Zara is a large Spanish clothing retailer with over 1700 stores in 78 countries. It practices fast fashion, moving trends from runways to stores within weeks instead of months. Zara's supply chain undergoes constant changes to launch approximately 11,000 new items per year and sustain its competitive advantage. Inventory is kept low at only 1 month worth to attract customers more frequently. Zara produces around half of its items in-house and uses local suppliers to quickly fulfill orders and respond to changing demands.

1. Submitted by:
Nandini Palta
FMM- II
Market Research

2. • Zara is a Spanish clothing retailer
• 1700 stores
• 78 countries worldwide
• Zara practices fast fashion – trends move from the
runway to stores within weeks, as opposed to
months.
• 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

3. Inventory Management
• Focus on reducing
response time
• Launched
approximately
11,000 new items
per year.

4. Inventory Management
• Stock outs are not
uncommon
• Short shelf life attracts
more customers more
often
• Zara holds only 1 month
worth of inventory,
generally. Though at
places it varies according
to the varied consumer
behavior.

5. Forecasting
 Extensive market
research
 Quick input and output
response
 Frequent new styles
• Near-term forecasts
• Short product life cycles
to reduce errors and
improve current products
• Customer feedback

6. Procurement
• Keeps approx. half of its production in-
house
• Separate procurement staff for each
clothing line
• Procures basic textiles from global
suppliers
• Uncomplicated items are outsourced
to China
• Difficult items are produced in Zara
factories and by local subcontractors
• Most suppliers are located in close
proximity to its distribution centers
6

7. Production Planning
• Centralized Design &
Production Centre
• Constant flow of data
throughout the supply chain
• Zara allows its retailers to
change 40%-50% of its orders
• Factories operate on a single-
shift mentality, and can
change quickly according to
unforeseen demands
• Under produces products in
order to create scarcity value
7

8. Warehousing
• “High-velocity” shipping
• Merchandise is selected, sorted, and routed to the “lungs” of
the warehouse
• Merchandise is delivered, Retailers hold products in local
distribution centers or in retail store stockrooms
• “High-velocity” shipping relies on rapid information flows

9. Transportation
• Effective and efficient
transportation network
• Fast delivery time
• Coordinates with all aspects of
logistics
• Quick response in supply chain
• Ability to distribute merchandise
within 2 weeks
• Final step in order fulfilment
• Promotes service quality

10. Customer Service
 Effective Measures of
Customer Service
 Product Availability
 Short Order Cycle Time
 Logistics Operations
 Future outlook

11. Performance Measurement
• Dedicated to creating time to
market efficiency
• Order fulfilment and customer
satisfaction
• Tight linkages between demand
and supply
• Improve performance in
accordance with changes in
demand
• Customer loyalty and brand
recognition
• Expansion into a global market
EFFECTIVENES
S
EFFICIENCY
RESPONSIVE

12. Technology
• Zara: 0.5% of revenue
and 0.5% workforce in
IT
• In store:
• handheld PDA
○ Feedback from customers,
inventory.
• WWW: Online stores
open now.
12

13. World's largest clothing retailer Inditex entered India with
its flagship brand Zara on a Friday in May 2010 and that
day the South Delhi outlet recorded the largest single-
day sale by an international retailer in the country.
"Zara has nailed it," Natasha Chopra, who heads
personal shopping services at Select Citywalk mall in
South Delhi where Zara opened its first shop, said. "It's a
hot favorite among shoppers because it offers trendy
styles between 1,500-2,300.

14. Why Zara is having so much of
popularity?
Zara's ability to chase fashion trends around the world, move a
design from a drawing book to shop floor in two weeks and
launch new lines sometimes twice a week has helped it ensure
steady flow of consumers who now embrace global trends like
never before.
• It's fast.
• It's fashionable.
• Attention grabbing.

15. Expansion plans for India….
• Spanish fast-fashion brand Zara is making waves in
India. As per a recent survey, its average sales per store
soared much above other top apparel brands.
• Its annual sales were of Rs 405 crores, each of Zara's
nine stores in the country on an average made Rs 45
crores last fiscal.
• The company is now planning to open 18 stores across
the country.

16. My personal observation….
• 1st preference of customers who want trendy
clothes.
• Gives quantity.
• Maintained quality.
• International fashion and designs in
affordable prices.
• Good customer service.
• Feedback taken.

17. Thank you…