This is a case study I made about some factors about Zara's Supply chain management, I hope you find it enjoyable

2. First Question :
On which way can vertical integration of ZARA
be an advantage for the company ?

3. • Zara adopted the vertical integration to
control all the steps in the production and
distribution of it products, in order to increase
it power in the market place.
• Zara manufactures and distributes products in
small batches. Instead of relying on outside
partners, the company manages all design,
warehousing, distribution, and logistics
functions itself.

4. So the main advantages are :
Cutting cost because they do not outsource
any channel.
Cutting time, the operations are faster,
effective, and efficient.
Avoiding conflicts emerging from different
channels.
And mass customization and low process costs

5. Further more vertical integration
facilitates communication:
 POS (Point of Sale Terminals)
“H” structure – information from each store is
independent and parallel to the headquarter
in Spain
PDA – order from the headquarter in Spain by
the manager of each store

6. Second Question :
On which ways can the fact that ZARA has a single
distribution centre be an advantage and
disadvantage?

7. the fact that zara has a single
distribution centre can be an
advantage by
Centralized control, avoid misunderstanding
or conflicts.
Manageable time scheduling, focused on one
rather than managing several different time
schedules.

8. The fact that ZARA has a single
distribution centre can be a
disadvantage by
Diseconomy of scale in long term, the costs is
getting higher and higher.
Because of managing distributions on their
own, designing and production process might
not be in its optimum level.

9. Third Question :
What are the main key success factors in Zara’s
business model?

10. ZARA’s business model is the contradictory to the traditional
fashion business model,
Instead of designing a collection long before hand, and then
inspecting clients feedback, they try to understand what the
customers like, and then design it and produce it.
So there is four main keys to the success of ZARA’s business
model :

11. The 4 Keys of success for ZARA are :
 Accuracy
understanding customer needs- exactly what customers
want, week by week, and store by store.
 Speed
is of vital importance, pushes the moment of production
as close as possible to the moment of sale.
 lower inventories, less need of discounts
ZARA has much lower inventories than its rivals, and less
need to discount unsold goods
 Production
More than 60 per cent of production takes place in Spain,
Portugal, Morocco and Turkey, very few are produced in
low-cost factories in Asia.

12. Thank you for your time