policies and procedures are in place to ensure their employment relationship (i.e.
non-permanent status) is justified by the nature of the role/work they are undertaking, its likely
duration and safeguard their legal rights. Employee engagement, involvement and participation
Open, clear and honest communication with employees about how the business is doing and
opportunities for people to give feedback through surveys, listening groups, and directly to their
line manager. We believe, real involvement in business objectives depends on good
communication where information, ideas and concerns can be freely exchanged between
everyone – at all levels. Giving our employees a ‘voice’ in the workplace and the right to be
represented. We respect the right for employees to join a trade union (without any fear of
victimisation or discrimination) and the principle of freedom of association and where our
employees are represented by a legally recognised trade union, we respect the principle of
collective bargaining. However, at Marks & Spencer we are committed to direct employee
engagement and participation (through elected employee involvement groups) as we believe that
the people who work for us: have invaluable first-hand knowledge of our business operation;
have the greatest vested interest in our commercial success and know most about what issues
matter to workplace colleagues. Discrimination and Equal Opportunities Treating everyone
equally regardless of age, gender, gender reassignment, colour, ethnic or national origin,
disability, hours of work, nationality, religion or belief, marital or civil partner status,
disfigurement, political opinions or sexual orientation. We treat all colleagues with dignity and
respect and expect colleagues to treat each other and our customers in the same way. It is M&S
policy to promote an environment free from discrimination, harassment, and victimisation where
everyone will receive equal treatment and where all decisions relating to employment are
objective, free from bias, and based solely on work criteria and individual merit. In every set of
circumstances, we aim to find the ‘best fit’ between personal requirements and business needs.
M&S respects cultural and individual diversity and promotes inclusivity which includes seeking
opportunities to support disadvantaged people into work. M&S believes that everyone counts
and should always be treated with decency and honesty. M&S supports working parents and
others who may have caring responsibilities by providing, where possible, opportunities to work
flexibly and as a minimum, meets all local legal requirements in respect of maternity, paternity,
parental leave and special leave arrangements.
Harassment and abuse Creating a positive work environment free from all forms of bullying and
harassment, where all our employees, customers, contractors, agency workers and suppliers have
the right to be always treated with decency and respect. M&S has zero tolerance towards all
forms of bullying and harassment. We recognise the consequences of such actions can be
harmful, subjecting individuals and groups to fear, stress and anxiety, and placing an unwelcome
strain on an individual’s professional and personal life. Disciplinary procedures Ensuring that all
employees are aware of the standards of performance and behaviour they are expected to achieve
and having clear and fair processes in place to manage any misconduct, poor attendance and
performance issues with a focus on supporting improvement. Workplace grievances Transparent
and fair procedures for employees to raise concerns as we appreciate that there may be times
when people have a problem or complaint about something to do with work. We want everyone
to feel they can raise any legitimate grievances or issues without fear and in confidence. This
includes encouraging informal resolution and establishing appropriate grievance mechanisms
with the aim of everyone working together to find an agreeable solution. Healthy and safe
working conditions Providing safe, clean and healthy working conditions for all employees. This
includes all aspects of work accommodation and working conditions: from access to clean toilet
facilities which respect worker dignity, to promoting and supporting well-being initiatives aimed
at improving and protecting the mental and physical health of our workforce. This commitment
includes taking adequate steps to prevent injury and accidents; providing appropriate protective
equipment and suitable accommodation and facilities; first aid assistance; and having in place a
comprehensive framework of supporting systems, processes, risk assessments and training.
Reward Regularly reviewing our reward and benefit arrangements to ensure they are attracting
and retaining the talent we need; remain objective and free from bias or discrimination including
meeting our equal pay obligations for men and women working in the same jobs; and are at least
meeting any legal minimum standards. We seek to encourage and recognise business and
individual performance and our approach includes considering appropriate prevailing industry
norms and local economic factors. Regardless of where they work in the world, our employees
are paid regularly and on time. Only authorised or legally allowed deductions from wages are
made and all owed salary is paid when, for whatever reason, anyone leaves M&S employment.
Working Hours Ensuring that the working hours of all our employees comply with national laws
or benchmark industry standards or relevant international standards. This includes making sure
everyone has appropriate rest breaks and time off work. Any overtime above contractual
requirements is voluntary. The total hours worked (including overtime) in any week must not
regularly exceed 60 hours in a single week. Working hours may exceed 60 hours in a single
week only in exceptional circumstances where any of the following are met: this is allowed by
national law; this is allowed by a collective agreement freely negotiated with a workers’
organisation representing a significant portion of the workforce; appropriate safeguards are taken
to protect the worker’s health and safety; and exceptional circumstances apply such as seasonal
work, accidents or emergencies. Bribery and corruption Doing the right thing, the right way. Our
Code of Ethics and Behaviours outlines the standards and behaviours that M&S upholds as a
company, to ensure that the highest standards of honesty and integrity are always maintained.
This includes operating a zero-tolerance approach to the making or receiving of bribes or corrupt
payments, in any form. This applies to all employees or anyone else acting on M&S’s behalf,
anywhere in the world. Agency/indirectly employed workers Respecting the human rights,
sustainability and decent working conditions of all agency and indirectly employed workers who
are supporting the M&S business. M&S has a detailed set of Global Sourcing Principles which
sets the high standards it expects from all its suppliers and the processes and systems M&S
expects them to implement to protect their workers, the environment, communities and other
right holders. Right to work Ensuring that all employees have the right to work legally. Forced
labour Ensuring that all M&S employees work for the company on a voluntary basis, and not
under threat of any penalty or sanctions. This includes respecting the right of employees to
terminate their employment after reasonable notice and to receive all owed salary.
Child labour Not employing anyone younger than: i) The legal minimum age for employment ii)
The age of completion of compulsory education (whichever is higher). Regardless of any legal
obligations, M&S will never employ anyone under the age of 15 or under 18 years of age if night
work is involved or in conditions which might compromise their health, safety or mental or
moral wellbeing. Reorganisation/restructuring Meeting all consultation requirements with
employees and/or their elected representatives as appropriate, when the Company is considering
any restructuring/reorganisation or closure plans. This includes considering, prior to
implementation, any viable alternative options or ideas which are proposed to mitigate the
impact on the workforce and meeting all local legal and contractual requirements. Training and
development Providing training and development opportunities which support personal and
business performance. M&S wants its employees (like its business) to ‘grow and prosper’.
Continuous improvement Continuous improvement is important to M&S. Reviewing the
aspirations of our workforce (including potential employees), customers and other key
stakeholders alongside our performance against our commitments is a core part of our approach.
Highlights of sustainability:
Plan A is our way to help build a sustainable future by being a business that enables our customers to
have a positive impact on wellbeing, communities and the planet through all that we do.
DELIVERING PLAN A
BUSINESS WIDE
CLOTHING & HOME
FOOD & HOUSEHOLD
PROPERTY & CONSTRUCTION
ACCESSIBILITY
PEOPLE
COMMUNITY ENGAGEMENT
QUICK READS
ANTI-BRIBERY AND CORRUPTION POLICY FOR M&S BUSINESS PARTNERS