Time Based Competition

1. Quality and Speed
By Oliver Phelps
Student Number: 14408789
Module Title: Operations Management and the Supply Chain

2. Contents
• A Brief overview of Time Based Competition and how organizations have evolved to make
their supply chain processes faster.
• A review of what the literature around time based competition says and the key elements to
being successful using this strategy.
• Industry example of a company that uses Time Based Competition and how the strategy
works for them.
• Critical analysis of how effective the strategy is compared to industry standards and
prospects for the company moving foreword.

3. A Brief overview of Time Based Competition and how organizations have
evolved to make their supply chain processes faster.
• A holistic approach to managing the internal and external supply chain to maximize speed to gain a
competitive advantage. The ability to respond quickly to consumer trends.
• Key features: flat management structure, informed decisions made rapidly, extensive use of IT, strong
focus on customer.
• The term was first used by George Stalk in around 1990.
• “the competitor that’s best at managing the supply chain is probably going be the most successful competitor over time. It’s
a condition of success.”(Jim Owens, Caterpillar)
• Zara: Automate production and warehouse, in house production, Centralize design and product
development.

4. A review of what the literature around time based competition says and the key
elements to being successful using this strategy.
• Companies that are highly responsive have as a result experienced strong growth.
• Amongst the early adopters of the concept, no limits to concept were thought possible. Faster is better theory
Schmenner, (1988).
• Later on literature acknowledged that time based competition varied differently depending on industry Fine (1998).
• Product has to be suited to this strategy for it to make business sense. E.g. food
• Trade regulation can be a buffer to increases of speed Power (2005).
• “A short PDT is then not too attractive to customers if frequent delays have been observed.”

5. Industry example of a company that uses Time Based Competition and how
the strategy works for them.
Zara
• Keeps production design in house as a way to respond to fashion trends quickly. 2 week gap between new design of
product and reaching the store.
• Effective communication from store to production canters and designers.
• Stock delivered twice a week to stores. Limited range of fabrics and materials to help lead times.
• concept to store in 15 days compared to industry 6 months
• Strong use of IT for customer trends and stock.
• 85% of factory capacity reserved for season adjustments.
• Owns supply chain.
• Growing use of online shopping.
• 11.3 Billion dollar market value with sales of 17.2 Billion Dollars – 2017. (Forbes, 2017)
Source: Trade
Gecko, 2014.

6. Critical analysis of how effective the strategy is compared to industry standards
and prospects for the company moving foreword.
• It takes 12-15 days to create a new fashion style compared to 60-90 using older industry strategy’s.
• Zara can get a concept to a store in 15 days compared to industry standard of 6 months.
• Zara gets 85% of full price for products compared to industry 60- 70%.
• Time based strategy suits the clothing retail market.
• “Zara owner Inditex ramps up digital assault” (FT, 2018).

7. Reference List
• Malik, Y., Niemeyer, A. and Ruwadi, B. (2011). Building the supply chain of the future. [online] McKinsey & Company. Available at:
https://www.mckinsey.com/business-functions/operations/our-insights/building-the-supply-chain-of-the-future [Accessed 22 Apr. 2018].
• Tripa, S. (2007). STRATEGY AND SUSTAINABLE COMPETITIVE ADVANTAGE- THE CASE OF ZARA FASHION CHAIN. [online] Imtuoradea.ro.
Available at: https://imtuoradea.ro/auo.fmte/files-2007/MIE_files/Sunhilde_Cuc_2.pdf [Accessed 22 Apr. 2018].
• Blackburn, J. (2012). Valuing time in supply chains: Establishing limits of time-based competition. Journal of Operations Management, [online] 30(5), pp.396-405. Available
at: https://www.sciencedirect.com/science/article/pii/S0272696312000289#bib0065 [Accessed 22 Apr. 2018].
• Web.b.ebscohost.com. (2013). KNITTING A SUPPLY CHAIN: EBSCOhost. [online] Available at:
http://web.b.ebscohost.com/ehost/detail/detail?vid=0&sid=eb1c6c79-baf0-4a8f-8725-a97b6538e95f%40pdc-v-
sessmgr01&bdata=JkF1dGhUeXBlPWNvb2tpZSxpcCxzaGliJnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#AN=92014605&db=buh [Accessed 22 Apr. 2018].
• Canen, T. and Canen, A. (2007). Time-based competition and multiculturalism A comparative approach to the Brazilian, Danish and Finnish furniture industries. [online] Www-
emeraldinsight-com.ezproxy.northampton.ac.uk. Available at: https://www-emeraldinsight-com.ezproxy.northampton.ac.uk/doi/pdfplus/10.1108/00251740810863834
[Accessed 22 Apr. 2018].
• Power, D. (2005). Supply chain management integration and implementation: a literature review. Supply Chain Management: An International Journal, [online] 10(4), pp.252-
263. Available at: https://www-emeraldinsight-com.ezproxy.northampton.ac.uk/doi/pdfplus/10.1108/13598540510612721.
• Stothard, M. (2018). Zara owner Inditex ramps up digital assault. [online] Ft.com. Available at: https://www.ft.com/content/0b892c0c-32c1-11e8-b5bf-23cb17fd1498
[Accessed 24 Apr. 2018].
• Forbes.com. (2017). Forbes Welcome. [online] Available at: https://www.forbes.com/companies/zara/ [Accessed 24 Apr. 2018].
• Lu, C. (2014). Zara supply chain analysis - the secret behind Zara's retail success. [online] Tradegecko.com. Available at: https://www.tradegecko.com/blog/zara-supply-chain-
its-secret-to-retail-success [Accessed 24 Apr. 2018].