In the first half of the 1990s, zara s supply chain consisted of problems of inconsistency, 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. Comparative study of supply chain management offast fashion. Supply chain management encompasses the planning and management of all the activities involved in designing, sourcing and. Supply chain management scm is the success factor in fast fashion business. Our priorities socially responsible supply chain 1031, 1032 in 2017, our supply chain comprised more than 1,800 suppliers and 7,000 nonexclusive factories employing more than 2 million people. Supply chain management apparel industry case study supply chain is the oversight of materials, information, and finances as they move. An awardwinning team of journalists, designers, and videographers who tell brand stories through fast companys distinctive lens. Zaras fashion retail supply chain strategies supply chain 247. Zara has achieved this despite proudly claiming that they have never spent a penny on advertising. Inditex, the parent company of zara, reported a sales drop of 24. Fashioning a new supply chain in the wake of covid19. Zara makes sure that each element of the supply chain network adds value to the entire. Zara makes sure the order of raw material is placed before start pdf season in order to avoid any last minute rush.
Aug 10, 2020 operating more than 2,200 stores across 96 countries, zara is one of the worlds leading fashion retailers. Nov 12, 2015 through its just in time or lean business model, zara breaks the fashion supply chain rules by holding low stock and updating its collections continuously. While the clothing giants success can be accredited to various factors from its keen eye for emerging trends to its lasersharp focus on customer experience its highly responsive supply chain is what truly gives zara its competitive edge. Zara supply chain management case solution and analysis, hbr. Twice a week, at precise times, store managers order clothes, and twice a week, on schedule, new garments arrive. Rethinking their supply chain strategy, zara will face. Zara starts by focusing on the customer as the driver for the supply chain. Supply chain management scm is the process of shepherding materials through the many phases of a companys opera. Such activities contain issues of operations, marketing and supply han, 2008. Supply chain management is the process ofoordinating the different phases of moving materials through the production process. Getting rid of slow stock at the end of the season. Moreover, zara has a very strong and flexible transport system that ensures supply delivery of raw materials. Zara clothing company supply chain business logistics.
Ananth iyer greetings and welcome to the new 2008 academic year at krannert. Technology leader saps erp operations solution has become the software backbone that contributes to companies efficiency in the supply chain. The business world is that of supply chain management, which deals with every aspect of product development and distribution. How zara fashions its supply chain emerald insight. It enhances costsavings, customer services and targeting purposes in.
Scor supply chain operations reference model is a process reference model designed by the scc supply chain council a nonprofit organization that manages all official standards for supply chain management implementation and. Zara can design, produce, and deliver a new garment to its 600plus stores worldwide in a mere 15 days. Besides the supply chain efficiencies and marketing philosophies, one of the key factors for zara s success is its postponement strategy. So, supply chain management has become the key element of the overall strategy for the entire chain. They have changed the supply chain and gone through a series of problems that takes the company years back. Mar 09, 2016 this week, supply chain legend zara once again posted excellent results, with 2015 sales and profits both up by 15% over 2014. Responsiveness and collaboration in the fashion supply chain. How the zara supply chain taps into top clothing, retail trends. Zara s supply chain is a very good example of the strategic alignment because people, processes and practices support timebased strategy perfectly. The supply chain team is focused on achieving greater mission impact by engaging business partners, customers and suppliers to ensure acs staff members receive the best, most efficient products and services at the best terms at the right ti. Supply chain management scm is commonly studied in marketing theories and practices. Supply chain in the readymade garments industry zara case study dr. The case study analyses the strategic, operational and supply chain processes that have contributed to the success of zara s retail operation. Pros and cons pros zara s unique supply chain model eliminates most issues faced by other fast fashion retail brands giving it a competitive edge in the market issues eliminated by zara s sc.
Your good business practices dont mean that much if theyre undermined by the other businesses you work with. Zara supply chain management mona singh 14868329 mepm 2015 2 1. Manufacturing is centered in northwestern spain arteixo, galicia, spain where company headquarters and the cube are located. Originalityvalue this paper uses the findings of other researchers as a measure of the achievements of zara against academic theory. Its customercentric services, leading speed, customized technology, logistics, vertical integration and economies of scale grasped from its parent company, inditex, its are the key to its success. Zaras strategic capabilities and value chain analysis. Jan 04, 2020 yet the supply chain model presented here is still a useful picture of the zara supply chain and illustrates its operations and its capabilities see more about this in supply chain modeling and simulation logic. Supply chain model cultural aspects unethical risk management in supply chain introduction supply chain is defined as the global network links to deliver products and services from raw materials to end customers through an engineered flow of information, physical distribution and cash.
In chain to deliver the raw materials on time, the transport logistics should be strong and reliable. Pdf supply chain management of zara mona singh academia. These strong numbers are happening at a scale any business leader. Scribd is the worlds largest social reading and publishing site. Why do you think excellence in supply chain management may be an important ingredient in. Glasersegura, phd slides from introduction to supply chain management, by david simchilevi, philip kaminsky, and edith simchilevi. Thus, this research aims to focus on a famous retail companys zara clothing company supply chain management scm and how it deals with various stages of its supply chain in bosnia and herzegovina. This research on the european apparel industry emphasizes the economic and supply chain aspects of zara s operation. Oct 06, 2017 zara is the largest clothes company in spain, founded in 1975. The key to zara s ability to establish an agile supply chain rests on the following unique approaches. Amany aabed lecturer at the fashion department, high institute of applied arts, 6th of october city. Learn how to manage and harness the dynamics and interactions between firms and entities within a supply chain. Inditex zara s superresponsive supply chain reduces bullwhip effect, ordertodelivery lead time to stores, ensures lean inventory and high level of responsiveness to adapt and deliver.
Logistics management of zara a case study progressive. Why do you think excellence in supply chain management may be an important ingredient in success in the fashion industry. Zara company achieved matchless success in having powerful supply chain. Learn how to manage and harness the dynamics and interaction. Supply chain management is a conscious effort to run supply chains in the most efficient and effective way possible. Zara s procurement team doesnt work on the number of finished clothes but on the quantity of raw materials needed to manufacture the clothes. Below, youll find a definition and brief explanation of this business concep. Zara uses operations research to reengineer its global. I created this video with the youtube video editor. Rethinking their supply chain strategy, zara will face three. This summer was a busy time for all of us at the center interacting with sponsor companies, identifying potential projects and planning an. Zara plays an amazing speed for their entire supply chain. However, the company has expectations in the use of fabric as its main raw materials. Zara would appear to be a testimony to the successful design and implementation of a marketresponsive supply chain strategy.
Zara supply chain management case solution and analysis. Instead of taking advantage of cheaper labour in noneuropean countries, the v ast majority of zara s clothing is produced in europe and all pieces of clothing go through zara s distribution centre in spain. High level of combination within the chain is the best method to get competitive benefit. Supply chain analytics for perishable products, springer 20 slides from principles of supply chain management. Gordon chibroski portland press herald getty images there are a growing number of software s. Leanne copeland and the whole team of zara at manchester exchange square, farida kaikobad, mohan sundram, attia bashir and sarah. Alistair berg getty images a justintime supply chain is one that moves material just b. The best feature of zara supply chain management is that it takes maximum five to six weeks to deliver the product to the customers as compare to its competitors which deliver the final product in five to six months garcia. Zara goes against the mould by insisting on being a vertically integrated apparel company that owns manufacturing, distribution and retail stores. Essay on porter analysis of the zara fashion chain bartleby.
The best feature of zara supply chain management is that it takes maximum five to. Zara supply chain free download as powerpoint presentation. Use these tips and resources to learn more about supply chains and logistics, and why theyre so important to every business. A justintime supply chain moves material to a location at a required time, just before the material is needed in manufacturing. The company practices a coopetition strategy of enhancing efficient collaboration with suppliers. The company does not necessarily focus on the use of renewable sources of energy for its production.
Perhaps the greatest complement being paid to uniqlo and zara is that some of their rivals are starting to follow their example. Search programs the world of big business and international industry will never become less complicated. Zara uses the following principles to increase their net income and maintain a standing of being a brand that is both fashion forward and affordable. Comparative study of supply chain management offast. Many other retailers have such long supply chain lead times that for them it would seem a lost cause for them to even try and respond to a sales report. Zaras unique business model is driven by its supply chain capabilities. How the zara supply chain taps into top clothing, retail. Supply chain refers to those associated operations and activities for converting inputs to outputs. Digitalization of zara and fast fashion technology and. This case study and supply chain model is based on data from articles listed in the bibliography below.
Supply chain a thesis submitted to the university of manchester for the degree of mphil in responsiveness and collaboration in the fashion. Supply chain in the readymade garments industry zara case. My visit was part of a supply chain conference in madrid. Rethinking their supply chain strategy, zara will face three challenges challenge 1 understand zara s current supply chain strategy challenge 3 craft a future. The first is that practically every product that reaches an end user represents the. Zara is a flagship chain store of inditex group which is the worlds largest. The case study revolves around zara s supply chain, which is a retailer based in spain and deals with accessories and clothing. Pros and cons pros zara s unique supply chain model eliminates most issues faced by other fast fashion retail brands giving it a competitive edge in the market.
The concept of supply chain management scm is based on two core ideas. Zara supply chain management case solution, zara supply chain management case analysis, zara supply chain management case study solution, what are the roles that outsourcing and procurement play in the supply chain. Zaras fashion retail supply chain strategies supply. Supply chains can be confusing to newbies and experts alike. It deals with suppliers, with suppliers suppliers, with customers and sometimes. The retailing success of zara can be partly attribute ted to its excellent supply chain management. Zara has already used technology in its manufacturing plants, where complex processes are required to be simplified but such decisions to which extent we may incorporate technology in process and tools are to be taken after concise.
In this section we will be explaining about the techniques that zara uses for its supply chain management. An effective supply chain leads to a smooth process of continuous, uninterrupted production or service for the supply chain to be effective, all the limiting factors of the process are to be dealt in a thriving manner and an alternative should be identified against it to reduce any lead time. The secret behind zara and uniqlos supply chain models. Presented by manju pokharel supply chain management of zara zara. To distribute merchandise to its stores, zara uses a supply chain consisting of two primary warehouses located in spain which periodically receive shipments of finished clothes from suppliers, and ship replenishment inventory directly to every zara store in the world twice. Introduction supply chain is defined as the global network used to deliver products and services from raw materials to end customers through an engineered flow of information, physical distribution and cash. Zara supply chain case study pdf, dedication phd thesis, thesis on patent law, title for research paper about waste management. Supply chain in the readymade garments industry zara case study. A comparison of zara supply chain management vs schoeller. You may have heard about the importance of good supply chain management scm, especially for a multinational firm. It has been in existence since 1975, and its supply chain has been among the key contributors to its success. Unlike these competitors, zara owns mostly retailers around the world, and investing huge capitals to built their own factories owns 22 factories so. Apr 28, 2015 zara s supply chain management analysis provides deeper understanding of internal value chain. Zara brasil eventually lost its case and the consequent appeal, and the case was closed in november 2017.
That is why at inditex we think it is essential that our supply chain is socially responsible and. 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. Zara supply chain case study pdf zaras supply chain. How zara used lean to become the largest fashion retailer. Strategic supply chain management of zara fashion store. No other competitor can copy its business model until it first copies its supply chain. Cant imagine what would happen to my gpa if it werent for you people. Instead, the value of zara s brand comes from its supply chain and its ability to add value to every stage of the supply chain porter, 1985.
L ouis grestner junior once said that everything starts with the customer. Zara is ranked as one of the top 50 global brands in terms of brand value interbrand, 2009. With a vertically integrated supply chain, zara has a differentiated method of sourcing its materials. Nov 21, 2017 in the coming year, the percentage may rise even higher. Sep 27, 2020 finally, the issues of supply chain resilience and sustainability are discussed. This case study has the objective of study zara s strategies, from their supply chain until their marketing and communication strategies, and the strategy in the physical stores versus at the online store. The secret to zara s competitive advantage is its supply chain. Jun 04, 2018 zara supply chain mainly focuses on the need to reduce costs, but gain more in the profits. Both uniqlo and zara took ideas new to the fashion supply chain from the automotive supply chain and therefore innovated, challenging old paradigms in there sector.
Additional case studies, excel templates, tasks and video streams as part of an esupplement enrich this chapter. Nov 14, 20 the key to zara s success vertically integrated supply chain where design, production, distribution, and retailing were integrated. The result is a superresponsive supply chain exquisitely tailored to zara s business model. Zara has maintained its stand as a leader in the apparel industry and what makes it so profitable is its unique supply chain strategies. Toptier fast fashion brands are losing steam in the wake of covid19.
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