Zara is all about staying on top of the hottest trends, and exuding an exclusive feel, but its supply chain is the real star of the show.
Here are some of the Toyota Production System principles and strategies that Zara uses Vertical Integration Zara designs as well as manufactures majority of the apparel that customers buy in its stores.
Ensuring all this runs smoothly is what Zara does best - controlling more of its manufacturing and supply chain than most of its competitive counterparts.
From that first store in Spain, Zara has since expanded to more than 2, stores in 96 countries around the world. And it only locks in 50 to 60 percent of its line by the start of the season, meaning that up to 50 percent of its clothes are designed and manufactured smack in the middle of the season.
How can it stay so efficient with the sheer volume that passes through its supply chain? This reduces instances of waste created by large lots of designs that do not catch on and have to be sold for large discounts.
These rockstar-level logistics take it from being just another fashion retailer to an industry example of fast fashion done right. If the design Zara hastily creates in an attempt to chase the latest trend does not sell well, little harm is done.
Its cross-functional operations strategy, coupled with its vertically integrated supply chain, enables mass production under push control, leading to well-managed inventorieslower markdowns, higher profitability, and value creation for shareholders in the short and long term.
Each Zara outlet sends in two orders per week on specific days. In-house production allows the organization to be flexible in the amount, frequency, and variety of new products to be launched.
The company often relies heavily on sophisticated fabric sourcing, cutting, and sewing facilities nearer to its design headquarters in Spain.
Zara produces around million items a year. Low Inventory Zara seems to be extremely cognizant of the perils of inventory. Trucks leave at specific times and shipments arrive in stores at specific times.
For example, it operates typically 4. This is in stark contrast to the average six months it takes to produces items in the fashion industry. Holding inventory is very hazardous for fast fashion because products that are demand one day can be out of favor the next day.
High Product Variability Zara carries about 11, distinct items per year compared to competitors that carry to in stores.3- Zara Vertical integrated Supply Chain To analyze ZARA supply chain, it is interesting to look closely at the product design, inventory management, evaluation of suppliers and vendors, logistics management, material management, time scheduling, information systems which are the main contributors in allowing Zara to offer cutting edge fashion.
The automotive supply chain is a large, complex operation that requires sophisticated management techniques, substantial information technology expertise, and close coordination.
logistics service provider dsv and supply chain movement have created a. Zaras Supply Chain Advantages And Disadvantages Business Essay. Print Reference this. Published: 23rd March, Zara's supply chain consisted of problems of inconsistence, imbalances and market saturation for three of the store chains of Zara, plus the inefficient launch of fashion position had created difficulties in joining the U.S.
Aug 31, · [SUPPLY CHAIN PRACTICES OF ZARA] August 31, INSTITUTE OF MANAGEMENT TECHNOLOGY, NAGPUR PGDM Low level of inventory due to Fast supply chain Efficient system Scanning the fashion trends, market trends and meeting the Documents Similar To Supply Chain Practices at 'Zara' Skip 5/5(6).
Mar 09, · For students of supply chain Zara is an icon, relying on a contrarian strategy of vertical integration in retail apparel to. Nov 14, · For Zara, its supply chain is its competitive advantage. Zara’s expanding global reach could finally put its Iberian Peninsula-based ecosystem to the test.
Spain has always been its biggest market.Download