This document provides a case study analysis of Zara's agile supply chain. It summarizes that Zara designs over 40,000 items per year but only produces around 10,000 based on feedback from stores. Zara is able to replenish stores twice a week on average due to its efficient supply chain and proximity to factories in Europe. The constant feedback loop between stores and designers allows Zara to quickly adapt to changing fashion trends and demand. Zara's agile supply chain is a key factor in its success competing in the fast fashion industry.
ZARA Case Study: Role of Supply chain in organizational Successsadia butt
This document discusses the supply chain of Zara, a Spanish clothing retailer known for its fast fashion model. It outlines Zara's vertically integrated supply chain that allows it to design, manufacture, and distribute clothing in as little as 2-3 weeks. Key factors in Zara's supply chain success include vertical integration, use of information technologies to gain customer insights, and shorter lead times enabled by local sourcing and production in small batches.
Zara is a large Spanish clothing retailer known for its rapid fashion production model. It changes designs every 2 weeks compared to competitors' 2 months. Zara uses agents to scout trends and sends sketches to factories within 6 hours for production. Its infrastructure allows finishing goods to reach stores in 4-5 weeks. This rapid supply chain and production flexibility allows Zara to meet constantly changing fashion demands.
Zara is a Spanish brand of clothing founded by the visionary Amancio Gaona and Rosalina Mera at 1975. It is one of the major selling brands of one of the biggest fashion retailer ‘INDITEX’. Zara is now available in 86 countries with total of 1,763 stores worldwide. In 1975 INDITEX established Zara’s 1st store in downtown A Coruna, Spain. Zara offers fashionable designs for men, women, and kids.
Supply Chain Management of Zara (Case Study)Neha Chauhan
This document provides an overview of the Spanish apparel company Inditex and its flagship brand Zara. It discusses Zara's history and founding, Inditex's financial performance, Zara's unique business model centered around rapid design, production and distribution, and Zara's positioning within the global apparel industry. Key aspects of Zara's model include in-house design teams that produce new collections bi-weekly, local Spanish and Portuguese production facilities allowing for quick fulfillment, and a vertically integrated supply chain.
This document discusses Zara's supply chain and how it contributes to the company's success. It provides details on Zara's vertically integrated supply chain model, which allows it to bring designs to stores in just 2-3 weeks compared to the industry average of 6-9 months. Key aspects of Zara's supply chain include local sourcing, fast production times, mass customization, and using IT to share information. This vertical integration model helps Zara increase revenue through more fashionable and scarce products, while decreasing costs through factors like lower transportation and inventory costs.
For ZARA stores to be able to offer cutting edge fashion at affordable prices requires the firm to exert a strong influence over almost the entire garment supply chain.
This document provides an overview of Zara's value chain management strategies. It discusses how Zara achieves vertical integration from sourcing materials to manufacturing 60% of products in-house. Zara's "fast fashion" model allows it to adapt designs, produce, distribute, and stock new clothing in stores within 2 weeks. Through just-in-time production, inventory management that eliminates deadstock, and a centralized logistics network, Zara is able to respond rapidly to fashion trends. Its strengths include a fast delivery cycle, brand image, low-cost supply chain, and ability to capture trends.
ZARA is a Spanish clothing brand owned by Inditex that pioneered fast fashion. ZARA's business model emphasizes vertical integration, producing clothing in small batches close to stores to facilitate quick response to trends. Stores provide frequent feedback to help designers continuously adapt products. About half of materials and 40% of products are manufactured internally. Distribution centers use advanced tracking to deliver to stores within 1-2 days in Europe and 2-4 days outside Europe. ZARA's approach reduces risks from unsold inventory compared to competitors. Its international growth follows an "oil stain" pattern entering culturally similar markets with company-owned stores.
ZARA Case Study: Role of Supply chain in organizational Successsadia butt
This document discusses the supply chain of Zara, a Spanish clothing retailer known for its fast fashion model. It outlines Zara's vertically integrated supply chain that allows it to design, manufacture, and distribute clothing in as little as 2-3 weeks. Key factors in Zara's supply chain success include vertical integration, use of information technologies to gain customer insights, and shorter lead times enabled by local sourcing and production in small batches.
Zara is a large Spanish clothing retailer known for its rapid fashion production model. It changes designs every 2 weeks compared to competitors' 2 months. Zara uses agents to scout trends and sends sketches to factories within 6 hours for production. Its infrastructure allows finishing goods to reach stores in 4-5 weeks. This rapid supply chain and production flexibility allows Zara to meet constantly changing fashion demands.
Zara is a Spanish brand of clothing founded by the visionary Amancio Gaona and Rosalina Mera at 1975. It is one of the major selling brands of one of the biggest fashion retailer ‘INDITEX’. Zara is now available in 86 countries with total of 1,763 stores worldwide. In 1975 INDITEX established Zara’s 1st store in downtown A Coruna, Spain. Zara offers fashionable designs for men, women, and kids.
Supply Chain Management of Zara (Case Study)Neha Chauhan
This document provides an overview of the Spanish apparel company Inditex and its flagship brand Zara. It discusses Zara's history and founding, Inditex's financial performance, Zara's unique business model centered around rapid design, production and distribution, and Zara's positioning within the global apparel industry. Key aspects of Zara's model include in-house design teams that produce new collections bi-weekly, local Spanish and Portuguese production facilities allowing for quick fulfillment, and a vertically integrated supply chain.
This document discusses Zara's supply chain and how it contributes to the company's success. It provides details on Zara's vertically integrated supply chain model, which allows it to bring designs to stores in just 2-3 weeks compared to the industry average of 6-9 months. Key aspects of Zara's supply chain include local sourcing, fast production times, mass customization, and using IT to share information. This vertical integration model helps Zara increase revenue through more fashionable and scarce products, while decreasing costs through factors like lower transportation and inventory costs.
For ZARA stores to be able to offer cutting edge fashion at affordable prices requires the firm to exert a strong influence over almost the entire garment supply chain.
This document provides an overview of Zara's value chain management strategies. It discusses how Zara achieves vertical integration from sourcing materials to manufacturing 60% of products in-house. Zara's "fast fashion" model allows it to adapt designs, produce, distribute, and stock new clothing in stores within 2 weeks. Through just-in-time production, inventory management that eliminates deadstock, and a centralized logistics network, Zara is able to respond rapidly to fashion trends. Its strengths include a fast delivery cycle, brand image, low-cost supply chain, and ability to capture trends.
ZARA is a Spanish clothing brand owned by Inditex that pioneered fast fashion. ZARA's business model emphasizes vertical integration, producing clothing in small batches close to stores to facilitate quick response to trends. Stores provide frequent feedback to help designers continuously adapt products. About half of materials and 40% of products are manufactured internally. Distribution centers use advanced tracking to deliver to stores within 1-2 days in Europe and 2-4 days outside Europe. ZARA's approach reduces risks from unsold inventory compared to competitors. Its international growth follows an "oil stain" pattern entering culturally similar markets with company-owned stores.
Zara is a highly successful fashion retailer known for its fast fashion model. It introduces new designs two weeks after seeing them on runways rather than the industry standard of six months. Zara achieves this through an integrated operation strategy that allows for quick design, production, and distribution. Stores provide immediate customer feedback that designers use to create new items. Factories located in Spain enable rapid production to meet changing demand. An efficient supply chain distributes goods to stores within 24 hours in Europe. This strategy of speed, affordability, and variety has made Zara one of the world's largest clothing retailers.
ZARA's external and internal enviroment. This presentation covers the main characteristics of ZARA, a general view of fast fashion indystry, Porters' Five Forces Analysis, competitors' external environment as well as a complete internal analysis regarding:competences, capabilities, resources, competitive advantage,value chain and outsourcing.
Zara is by far the largest, most profitable and most internationalized fashion retail chain. Zara's success is based on a business system that depends on vertical integration, in-house production, quick response, one centralized distribution centre and low advertising cost. Zara's information system allows it to gather customer feedback and sales data in real-time to quickly design, produce, and distribute new fashion items to stores every few weeks. This rapid inventory turnover and frequent product refreshment is key to Zara maintaining its competitive edge over rivals in the fast fashion industry.
This document provides information about Zara, the largest clothing company owned by the Spanish fashion group Inditex. It discusses Zara's business model, strategies, and supply chain management. Zara aims to continuously innovate and provide new, affordable designs made from quality materials to satisfy customer desires. Through its fast fashion approach, Zara is able to introduce new designs and get them to stores within weeks to stay on top of the latest trends. It discusses how Zara's vertical integration and efficient global supply chain allows it to achieve this competitive advantage over other retailers.
Zara has achieved great success through its vertically integrated supply chain model. It is able to design, produce, and distribute new clothing collections to stores within 2-3 weeks, far faster than competitors' 6-9 month timeline. Key aspects of Zara's supply chain include 200 in-house fashion designers, local fabric sourcing and production, and overnight trucking of products to European stores. This speed and flexibility allows Zara to respond quickly to fashion trends and reduces unsold inventory, contributing to higher profit margins compared to other retailers.
Zara is a Spanish clothing and accessories retailer founded in 1975 that uses a business model focused on quick response and efficient supply chain management. It operates over 2,000 stores worldwide and is known for delivering fashionable and high-quality clothing at affordable prices. Zara achieves this through a hybrid business strategy focused on short lead times, producing lower quantities of more styles, and reacting quickly to fashion trends rather than relying on forecasts. Its vertically integrated supply chain allows it to design, manufacture, and distribute products to stores in under 4 weeks. This rapid response capability and continual freshness of offerings has enabled Zara to gain a competitive advantage over rivals.
1) Porter's five forces analysis finds the global apparel industry has medium threat of new entrants due to modest growth and low capital requirements, but high bargaining power of customers and suppliers who face few switching costs. Rivalry is also high due to frequent price changes and ease of switching brands.
2) Zara's value chain emphasizes rapid design, production, and distribution through internal suppliers and owned factories. New collections are delivered to stores every two weeks to quickly reflect changing fashion trends. Marketing relies on brand reputation and store displays rather than advertising.
3) Zara's infrastructure allows for fast global coordination between managers, designers, and suppliers. Over half of its 60,000 young, female workforce is based
The project is a study on how Vertical Integration as a supply chain strategy has worked for Zara in emerging as a fast fashion system. It also focuses on analyzing the competitive advantages and the challenges of implementing Vertical Integration for Zara.
This document provides information about the fashion company Zara. It discusses Zara's business model and strategies. Zara is known for its fast fashion approach of quickly moving new trends into stores. The document outlines Zara's mission to provide fast, affordable, and fashionable clothing. It also discusses Zara's supply chain, use of technology, global presence, and competitive advantages like its quick response system and vertically integrated production process.
The presentation has been prepared by the students of MFM(Master of Fashion Management), NIFT, Delhi as a part of the study on the Inventory Management of ZARA.
1) Zara has developed a super-responsive supply chain that can design, produce, and deliver new garments to stores worldwide in just 15 days.
2) Zara's supply chain success is built on three principles - closing the communication loop between all parts of the chain, sticking to a regular rhythm across design, production, and distribution, and leveraging owned capital assets to increase flexibility.
3) These principles reinforce each other to optimize the entire supply chain and allow Zara to sustain a fast fashion model that keeps customers engaged with frequent new deliveries to stores.
Zara started as a small company making women's clothing in Spain in 1963. In 1975, after a cancelled order, Zara opened its first retail store to sell excess inventory, learning the importance of integrating manufacturing and retail. Since then, Zara has grown to over 1750 stores worldwide selling affordable yet stylish clothing. Zara's success is due to its unique fashion designs, real-world prices, and collaborative digital networks linking it to suppliers and customers. It can develop new products and get them to stores within just two weeks, launching around 10,000 designs annually.
Zara is one of the world's most successful fashion retailers operating in over 90 countries. It is known for its ability to design and produce new fashion items in as little as two weeks and get them to stores. The presentation provides an overview of Zara's history, business model, products, manufacturing, distribution network, competitors, and factors for its continued success. It concludes that Zara has transformed from a local Spanish brand into a truly global brand through its integrated business model and supply chain that allows it to quickly adapt to shifting fashion trends and consumer demands.
This document provides information about Zara, the largest clothing company owned by the Spanish fashion group Inditex. It discusses Zara's business model, strategies, and supply chain management approach. Zara aims to continuously innovate and provide new, affordable designs made from quality materials to satisfy customer desires. Through its fast fashion model, Zara is able to design, produce, and distribute new collections to stores within weeks, allowing it to stay on top of the latest trends. Zara has over 1,900 stores globally and is a leader in the fast fashion industry due to its ability to quickly replicate designs at low prices.
Zara's value chain is highly integrated and controlled. It sources materials and produces about half of products in Spain and Europe to allow for quick design changes. Products are shipped to stores within 24 hours in Europe. Store managers have autonomy to make replenishment orders based on sales data. Zara uses minimal marketing and focuses on window displays. Its competitive advantage lies in its ability to design, produce, and deliver fashion trends rapidly and at scale through its vertically integrated system.
This document provides an analysis of Zara, including its target market, value proposition, competitors, and strategies. It discusses Zara's strengths in fast fashion and affordable prices for young, fashion-conscious customers. The analysis examines Zara's marketplace, including Turkey's economic and demographic trends. It finds opportunities in global expansion and threats from new entrants. Finally, the document evaluates Zara's cost leadership strategy and recommends collaborating with local firms and influencers to respond quickly to fashion trends.
The document outlines Zara's fast fashion business model and supply chain operations, which focuses on rapid design, production, and distribution of new fashion items to stores within weeks in order to stay on top of constantly changing trends, allowing Zara to maintain its competitive advantage over rivals with shorter inventory turnovers and product lifecycles. Zara's centralized operations and extensive use of data and technology allows it to quickly respond to demand changes through flexible procurement, production planning, and high-velocity logistics. This responsive supply chain model has supported Zara's global expansion to over 1700 stores in 78 countries while continually renewing its inventory with around 11,
Case study - Zara International Retail ExpansionNeha Randhawa
Zara is considering expanding internationally and must decide which new market to enter. It is analyzing entering the Chinese market starting with Shanghai. China represents a large opportunity due to its growing population and rising disposable incomes. Fast fashion is popular in China and production costs are lower there and in Bangladesh where Zara could source garments. The recommendation is for Zara to set up a joint venture in Shanghai, use an "oil stain" approach to expansion, source from Bangladesh, and establish a new distribution center in China to enable its expansion in Asia over three years.
Zara is a fashion retailer owned by Inditex, one of the largest fashion groups in the world. Zara opened its first store in 1975 in Spain and has since expanded to over 2,000 stores globally. Inditex controls most of Zara's supply chain, with around 50% of products manufactured in Spain and Europe and the rest in Asia and Africa. Products are shipped to logistics centers in Spain and then distributed to stores within 24 hours in Europe and 40 hours elsewhere. Zara's unique approach is to produce trendy designs in small batches within a few weeks and refresh store inventory monthly, creating urgency for customers to purchase before items sell out.
Zara is a Spanish clothing retailer known for its rapid production of new designs to match emerging fashion trends. It operates over 1,700 stores worldwide and launches around 10,000 new designs each year, getting products to stores in just two weeks compared to the industry average of six months. Zara's supply chain and production model allows it to be more responsive to trends and offer a wider variety of fashionable products at affordable prices. It has experienced rapid international expansion and growth over the past few decades to become one of the largest and most profitable clothing retailers globally.
Zara has built a highly efficient supply chain and logistics system that allows it to bring new fashion designs from concept to stores in just 2 weeks. It uses a vertically integrated model where designs are created based on data from stores. Approved designs are quickly manufactured in nearby factories before being shipped to stores twice per week. Zara is proposing to expand this efficient model to the US by opening local distribution centers to manufacture and distribute to North American stores within 24 hours, reducing shipping costs and improving fashionability for American customers. While outsourcing logistics could improve efficiency, it risks losing control over their specialized system which is key to Zara's success.
Zara is a highly successful fashion retailer known for its fast fashion model. It introduces new designs two weeks after seeing them on runways rather than the industry standard of six months. Zara achieves this through an integrated operation strategy that allows for quick design, production, and distribution. Stores provide immediate customer feedback that designers use to create new items. Factories located in Spain enable rapid production to meet changing demand. An efficient supply chain distributes goods to stores within 24 hours in Europe. This strategy of speed, affordability, and variety has made Zara one of the world's largest clothing retailers.
ZARA's external and internal enviroment. This presentation covers the main characteristics of ZARA, a general view of fast fashion indystry, Porters' Five Forces Analysis, competitors' external environment as well as a complete internal analysis regarding:competences, capabilities, resources, competitive advantage,value chain and outsourcing.
Zara is by far the largest, most profitable and most internationalized fashion retail chain. Zara's success is based on a business system that depends on vertical integration, in-house production, quick response, one centralized distribution centre and low advertising cost. Zara's information system allows it to gather customer feedback and sales data in real-time to quickly design, produce, and distribute new fashion items to stores every few weeks. This rapid inventory turnover and frequent product refreshment is key to Zara maintaining its competitive edge over rivals in the fast fashion industry.
This document provides information about Zara, the largest clothing company owned by the Spanish fashion group Inditex. It discusses Zara's business model, strategies, and supply chain management. Zara aims to continuously innovate and provide new, affordable designs made from quality materials to satisfy customer desires. Through its fast fashion approach, Zara is able to introduce new designs and get them to stores within weeks to stay on top of the latest trends. It discusses how Zara's vertical integration and efficient global supply chain allows it to achieve this competitive advantage over other retailers.
Zara has achieved great success through its vertically integrated supply chain model. It is able to design, produce, and distribute new clothing collections to stores within 2-3 weeks, far faster than competitors' 6-9 month timeline. Key aspects of Zara's supply chain include 200 in-house fashion designers, local fabric sourcing and production, and overnight trucking of products to European stores. This speed and flexibility allows Zara to respond quickly to fashion trends and reduces unsold inventory, contributing to higher profit margins compared to other retailers.
Zara is a Spanish clothing and accessories retailer founded in 1975 that uses a business model focused on quick response and efficient supply chain management. It operates over 2,000 stores worldwide and is known for delivering fashionable and high-quality clothing at affordable prices. Zara achieves this through a hybrid business strategy focused on short lead times, producing lower quantities of more styles, and reacting quickly to fashion trends rather than relying on forecasts. Its vertically integrated supply chain allows it to design, manufacture, and distribute products to stores in under 4 weeks. This rapid response capability and continual freshness of offerings has enabled Zara to gain a competitive advantage over rivals.
1) Porter's five forces analysis finds the global apparel industry has medium threat of new entrants due to modest growth and low capital requirements, but high bargaining power of customers and suppliers who face few switching costs. Rivalry is also high due to frequent price changes and ease of switching brands.
2) Zara's value chain emphasizes rapid design, production, and distribution through internal suppliers and owned factories. New collections are delivered to stores every two weeks to quickly reflect changing fashion trends. Marketing relies on brand reputation and store displays rather than advertising.
3) Zara's infrastructure allows for fast global coordination between managers, designers, and suppliers. Over half of its 60,000 young, female workforce is based
The project is a study on how Vertical Integration as a supply chain strategy has worked for Zara in emerging as a fast fashion system. It also focuses on analyzing the competitive advantages and the challenges of implementing Vertical Integration for Zara.
This document provides information about the fashion company Zara. It discusses Zara's business model and strategies. Zara is known for its fast fashion approach of quickly moving new trends into stores. The document outlines Zara's mission to provide fast, affordable, and fashionable clothing. It also discusses Zara's supply chain, use of technology, global presence, and competitive advantages like its quick response system and vertically integrated production process.
The presentation has been prepared by the students of MFM(Master of Fashion Management), NIFT, Delhi as a part of the study on the Inventory Management of ZARA.
1) Zara has developed a super-responsive supply chain that can design, produce, and deliver new garments to stores worldwide in just 15 days.
2) Zara's supply chain success is built on three principles - closing the communication loop between all parts of the chain, sticking to a regular rhythm across design, production, and distribution, and leveraging owned capital assets to increase flexibility.
3) These principles reinforce each other to optimize the entire supply chain and allow Zara to sustain a fast fashion model that keeps customers engaged with frequent new deliveries to stores.
Zara started as a small company making women's clothing in Spain in 1963. In 1975, after a cancelled order, Zara opened its first retail store to sell excess inventory, learning the importance of integrating manufacturing and retail. Since then, Zara has grown to over 1750 stores worldwide selling affordable yet stylish clothing. Zara's success is due to its unique fashion designs, real-world prices, and collaborative digital networks linking it to suppliers and customers. It can develop new products and get them to stores within just two weeks, launching around 10,000 designs annually.
Zara is one of the world's most successful fashion retailers operating in over 90 countries. It is known for its ability to design and produce new fashion items in as little as two weeks and get them to stores. The presentation provides an overview of Zara's history, business model, products, manufacturing, distribution network, competitors, and factors for its continued success. It concludes that Zara has transformed from a local Spanish brand into a truly global brand through its integrated business model and supply chain that allows it to quickly adapt to shifting fashion trends and consumer demands.
This document provides information about Zara, the largest clothing company owned by the Spanish fashion group Inditex. It discusses Zara's business model, strategies, and supply chain management approach. Zara aims to continuously innovate and provide new, affordable designs made from quality materials to satisfy customer desires. Through its fast fashion model, Zara is able to design, produce, and distribute new collections to stores within weeks, allowing it to stay on top of the latest trends. Zara has over 1,900 stores globally and is a leader in the fast fashion industry due to its ability to quickly replicate designs at low prices.
Zara's value chain is highly integrated and controlled. It sources materials and produces about half of products in Spain and Europe to allow for quick design changes. Products are shipped to stores within 24 hours in Europe. Store managers have autonomy to make replenishment orders based on sales data. Zara uses minimal marketing and focuses on window displays. Its competitive advantage lies in its ability to design, produce, and deliver fashion trends rapidly and at scale through its vertically integrated system.
This document provides an analysis of Zara, including its target market, value proposition, competitors, and strategies. It discusses Zara's strengths in fast fashion and affordable prices for young, fashion-conscious customers. The analysis examines Zara's marketplace, including Turkey's economic and demographic trends. It finds opportunities in global expansion and threats from new entrants. Finally, the document evaluates Zara's cost leadership strategy and recommends collaborating with local firms and influencers to respond quickly to fashion trends.
The document outlines Zara's fast fashion business model and supply chain operations, which focuses on rapid design, production, and distribution of new fashion items to stores within weeks in order to stay on top of constantly changing trends, allowing Zara to maintain its competitive advantage over rivals with shorter inventory turnovers and product lifecycles. Zara's centralized operations and extensive use of data and technology allows it to quickly respond to demand changes through flexible procurement, production planning, and high-velocity logistics. This responsive supply chain model has supported Zara's global expansion to over 1700 stores in 78 countries while continually renewing its inventory with around 11,
Case study - Zara International Retail ExpansionNeha Randhawa
Zara is considering expanding internationally and must decide which new market to enter. It is analyzing entering the Chinese market starting with Shanghai. China represents a large opportunity due to its growing population and rising disposable incomes. Fast fashion is popular in China and production costs are lower there and in Bangladesh where Zara could source garments. The recommendation is for Zara to set up a joint venture in Shanghai, use an "oil stain" approach to expansion, source from Bangladesh, and establish a new distribution center in China to enable its expansion in Asia over three years.
Zara is a fashion retailer owned by Inditex, one of the largest fashion groups in the world. Zara opened its first store in 1975 in Spain and has since expanded to over 2,000 stores globally. Inditex controls most of Zara's supply chain, with around 50% of products manufactured in Spain and Europe and the rest in Asia and Africa. Products are shipped to logistics centers in Spain and then distributed to stores within 24 hours in Europe and 40 hours elsewhere. Zara's unique approach is to produce trendy designs in small batches within a few weeks and refresh store inventory monthly, creating urgency for customers to purchase before items sell out.
Zara is a Spanish clothing retailer known for its rapid production of new designs to match emerging fashion trends. It operates over 1,700 stores worldwide and launches around 10,000 new designs each year, getting products to stores in just two weeks compared to the industry average of six months. Zara's supply chain and production model allows it to be more responsive to trends and offer a wider variety of fashionable products at affordable prices. It has experienced rapid international expansion and growth over the past few decades to become one of the largest and most profitable clothing retailers globally.
Zara has built a highly efficient supply chain and logistics system that allows it to bring new fashion designs from concept to stores in just 2 weeks. It uses a vertically integrated model where designs are created based on data from stores. Approved designs are quickly manufactured in nearby factories before being shipped to stores twice per week. Zara is proposing to expand this efficient model to the US by opening local distribution centers to manufacture and distribute to North American stores within 24 hours, reducing shipping costs and improving fashionability for American customers. While outsourcing logistics could improve efficiency, it risks losing control over their specialized system which is key to Zara's success.
Managing Supply Chain of Zara. It defines what a supply chain is and outlines the steps that makes up the chain. It Explain the factors that affect its design and understands the processes of designing and managing the supply chain. It outline the benefits of effectively managing supply chains
The document discusses Zara's business model and IT systems. It identifies that Zara uses a just-in-time production and delivery model to bring new fashion items to stores twice weekly. Zara's IT systems currently use outdated technologies like DOS for point-of-sale systems. The document evaluates options to modernize Zara's IT infrastructure, including fully externalizing the project or having internal staff work with external partners. It recommends modernizing systems using a UNIX solution, as this provides the lowest annual fees over 5 years while meeting Zara's needs for improved in-store and headquarters connectivity.
Zara is a clothing retailer that uses modern technology in its marketing research and supply chain to quickly deliver fashionable designs at lower prices. It collects frequent customer feedback and uses IT to closely monitor trends. This allows Zara to make production decisions quickly and produce small quantities of many styles. As a result, Zara is able to deliver new fashion designs about twice a month while competitors take 3-5 months. This rapid turnover keeps customers engaged with frequent store visits and purchases.
This document discusses Zara and its parent company Inditex. It provides an overview of Zara's history and Inditex's global presence. It then analyzes Zara's supply chain management practices, including its just-in-time production and inventory system and centralized distribution network. A SWOT analysis of Zara is also presented. The document concludes by suggesting regional centralized distribution centers as a way to improve Zara's operations.
- Zara is a major clothing brand owned by Spanish company Inditex that operates a unique fast fashion business model. Unlike other brands, Zara produces small quantities of clothing and replenishes stores frequently based on real-time customer feedback.
- Zara maintains control over its entire supply chain from design to manufacturing to distribution. This vertical integration allows it to produce and deliver new designs to stores within 2 weeks.
- For the US market, Zara should start with an aggressive online presence to test demand before opening physical stores focused on major coastal cities. An initial online-focused strategy allows it to learn customer preferences at lower cost and risk.
How Zara Spent $0 in Advertising To Become The World's #1 Fashion RetailerNitant Narang
Unlike competing brands, Zara does no advertising, it scarcely appears on billboards; its collections do not figure in fashion shows; neither does it lobby for Vogue’s glossy pages, nor does it associate itself with any celebrities or high-profile fashion designers. Yet, despite bending every rule and defying all the conventions within the fashion industry, Zara, with a revenue of $15.9 Billion (2016) and 2,100 stores across the world, is one of the most valuable companies in the world.
How? Read This eBook To Find Out.
This document discusses the case of Zara, a large international clothing retailer known for its rapid response to fashion trends. It describes Zara's business model, which relies on vertical integration, in-house production, quick response times, centralized distribution, and low advertising costs. The document also discusses Zara's use of information systems across various parts of its business to gather customer data, track sales, coordinate design and production, manage logistics and distribution, and engage in other activities. Some challenges of implementing and maintaining such information systems are also outlined.
This document contains the names of 5 people: Christian Deing, Simon Luyken, Julika Reusse, Sebastian Stratmann, and Anna Worster. No other information is provided.
This document identifies and discusses several supply chain challenges faced by the clothing retailer Zara. It begins by providing background on Zara and its supply chain model. The main challenges discussed include inaccessibility of products to all customers due to centralized sourcing, a large carbon footprint and lack of sustainable practices, and various ethical issues around working conditions and treatment of suppliers and workers. For each challenge, potential solutions are proposed such as implementing e-procurement and e-logistics to reduce costs and improve accessibility, increasing supplier collaboration and quality control to reduce environmental impacts, and enhancing visibility, compliance monitoring and compensation of overseas suppliers and workers to address ethics concerns. The document concludes by suggesting both short and long-term strategies for Zara to address
Zara has become extremely successful due to its responsive supply chain management. It can design, produce, and distribute new fashion items to its stores within 2 weeks, allowing it to stay on top of changing fashion trends. Zara's vertically integrated supply chain with in-house production facilities near headquarters allows it to quickly make changes to designs based on customer demand feedback collected by store managers. This fast production cycle, along with twice-weekly deliveries to stores, means customers always find new inventory that reflects the latest trends, fueling Zara's success.
This case flyer, which is based on the article1 from The Economic Times, discusses Spanish fashion retailer Zara’s competitive advantage built on its deep-rooted innovative business model. Since the time it was established in 1975, Zara had a philosophy of centralized design, manufacture and distribution model. Though the company expanded globally, it never changed its centralized model. Moreover, Zara’s business model could not be duplicated by its competitors. What were the merits and demerits of a centralized business and supply chain model? Why could it not be duplicated? How does Zara achieve a competitive advantage out of this model and sustain it? What unique value proposition does Zara offer to its customers using a centralized model? This case flyer is suitable to teach concepts in the courses of Business Strategy, Business Model/Operating Model and Supply Chain Management. The case flyer also discusses Zara’s expansion in China and debates whether Zara should localize or stay centralized.
URL: http://www.etcases.com/zara-s-competitive-advantage.html
The document summarizes two articles about supply chain management. The first article discusses four supply chain companies that excel at social media through consistently posting fresh, high-quality content across major social networks. The second article discusses issues facing Pakistan's textile industry, including weak planning systems, infrastructure problems, and an inability to meet decreasing lead times demanded by Western markets. It argues that supply chain management should be a key focus to improve competitiveness.
Zara's value chain analysis revealed opportunities to improve its supply chain processes. Zara manufactures many of its products internally but relies on external suppliers in Europe and other low-cost markets. While Zara's distribution system is centralized and efficient, delivering products to stores within 48 hours, longer shipping times internationally could be addressed. Customer feedback directly influences new product designs, though analyzing point-of-sale data from stores across different markets could provide additional insights. Suggested improvements include optimizing the international supply chain and leveraging customer data analytics to better meet customer needs globally.
Zara has pioneered the fast fashion market with a vertically integrated supply chain allowing new designs from conception to stores in just three weeks. It relies on an outdated DOS-based point-of-sale system with no network between stores. In 2003, the CEO must decide whether to upgrade the system and risk reliability issues or continue with the outdated system unable to support future growth. A cost-benefit analysis shows upgrading all 531 stores would cost over 8 million euros but still result in a net margin above industry average, so the CEO should approve the upgrade.
This document provides a case study on the supply chain management of Zara, a global clothing retailer. It discusses Zara's vertically integrated supply chain model that allows it to design, manufacture, and distribute new clothing collections within 2 weeks. This rapid replenishment model has contributed greatly to Zara's success. The document also compares Zara's supply chain to those of other retailers like Myer, Dell, and Toyota, noting differences in their approaches to areas like production, inventory management, and responsiveness to customer demands.
This document discusses Zara's supply chain and business model. It notes that Zara can produce 11,000 distinct items annually compared to 2,000-4,000 for similar companies. Zara's supply chain allows for short production cycles of 4-5 weeks and relies on information technology and a vertically integrated model. Stores provide frequent fresh assortments based on customer feedback and Zara spends little on advertising, instead focusing on prime locations.
Zara has achieved strong financial success through its unique business model. It produces 60% of products in-house, allowing rapid design changes and limited inventory to create scarcity. Store staff quickly relay sales data to designers. Zara's vertical integration, rapid production cycles, and global real estate strategy give it advantages over retailers that outsource manufacturing. However, Zara relies heavily on its largest brand, faces challenges expanding in the US, and risks from a strengthening Euro or increased competition may threaten its future growth.
Comparing Zara and UNIQLO Using Supply Chain Analysis DeshmukhMika Deshmukh
A research paper comparing the supply chain aspects and methods of Zara and UNIQLO in order to draw conclusions about the companies' respective and comparative competitiveness, as well as to provide recommendations to improve their competitiveness in the U.S. market within the next five years.
1. IntroductionIn the modern society, all the enterprises in the.docxSONU61709
1. Introduction
In the modern society, all the enterprises in the face of increasingly complex social environment, fickle and variable current social situation in economy, politics, culture and other factors bring both opportunities and challenges to enterprises. To develop in intense market competitions, be prepared is the foundation of all the business activities. To walk on the right way by a clear direction to reach a right goal, planning must be an indispensable and significant process of the business operation.
Strategy is defined as a plan of action designed to achieve a long-term or overall aim by Oxford Dictionary. A strategy is a series of integrated, coordinated action that designed to help organization develop core competencies and access to competitive advantage. Business model is an abstract representation of some aspects of a firm’s strategy; it helps people to understand how a firm can successfully deliver value to its customers. Unlike strategy, business models do not consider competitive positioning. Business strategic model could help organization to set direction and priorities in less resource and time by a scientific way.
In this report, mainly to explore two different strategic models(SWOT analysis, Porter’s value chain) from several aspects including introduction of strategic model, application of models, analysis and comparison about two models. At last, make a short reflective conclusion about the strategic models.
2. SWOT Analysis
2.1 What is SWOT Analysis model
Today’s organizations find themselves operating in an environment that is changing faster than ever before, SWOT analysis is a method for organization analyze the implications of these changes and modify the way to react to the changes. SWOT analysis is a method based on internal and external environment of the organization analysis or a procedural or structural components analysis thereof embodied in establishing the main strengths, weaknesses, opportunities and threats. (Verboncu, 2016). As a basis of strategic analysis and formulation,
SWOT analysis by analyzing the competitive advantage of the firm itself (Strength), competitive disadvantage (weakness), opportunities and threat, this model helps the enterprise get better know about the opportunities and challenges facing themselves, at the same time, it has vital significance for the development of the public division and formulate the future development strategy. Figure 1. SWOT matrix
SWOT matrix (Figure 1) is made for considering four components; important SWOT analysis’s results of the enterprise should be listed in the table. The combination of the four elements defining this model (the model of "fitting" or the model of "alignment") generates, according to experts, four modes of analysis of internal and external factors, as the basis of specific strategies. (Verboncu, 2016) These four factors come into being different strategy combination like SO, ST, WO and WT. (Figure 2)
Figure 2. SWOT Matr ...
Zara has become very successful in the fashion industry due to its highly integrated supply chain that can design and produce new products in just two weeks. Zara relies on frequent information sharing between stores and designers, cross-functional collaboration, local manufacturing partners, and efficient distribution. As a result, Zara is able to keep inventory turnover high and quickly provide customers with the latest fashion trends, leading to strong financial performance for its parent company Inditex.
Group project for Global Sourcing and Supply Chain Management in China.
We learned an immense amount about e-commerce and fast fashion to supply chain (turnaround rates, warehouse management, etc).
This summarizes a research report about the clothing retailer Zara. It begins with an introduction and background on Zara. It then conducts an environmental analysis using a SWOT analysis and Porter's Five Forces model. From this, it determines that an appropriate strategy for Zara would be to outsource some design operations to China in order to better understand consumer preferences in the growing Chinese market. The report discusses how outsourcing design operations to China aligns with industry-based, resource-based, and institution-based strategic views. It analyzes the risks and benefits and provides recommendations for implementing the strategy.
This document provides an analysis of Zara and its business model. It begins with an introduction that outlines Zara's profile as the leading brand of Inditex, the largest apparel retailer in the world. It then discusses Zara's unique business model of vertical integration and rapid replenishment.
The document then covers various theoretical concepts relevant to analyzing Zara, including Porter's value chain analysis, PESTLE analysis, and the product lifecycle. It identifies the main issues facing Zara as the need to upgrade its aging POS systems and difficulties expanding beyond Europe due to cultural differences.
The focus areas for analysis are identified as Zara's strategic management decisions, how its information systems support decision making, reasons
The document provides background information on Documentum, an enterprise content management software company founded in 1990. It discusses Documentum's opportunities in targeted markets where its software had been tested, such as aircraft maintenance and pharmaceuticals. It also notes threats such as the revolutionary nature of the technology potentially limiting early adoption. The document examines Documentum's challenges in explaining its value proposition to potential clients unfamiliar with their needs. It focuses on Documentum's challenges in selecting an appropriate target market and sales strategy, either focusing vertically on industries or horizontally on functions.
The document discusses Zara's business model and use of technology. Some key points:
1. Zara links customer demand directly to manufacturing and distribution through vertical integration. Designers gather customer data from stores to quickly design and produce new products.
2. Products move from design to stores in just 3 weeks, much faster than competitors. Information technology helps share designs and gather sales data from stores twice weekly.
3. By producing locally and frequently updating stock based on sales, Zara can respond rapidly to fashion trends and consumer demands. This keeps customers returning to stores regularly.
The global apparel industry is buyer-driven, with fragmented upstream production and concentrated downstream retailers and brands. Production is located primarily in developing countries for lower costs. Retailing is increasingly concentrated to improve speed and flexibility. Customer spending on apparel decreases as income increases.
Zara uses a business model of quick response and frequent deliveries of on-trend fashion. It targets middle-income, fashion-conscious customers with affordable prices. Key competitive advantages include a strong real estate network, internal manufacturing allowing quick response, engaged human resources, and integrated IT infrastructure.
The recommendations are to aggressively expand Zara in Europe and the Middle East in the short-term. Expansion in North America is not recommended currently due to
BMS510 Logistics And Supply Chain Management.docxstudywriters
This document provides an overview of supply chain management concepts and Zara's supply chain strategy. It discusses key supply chain concepts like being consumer-centric, partnerships, adaptability, risk control, and innovation. It then describes Zara's supply chain process of designing, manufacturing, shipping and selling products in an integrated manner. Zara is able to get products to stores within 2 weeks compared to an industry average of 6 months. The document also discusses how an effective supply chain can provide competitive advantages through cost savings and efficiency. Zara's rapid response supply chain is highlighted as giving it an advantage over competitors. Challenges for Zara's supply chain like unpredictability and expansion are also summarized. Finally, the interrelationships between the
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Kaan Over
James K. Lill, Adriana Gil-Matos
Introduction to Engineering Management
October 30, 2016
Zara International: Fashion at the Speed of Light
This study analyzes the status of Zara International taking a broader look at the apparel industry where it operates and the competitive factors, its current operational performance, its market competiveness and its response to the new trends such market globalization. The study also stretches to find out whether Inditex is still providing worthy management benchmarks that firms such as Zara could follow.
Apparel Industry and Its Competitive Factors
The global apparel industry continues to grow healthily into the future. This is attributed to the absence of switching costs for consumers and great product differentiation which has resulted into moderate competition rate. Apparel industry is important to all the economies across the globe as it contribute immensely to trade, employment, investment and revenue all over the world. The industry has vast product differentiation, short product life cycles, and is characterized by great pace of demand change that is coupled with rather long and fixed supply processes.
According to statista.com, the US Apparel industry is estimated to be around $225billion with the women accounting for the largest sales volume at $110,826 million. As of 2015, the market was valued at approximately 343 billion U.S. dollars. Price per apparel article in US was estimated to be about $19. The clothing stores sales in the industry was also estimated to about $183.01bn. The U.S. Apparel Manufacturing was reported to have employed about 89,588 people as of 2014. At the retail level clothing store sales in U.S. was estimated at $183.01bn while the U.S. apparel and accessories retail e-commerce revenue was reported to be about $63.5 Major retail and discount stores are the likes of Target, Wal-Mart, and Kohl's; these firms operate by keeping profit margins thin at stores which sell moderately priced apparel.
As seen in the figure below, the market value of the apparel industry in the United States has been on the increase since 2011. In 2011 the market was valued at $309.98 billion, in 2012, this increased to $316.92 and in 2013 it reached $323.75 billion. In 2014, the market again recorded an increase standing at $331.49 billion. In 2015 it increased to $342.94 billion and currently it stands at $358.88 billion.
Fig1: Market value of apparel and footwear in the United States from 2011 to 2016 (In $billion)
The major competitive factors in the apparel industry include the cost of labor, cost of raw materials and the shipping costs (Lu 32). Besides these, in order to remain competitive within the apparel industry, firms must updated on the latest trends in the market. As such, firms must ensure tha.
Name
College
Course
Tutor
Date
introduction
Companies can effectively compete within an industry through innovative models.
Zara is an example, and its competitors are such as Gap, Southwest airlines, Wal-Mart and Dell among others.
Business model and key disruptive elements
Model Innovation disrupted market
-Deliver styles while still hot -marketing to convince buyers
-Reduce marketing cost and increase- -Increase marketing cost
layout cost.
-Hasten shift to customer demand -clearing the stock
Disruptive business model
The disruptive business model reduces the performance of the competitors by introducing new technologies that disrupt the normal activities in the industry.
4
most demanding use 1 2 3 4 3 4 5 6 30 1 2 3 4 2 3 4 5 low qu ality use 1 2 3 4 1 2 3 4
Ordering- orders are made on time and regulation made to ensure that the order is not late.
Fulfillment-the order is fulfilled by the La Coruna team.
Design and manufacturing- Design is made so as to meet the customers taste and ever changing desires.
Operations
The disruptive models change the way the operations are done. It introduces new operation models such as Zara’s the process of ordering, fulfillment and design.
5
Approaches and organization-consistent with the preference for speed and decentralized decision making.
Application development and other IT activities were the responsibility of an Is department of approximately 50 people
Information Technology(IT)
In side the factories,, relatively simple applications were used to plan production.
Most sophisticated ones were large computer controlled equipment that cut cloth into patterns.
Factories
Automated distribution centres e.g miles of automated conveyer belts facilitated the ongoing task of receiving bulk quantities of each garment from factories then recombining the garments into shipment for each store.
Distribution centres
Personal digital assistants(PDAs) and POS systems. Allows redundancy and division of labor.
Constantly upgrades PDAs to meet technological advancement.
POS terminals remained unchanged since they are remarkably stable, effective and easy to roll out and maintain over time.
stores
Zara leads in the profit margins and growth rate due to unique business model within the industry.
conclusion
Work sheet 4
What business is Zara in?
Worksheet#4
Core Competencies & Competitive Advantages
Learning Task#8
Zara Competencies
There are essentially business results and primary business measures which are reflective of Zara’s competitive advantages and core competencies. These are financial and operational. Write them down in the space provided on Worksheet #4
Zara’s core Competencies and how Zara has built them to execute the behavior drivers.
· To create a timely and accurate “one-number plan” that drives all the business functions and enables planning initial assortment at the store level.
· To develop a synchronized supply chain.
6
Competitive Advantages
MGT/498 Strategic Management
Wal-Mart is the world’s largest retailer and deals in general merchandise where the products that they deal in are varied. The largest merchandise that Wal-Mart deals in is grocery, which accounts for up to 56% of the sales (Gallo, 2013). The grocery industry is highly fragmented with several players meaning that the competition levels are very high. For Wal-Mart, there are certain strategies that are being applied to achieve competitive advantage. The company, therefore, has come up with a strategy known as everyday low prices which have helped the company to gather a huge market share. This is the same strategy that has been applied by Toyota as they manufacture low price cars that can suit low-income earners who wish to enjoy the experience of owning a car.
Wal-Mart has created a successful vendor relationship, which has enabled the company to move a mile away from the competitors such as Costco and Safeway and Kroger. Successful vendor relationship ensures that forward supply chain is flawless and that customers can get the products that they need at the best moment, and the best condition needed. This is the same criteria of competitive advantage that has been adopted in Coca-Cola and A.O Smith Water Products. Vendors are very important in ensuring that business is meeting the consumer needs and that they receive proper feedback since the vendors have close contact with the consumers. Toyota has developed such a strong relationship with its vendors who are spread across the world making it easy for them to do business compared to the competitors (Gallo, 2013).
In business the most important factor to success is communication. Most businesses have failed due to their inability to create a proper communication network. For a business such as Wal-Mart that operates several stores and deals with various suppliers, it is very important that communication is made efficient. This is what has happened in Wal-Mart, Toyota, ATT, Coca Cola, Apple, Qantas Airline, Nike and A.O Smith Water Products. Multinational, in particular, need a communication model that ensures all the international branches are linked with the home country as it ensures synergy in operation.
Wal-Mart values its employees more than any other asset that they own. Most businesses have failed to consider their employees as an asset and usually treat them as outsiders. For instance, Nike has had several instances in the 90s when they were accused of mistreating foreign workforce in Asia. Wal-Mart, ATT, and Qantas Airline have shown that a motivated employee is a productive employee. It is the employees who will serve the customers better to elicit frequent returns to business.
The two very important competitive strategies that would ensure that Wal-Mart continues to be innovative and sustainable is having efficient operations management and valuing the employees. When employees are treated well, they feel moti.
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This document provides contact information for an educational services company and includes sample assignments from various business courses. The assignments cover topics such as business communication, economics, corporate social responsibility, information systems, management, and human resources. Students are encouraged to contact the company for help completing their assignments.
This document discusses time-based competition and how organizations have evolved to speed up supply chain processes. It provides an overview of time-based competition and how companies like Zara have implemented strategies to reduce product development times. Zara is used as a case study, being able to develop a concept to store in 15 days versus an industry standard of 6 months. The document also reviews literature on time-based competition and analyzes how effective strategies are compared to industry standards.
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Zara has achieved strong financial success compared to competitors like H&M due to its unique business strategies. Zara vertically integrates the design, manufacturing, and retail aspects of its business. This allows Zara to quickly design and produce small batches of fashionable clothing in response to the latest trends. Zara's rapid product turnover and limited inventory creates a sense of scarcity that drives more frequent customer visits and sales. Zara's internal communication systems and corporate culture also help it quickly translate customer preferences into new product designs within a season. These strategic advantages around vertical integration, rapid response, and scarcity marketing have enabled Zara to outperform traditional retailers.
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2. **Asynchronous TDM (or Statistical TDM)**: Asynchronous TDM addresses the inefficiencies of synchronous TDM by allocating time slots dynamically based on the presence of data. Time slots are assigned only when there is data to transmit, which optimizes the use of the communication channel.
### Applications of TDM
- **Telecommunications**: TDM is extensively used in telecommunication systems, such as in T1 and E1 lines, where multiple telephone calls are transmitted over a single line by assigning each call to a specific time slot.
- **Digital Audio and Video Broadcasting**: TDM is used in broadcasting systems to transmit multiple audio or video streams over a single channel, ensuring efficient use of bandwidth.
- **Computer Networks**: TDM is used in network protocols and systems to manage the transmission of data from multiple sources over a single network medium.
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- **Efficient Use of Bandwidth**: TDM all
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Agile supply chain zara case study
1. Agile Supply Chain: Zara's case study
analysis
Galin Zhelyazkov
Design, Manufacture & Engineering Management; Strathclyde University Glasgow
email: galin.zhelyazkov@strath.ac.uk
Abstract
Purpose – The purpose of this paper is to assess and document the key aspects in Zara's
success by identifing current gaps, and to provide direction for future research efforts.
Design/methodology/approach – Zara's case studies and literature published from 2001 to
2010 was reviewed.
Findings – The review summarizes significant aspects of Zara success, many of which at least
partially addressed in previous research.
Research limitations/implications – This effort is not an exhaustive review of all research
published for Zara. This review does not consider unpublished papers, papers in non-academic
journals, or papers presented at conferences.
Practical implications – This review is a useful resource for supply chain researchers
interested in agile supply chain and retailers willing to learn the key aspects of Zara's success in
agile supply chain.
Originality/value – This paper uses the findings of other researchers as a measure of the
achievements of Zara against academic theory. The gaps identified and challenges made will
serve as a foundation upon which future researchers can build.
Keywords Supply chain management, Agile supply chain, Zara case study analysis
Paper type Case Study Analysis
Introduction
It is becoming clear that the changed conditions in the global marketplace demand a much more
agile response from the organizations and their partners in the supply chain. The period when
production was moved overseas, so business can take advantage of cheap labour is coming
to an end, because fast fashion starts competing not only on price but also on time. According
to Cai-feng (2009) product and technology life cycles are likely to continue to shorten, while
demand will be increasingly difficult to forecast. Decision about raw materials must be taken
long in advance and still remain the most risky part of agile supply chain. Customer behaviour
2. has changed and nowadays buyers want to see frequently new stiles (Bruce and Dali, 2006).
This is clearly result of the new buyers behaviour, clothes are not used anymore to protect body
from cold, but to accompany a persona style and support aimed personality appearance (Cai-
feng, 2009). All these facts play a key role in the new relationship between retailers, suppliers
and consumers.
Supply Chain Management (SCM) is the success factor in fast fashion business. It deals with
suppliers, with supplier’s suppliers, with customers and sometimes even customer’s customers.
It looks at the process from raw materials origin to customer consumption. The output of supply
chain is not just a physical product, but a combination of time, place, form and function of a
product/service proposition (Cai-feng, 2009).
In the fashion world, where companies are competing on time (time-to-market) the need
of new abilities are raising. Agility is such an ability that responds rapidly to unpredictable
changes in demand . Cai-feng (2009) define Agile Supply Chain (ASC) as a network‘s ability
to consistently identify and capture business opportunities more quickly than its rivals do.
Barnes and Greenwood (2006) definition can enrich it by adding: ASC is a “quick response,
describe shorter, more flexible, demand driven supply chains. ASC is driven by information
such as market data and information-sharing between businesses in the supply chain. In agile
supply chains, the visibility of information allows the supply chain to become more responsive to
changes in demand in the market place”.
Part of the ASC process is agile manufacturing. Cai-feng (2009) points at four pivotal
objectives of agile manufacturing: customer enrichment ahead of competitors, achieving mass
customization at the cost of mass production, mastering change and uncertainty through
routinely adaptable structures, and leveraging the impact of people across enterprises through
information technology.
This paper will try to reveal the key aspects of ASC in fast fashion. Zara's case study will be
used, as an example, considered to be the pioneer in fast fashion industry nowadays.
The section following this introduction will present the case study of Zara. The outcome will be
presented and discussed in the results section. Finally, a conclusion will be drawn, followed by
the cited sources.
Zara's Case Study
Zara is a fashion label and fashion chain stores established in 1975 by the Spanish group
Inditex own by Amancio Ortega. Next to Zara, the rest of the labels the groups own are
Bershka, Massimo Dutti, Pull and Bear, Stradivarius, Oysho, Zara Home, Zara kinds and
Uterque. During the last two decades Zara tripled its profit and stores and nowadays is ranked
the third biggest retailer world-wide (Zhang, 2008). It has 3000 in-house designers located in its
headquarter in the region of A Coruña, Spain,which design over 40 000 items per year among
which only 10 000 are selected for production (Li, 2009). Opposite to its competitors, more than
50% of its production is in Europe and not in Asia or South America (Bruce and Daly, 2006).
According to Sull and Turconi (2008) average markdown ratio is at approximately 50 per cent,
for comparison Zara sold only 15 per cent on sale. All these facts allows Zara to expand its
sales and profits over 20 per cent per year. By September 2010 Inditex group owns 4907 stores
3. in 77 countries around the world (38 in Europe and 39 outside Europe). Zara gets the credit
to be pioneer in Agile Supply Chain and most researchers explain its success with its efficient
ASC (Dutta, 2002; Tiplady, 2006; Sull and Turconi, 2008; Zhang, 2008). Zhang (2008) suggests
that “whole process of the supply chain in Zara could be divided into four parts: product
organization and design; purchase and production; product distribution; sales and feedback”.
Product organization and design
Next to its unique models the majority of Zara's items are imitation of high-end brands.
According to Zhang (2008) “the main duty of ZARA’s designers is not for product innovation, but
for reorganizing fashion elements of the existed products on their purpose, transferring them
into new kinds of products. They work to interpret the fashion instead of creating fashion” he
says.
The samples are collected from various sources, like pret-a-porters, haut couture (Dutta, 2002),
moulded by culture, for example what is happening on the street, in clubs, lifestyle hotspots and
fashion “flash points”, and not from a mood board or a trend prediction agency 12 months in
advance of a selling season (Barnes and Greenwood, 2006).
The only place where Zara's is predicting heavily its ordering its fabrics. Fabrics are considered
raw materials and need to be present before the season starts due to long lead times. Anyhow,
there is still efficiency applied in this process. The fabrics are ordered uncolored and this gives
flexibility to change the color depending on the trends. As Cai-feng (2009) mentioning: majority
of stock is held as “work-in-process” awaiting configuration instructions.
Zara is balancing its in-house and outsourcing activities. For example heavy labour tasks like
sewing and coloring are outsourced to companies close to its headquarter, often with bad
reputation for mistreating its employees and poor compensations (Dutta, 2002). On the other
hand activities like design, prototyping and computer aided fabric cuts are held in-house to help
agility. After clothes are assembled and return from the sewing factories, they are distributed to
Zara's stores. To ensure that each order could arrive at destination punctually, laser barcode
scanners, which are able to pick and sort over 80 000 pieces of clothes with a error rate of less
than 0.5%, will be adopted in sorting the finished products (Zhang, 2008).
Procurement
Every organization purchases items, meaning, every organization requires to purchase
supplies, perhaps as raw materials, components, sub-assemblies, spares, equipment, services
and consumables. The procurement of these is either buying or leasing them.
Procurement interacts with every single unit in the organization, going from marketing and sales
to engineering, design and manufacturing, therefore is to important for the organization.
● Procurement is important for the company for a number of reasons: Materials change
- The global markets and agile supply can provide various materials very briefly on
different price. This affects directly the final product, making it more competitive, possible
cheaper and more appealing to the customers.
● Customer demand - Lately there is a growth in companies product mix, while shortening
products life cycle. A good example are Zara designs, they produce small quantities
and wide variety, that way updating the shop outlook every week and cutting down on
5. ● Price variation - The new technologies allow a product price to change couple of times
a day, depending on supply and demand. The same technologies allow monitoring that
process.
● Procurement is value adding process and not a cost centre.
● Manufacturing - It is important for the manufacturing materials to be delivered on time,
with the correct quality, to the correct place, in correct condition and at the right total
cost.
● SCM - Supply chain management puts great emphasis on procurement.
● subcontracting and outsourcing - become more cost effective.
Procurement has direct connection with company profit. Every penny saved in purchasing is a
profit, while every sales brings cost of sales.
In fast fashion, purchasing activities play a critical role through supplier selection and product
decision-making, and indeed, buying is arguably changing from purely operational to much
more strategic (Bruce and Daly, 2006). Bititci (2010) describes the difference between strategic
and operational procurement in the table below.
Strategic procurement Operational Procurement
Goals:
1. Right Place
2. Right Quantity
3. Right Quality
4. Right Time
5. Right Price
6. Right Supply
Goals:
1. Mamage uninterrupted flow of
materials and services
2. Manage cost of operational activities
3. Minimise inventory investment and
lost
Activities
• Developing procurement strategy and
aligning it with the overall organizational
strategy
• Assessing the supply market
• Gathering information, identifying suitable
suppliers
• Selecting supplier
• Negotiate company’s supply contracts
• Evaluating supplier
• Management critical commodities
• Managing relationships with critical
suppliers and the rest of company
• Monitoring procurement performance
• Improving the procurement processes
Developing an electronic procurement
Activities
• Preparing forecasts with quantities and
delivery times required
• Collecting demands
• Controlling authorization issues
• Placing purchase orders
• Follow-up purchase orders
• Communicate with suppliers
• Taking care of administration: delivery, tax
and regulatory issues, invoices
• Monitoring the shipments
• Managing transaction with suppliers
• Source items that are unique to the
operating unit
• Generate and forward material releases
• Provide suppliers performance feedback
6. system
• Implement company’s best practises
Production
Supply Chain Operations (SCO) manages three clear aspects: maximize resource used,
minimize inventory and lead times. Those three directly affect pricing, customer satisfaction,
and overall business values like profit, turnover, sales, etc. (Bititci, 2010). Zhang (2008) argues
that production lot in Zara should be kept as small as possible, leaving the extra capacity in the
products which are mostly needed in the manufacturing. He argues that big orders will result in
inventory increase. On the other hand Tiplady (2006) highlight the raising problem that with the
increased number of Zara stores around the world, lead times cannot be kept so short.
The two factors in a product manufacturing are: complexity and uncertainty. Depending on
those two, products fall into four categories shown below (Bititci, 2010):
High Complexity Low Complexity
High Uncertainty Fitness for purpose
timeliness
Example:
● aerospace
● shipbuilding
Key competences:
1. Product design
2. Construction
Timeliness / Flexibility
Example:
cosmetics
textiles
Key competences:
1. Time To Market
2. Supply flexibility
3. Product design
Low Uncertainty
Value for money
Example:
● automotive
● white goods
Key competences:
1. Product quality
2. Supply flexibility
3. Efficiency
Price
Example:
● simple components
● stationary
Key competences:
1. Manufacturing
2. Logistic productivity
Zara is producing fashion outfits, this has low complex, but high uncertainty. Cai-feng (2009)
argues that uncertainty is also a characteristic of competition among organizations and will
increase due to a combination of factors in future supply chain environment. However, Zara is
7. minimizing its uncertainty by focusing on a limited range of and basic shapes, so that it deals
with a rather narrow product range. In that case even if a product does not sell well, a small
number has been shipped and it is going to be markdown and replaced with new one shortly.
Bruce and Daly (2006) said that “fast fashion does not apply to the whole range in stores, and
as much as 80 per cent of goods may be core and basic lines, with fast fashion accounting for
up to 20 per cent ”. Zara does not do different, it also has its runners and repeaters. The Zara
basic label is daily commodities with no shelf life, e.g. underwear, basic t-shirts, socks, etc. and
are mainly produced in China, which presume cheaper production and longer lead times. On
the other hand the high-end trendy Zara labels like Zara RTF, mainly consisting of up-to-date
fashion outfits are produced in Portugal and Spain, meaning higher production cost and shorter
lead times, but helping fast reaction on demand.
Product distribution
Cai-feng (2009) said that “marketing success was based upon strong brands and innovative
technologies”. Nowadays, next to them we can place ASC, which is capable of responding
faster to the changeable demand. This new addition changes the business to enhance
competition on time by efficient supply chain (SC). There are various ways the business can
influence the SC. Delivery time influences the company image. Lack of company’s product on
the shelf, turns the customer to competitor's product and around 20% never come back. In other
words, short delivery times can increase market share (Bititci, 2010) .
Zara is consider to be the pioneer in fast fashion, with its twice a week supply to its stores with
new fashion items. For comparison, the usual times are from six to nine months (Bruce and
Daly, 2006) for far east clothing industry, 4 months for an international brand and only a week
for Zara (Zhang, 2008). This way Zara can react immediately on demand changes and even
if an item is not salable, there are small number of it in a store. The new items in store keep
people coming back every week and find new goods to buy. It helps to keep the stores “fresh”
and minimize the risk of wrong forecasting (Dutta, 2002).
ASC is critical for the fashion business success. In order to manage supply chain correctly
retailers should take into consideration all possible variables. Those can be: weather conditions,
specific customer requirements, shelf life, raw materials supply lead times, sales forecasts,
market specific requirements, etc (Bititci, 2010).
Zara's success is due to many reasons, e.g. efficient supply chain, efficient organization
management, and one of the most important customer orientation. When the movie Marie
Antoinette was released October 2006 in the cinemas and become total hit in EU and US,
Zara's stores were populated with puffy ball gowns and jackets from velvet with golden buttons
(Sull and Turconi, 2008). Another example of listening to its customers' voice was after 9/11 act
in New York. For a week the colorful outfits were replaced with back and dark colored clothes in
Zara's stores.
Another important aspect is that rapid turnover, eliminates working capital needs, consequently
number of short term loans is decreased. In that sense, the efficiency of Zara originates from a
small scale in operation, small batch of production and transportation, many times of distribution
in small quantities. If order is big, inventory increases and the ability to comply with customer
demand decreases (Zhang, 2008).
8. Sales and Feedback
An early and constant communication between customer and supplier can ensure a better
SCM. Another rule is if customer treats his suppliers well, inform them, being involved with their
process is likely that less issues raise and usually is a guarantee for a longtime partnership.
These facts are well known by Zara and used in its daily operations. Zara’s designers gather
data on sales and inventory from each of its stores on a daily basis and use this to inform
their view of the situation. This process is named Shared Situation Awareness by Sull and
Turnocni. It consist of three steps: observe the raw data, making sense of raw data and testing
hypotheses (Sull and Turconi, 2008).
The raw data comes from quantitative and qualitative approaches. Sales and replenishment
reports are examined hourly by the Zara’s store managers. On the other hand store managers
order items themselves instead of relying on what has being sent from the headquarters. The
accuracy of their forecasting affects their compensation, which makes them more responsible.
Part of the qualitative data gathering is direct customer feedback given to shop assistants daily.
Another one is after shop closes, the store manager and assistants turn to a recovery team
and try to recall what happen during this day, as well as sort out tried, but unsold items in fitting
rooms and try to find a pattern, which can be fed to the design team.
The gathered raw data is analyzed in Zara's headquarter, where design team, fast prototyping
team, market specialists and buyers sit together in tightly coupled teams. The discussions are
located in three halls with open layouts: one for man, woman and children clothes. Based on
feedback new designs are made, prototyped and rated by the team. Depending on the outcome,
there are trowed away or send to store to test if customers will buy them.
In order to test if an item matches with the overall collection, in terms of materials, colors,
fabrics, etc. Zara's headquarter has a facility called Fashion street. It is an underground floor
resembling the high streets of Milan or London, where not only windows are up to date, but also
interior, lights and even background music. This is all carefully designed by architects, visual
merchandisers and designers.
Results
The results from the Zara's case study are presented in subsections listed below. Each section
begins with academic theory and continues with how Zara has implemented it.
Consumer-driven process
Agile companies can be characterized as more customer focused (Power et al, 2001). Typical
for agile organization is to know Who is the customer?; What is his need?; Does the goods
satisfy customer’s needs?; How satisfied he is? (Bititci, 2010). Agile companies were also
found to be using technology to promote productivity, new product development and customer
satisfaction.
In that sense Zara can be considered a typical agile company. Its success is based on the close
connection between customers and designers. Thought internal interfaces Zara is gathering its
information, e.g. sales, staff, leftovers analysis, complaints, and like this is aware of all answers
9. to the question listed above.
Agility – impact on the supply chain
Agility is introduced as a response to the dynamic and turbulent markets and customer demand
(Prater et al, 2001). It directly affects the supply chain and it is one of the reason concepts like
agile supply chain and fast fashion emerged. The need of decreasing lead times and being
flexible in fast fashion introduced involvement of suppliers in the process as being crucial to
their ability to attain high levels of customer satisfaction (Power et al, 2001).
According to Prater et al (2001) the two concepts inherent in most of the 12 attributes specifying
an agile firm are speed and flexibility. Although the speed and flexibility of the supply chain
affect a firm's agility, the agile manufacturing is still an important part of it.
However, in order to react on the rapid change in consumer demand, Zara has developed an
efficient agile supply chain, with all designers, buyer experts and management in one place and
production facilities close to them, assuring full flexibility and agility.
Retailer power
While fast fashion is heaven for its target consumers, it can be hell for traditional retailers (Sull
and Turconi, 2008). Retailers nowadays prefer working with agile suppliers, so they don't have
to carry stock and increase inventory. Like this retailers increase their competitiveness and
strength their position on the market.
Zara owns its store chain and don't franchise, in order to avoid the standard problems. On the
other hand its agile supply chain gives all the benefits listed above. The stores are precisely
organized and the items differ from one to another depending on the shop manager's prediction.
Suppliers under increased pressure
Consumer needs are changing at a much more frequent pace and this reflects on the whole
supply chain by putting pressure on the suppliers. The contemporary fashion industry remains
highly competitive, with additional pressure for fashion companies to compete not only on price,
but also their ability to deliver newness and “refresh” product (Barnes and Greenwood, 2006).
While the most of the retailers are struggling with this new situation, Zara is proven to be the
pioneer in fast fashion with twice a week supply to its stores, keeping them fresh and interesting
for its customers. On the other hand producing small quantities and numerous different outfits
throughout the year. These both aspects help reducing markdowns, sales and outlet to on of the
lowest in the industry, compared to the old fashion retailers.
Elimination of stages in the supply chain
Clothes shopping has its piks traditionally during certain periods of the year matching events
like trade fairs, fashion shows, fabric events etc, organized around a two season approach to
product ranges, with planning for product ranges based on previous sales data, starting as long
as one year in advance of the selling season (Barnes and Greenwood, 2006). The number of
planned seasons has significantly increased in response to consumer demand for newness,
resulting in as many as 20 “seasons” per year (Dutta,2002), for example, in Zara’s case there
10. are more than 40 000 items designed per year. Those are continuously supplied to its stores
increasing the number of “seasons” radically and breaking the tradition two season model.
Conclusion
Over the last decades Zara introduced agile supply chain (ASC) in the fast fashion industry
and positioned itself third in the world retailers ranking. This came as a result of close
communication between customers and its designers and the ability to ship the desired
items in a week catching the sales moment. All these prove that ASC is an aspect enhancing
competition among organizations. Another lesson is that efficient production organization with
a good balance between in house and outsourcing task leads to minimum lead times and
increase in market share for Zara. The supply chain is not on an isolated agile process of Zara,
but indeed the whole organization is agile and working very efficient.
By using quick response Zara aims to reduce both excess stock holding in the supply chain and
risk associated with forecasting as product specifications are not finalized until closer to delivery
(Bruce and Daly, 2006).
What could be concluded from Zara's success from the perspective of speed is that several
benefits such as improved customer satisfaction, increased market opportunity, decreased
overall risks, and reduced total costs can be simultaneously achieved through being fast (Li,
2009).
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