Zara is a Spanish clothing retailer known for its fast fashion model. It operates 1700 stores globally and launches around 12,000 new designs per year. Zara achieves fast inventory turnover through a vertically integrated supply chain that designs, manufactures, and distributes products to stores within 2-3 weeks. Fifty percent of products are made in Spain to facilitate rapid replenishment of stores with new designs twice per week. Zara's supply chain model allows it to stay on the cutting edge of fashion trends at affordable prices.

1. Supply Chain Management
ZARA
Presented By :- Group 12(a)
Arman Anand
Charvi Puri
Mohit Sewani

3. • ZARA is the flagship chain
store of Inditex Group
owned by Spanish tycoon
Amancio Ortega.
• HQ in Coruna, Spain, where
the first ZARA store opened
in 1975.
• Zara has 1700 stores, 78
countries worldwide.
• Zara practices fast fashion –
trends moves from the
runway to stores within
weeks, as opposed to
months.

4. • Zara’s supply chain has undergone tremendous changes in order to
sustain its competitive advantage in today’s market
• Zara has continually maintained its mission to provide fast, affordable,
and fashionable items

5. Inditex : 2012 Global Sales
Breakdown

7. Inventory Management at
• Focus on reducing response time.
• 12 inventory turnovers/year VS.
industry average 3-4 times.
• Launched approximately 12,000
new items per year, compared to
2,000 - 4,000 for H&M and Gap.
• 30,000 Stock-Keeping Units
(SKUs)/year

8. Inventory Management at
• Short shelf life attracts more
customers more often
• Stock outs are not uncommon
• Zara holds 6 days worth of
inventory, while H&M holds 52
days, and Spanish retailer
Cortefiel holds 94 days of
inventory

9. Success winning Formulae
Zara, which contributes
around 65 per cent of group
sales , concentrates on three
winning formulae to bake its
fresh fashion:
1. Short Lead Time = More
fashionable
2. Lower quantities = Scarce
supply
3. More styles = More choice,
and more chances of hitting it
right?
Japan - 72
Hrs
ZARA’s Rate
for the Global
Distribution
from Spain
Europe –
24 Hrs
U.S. – 48
Hrs
China – 48
Hrs

10. Success winning Formulae
• The company's strategy involves stocking very little and updating
collections often.
• Instead of other brands that only update once a season, Zara
restocks with new designs twice a week.
• That strategy works two ways:
– First, it encourages customers to come back to the store often.
– It also means that if the shopper wants to buy something, he or she
feels that they have to buy it in order to guarantee it won't sell out.
• They broke up a century-old biannual cycle of fashion. Pretty much
half of the high-end fashion companies - Prada and Louis Vuitton,
for example - "make four to six collections instead of two each year.
That's absolutely because of Zara.”

11. Suppliers are all close
to their factories so
ZARA can order on a
need-basis Clothes are ironed in
advance and packed on
hangers, with security
and price tags affixed
Overnight trucks are used
to deliver to European
stores and airfreight is
used to ship to other
countries
• ZARA buys fabric in
only 4 different
colors;
• designs and cuts
its fabric in-house
How it Works ?

12. Vertically Integrated Supply Chain
• “Vertical integration is a strategy used by a company to gain control over
its suppliers or distributors in order to
– increase the firm’s power in the marketplace,
– reduce transaction costs
– secure supplies or distribution channels.”
• This enabled ZARA to establish a business model that allows self-containment
throughout the stages of materials, manufacture, product
completion and distribution to stores worldwide within just a few days.
• ZARA - “The vertical integration of our production system allows us to
place a garment in any store around the world in a period between two to
three weeks.”

13. Supply chain Components
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:
Design Production Distribution Retailing

14. Design and
Order Administration
• The company ensure product quality by designing its
own products. Zara has almost 300 people working in
•
its headquarters in Spain.
• These talented people include designers and
specialists. Together they produce designs for
approximately 40,000 items per year from which
12,000 are selected for production.

16. Production
50% of the products Zara sells are manufactured in Spain, 26% in
the rest of Europe, and 24% in Asian and African countries and the
rest of the world.
Zara makes its most
fashionable items half of all its
merchandise at a dozen
company owned factories in
Spain and Portugal, particularly
in Galicia and
northern Portugal where labour
is somewhat cheaper than in
most of Western Europe.

17. Distribution
Distribution Centre – all products pass through Zara’s
major distribution centre in La Coruña. The 5-storey,
50,000 square meter distribution centre employs some
of the most sophisticated and up-to-date automated
systems.
Logistics (Contractors) – In 2012, the distribution
centre shipped 130 million pieces. 75 percent of these
shipments were to stores in Europe. Fashion garments
represent around 80 percent of Zara’s products and the
rest are more basic items.

18. Retailing
Stores usually place their orders and receive shipments
twice per week. Orders have to be placed at pre-designated
•
times.
The overall experience of the customer in the store in
considered. Apart form the fashion supply, the interior
design of the store, coordination of collections, maximum
care over window displays and customer care are some of
the elements that guarantee this experience.

20. Conclusion
• Zara is an example of how a firm can design and
manage its supply chain to gain competitive advantage.
• Zara makes sure that each element of the supply chain
network adds value to the entire operation.
•
• Zara makes sure that it streamline its supply chain,
removing steps that does not contribute to the
achievement of the company’s goals and developing
those elements that add value.
• https://www.youtube.com/watch?v=9n0mikF1Esw

21. References
• http://www.supplychain-forum.
com/documents/articles/Zara%20Case%20
Study%20.pdf
• www.businessweek.com%2Farticles%2F2013-11-
14%2F2014-outlook-zaras-fashion-supply-chain-edge&
ei=pE0AVL6wCYmLuAShqoKgDg&usg=AFQj
CNEGEVmiebxJ4wDUuIFG-yJiZb-EQA
• http://www.zara.com/in/
• http://en.wikipedia.org/wiki/Zara_(retailer)
• https://www.youtube.com/watch?v=9n0mikF1Es
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22. Thanks