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’s Supply Chain Approach. Then the study will focus on the consumer: their behavior according to the different generations and the brand perception according to them. Zara designs and manufactures clothes for women, men, and children, and it has 500 retail outlets in big cities around the world. The result? The company practices a co-opetition strategy of enhancing efficient collaboration with suppliers. industry and the high cost of mistakes, Zara’s supply chain approach enables it to make its design and production decisions within a fashion season instead of well in advance of a season, resulting in better response to demand. Thirdly, though Zara’s supply chain has higher cost but it allows the advantage of low inventory and higher profit margins. Enter the email address you signed up with and we'll email you a reset link. (Please do not distribute without the authors’ permission) Fast fashion is a business model that ofiers (the perception of) fashionable clothes at afiordable prices. Zara’s Supply Chain. 13 Value Chain of ZARA.. 14. Download full-text PDF ... the importance of Supply Chain (Management) has appeared. other retailers, Zara's machinery can react to the report immediately and produce a response in terms of a new style or a modification within 2-4 weeks. In recent years, the technology and systems developed at Inditex have grown exponentially in quantity and quality and we now have specific programmes for sustainably managing the supply chain. The value chain map for the Zara company can be designed with the help of SOCR racetrack. Practical implications – This review is a useful resource for supply chain researchers interested in agile supply chain and retailers willing to learn the key aspects of Zara's success in agile supply chain. You can download the paper by clicking the button above. To learn more, view our, The role of market orientation on company performance through the development of sustainable competitive advantage: the Inditex-Zara case. our whole supply chain, which in 2018 comprised 1,866 suppliers and 7,235 factories. Manufacturing is centered in northwestern Spain (Arteixo, Galicia, Spain) where company headquarters and “the Cube” are located. Academia.edu no longer supports Internet Explorer. The secret to Zara’s competitive advantage is its SUPPLY CHAIN. 14 15. Zara is ranked as one of the top 50 global brands in terms of brand value (Interbrand, 2009). Load a copy of the Zara supply chain model from the online library into your account. 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. The brand is present in 77 countries and has a network of 1, 608 shops (in 2009). SEJ posted record profits during the … Sorry, preview is currently unavailable. successful in integrating the use of demand data into operations across echelons of its supply chain. The Key to ZARA's Success • Vertically integrated supply chain where design, production, distribution, and retailing were integrated. No other competitor can copy its business model until it first copies its supply chain. 4.0 Value Chain Map for Zara. Agile Supply Chain: Zara's case study analysis Galin Zhelyazkov Design, Manufacture & Engineering Management; Strathclyde University Glasgow email: galin.zhelyazkov@strath.ac.uk Abstract Purpose – The purpose of this paper is to assess and document the key aspects in Zara's success by identifing current gaps, and to provide direction for future research efforts. In this section we will be explaining about the techniques that zara uses for its supply chain management. 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).The total brand value of ZARA is $9.4 billion as of May 2015 and the revenue generated is around $14.8 billion. Inditex Chief Executive Jose Maria Castellano says, “This business is all about reducing response time. While the clothing giant’s success can be accredited to various factors — from its keen eye for emerging trends to its laser-sharp focus on customer experience — its highly responsive supply chain is what truly gives Zara its competitive edge. This post looks at Zara's supply chain success, how they implement an omni-channel experience, and their vertically integrated strategy that allows them to quickly innovate and alter products. ZARA is the largest clothes company in Spain, founded in 1975. Fashion retailer Zara is renowned for the speed and agility of its supply chain, for example.1 Apple, Procter & Gamble, Cisco Systems and Wal-Mart also rank among those regarded as leading examples.2 However, most pharma companies have supply chains that are neither flexible nor cost-effective. The case describes how Zara, operating out of the Galician port of La Coruna in north-west Spain has managed to become a benchmark for speed and flexibility in the garment industry. The case offers an illustration of a fast-response global supply, production and retail network. To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to upgrade your browser. Knowing and identifying all the links in our supply chain is the basis for being able to control and improve it. Practical implications – This review is a useful resource for supply chain researchers interested in agile supply chain and retailers willing to learn the key aspects of Zara's success in agile supply chain. They have changed the supply chain and gone through a series of problems that takes the company years back. Zara plays an amazing speed for their entire supply chain. 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? Zara’s single, centralized design and production center is attached to Inditex (Zara’s parent company). Zara relies on its creative team of more than 200 professionals. Zara produces around 450 million items a year. Operating more than 2,200 stores across 96 countries, Zara is one of the world’s leading fashion retailers. More information on pages 294 and 295 of this Annual Report. Zara has achieved this despite proudly claiming that they have never spent a penny on advertising. Most of competitors such as H&M and Gap, most of production processes of these firms are outsourcing in some low labor cost countries. other supply chain activities can be harmful to the environment •Supply chains can work harder to reduce environmental degradation •A large majority (75%) of U.S. consumers are influenced by a firm’s environmental friendliness reputation •Recycling and conservation are a growing alternative in Originality/value – This paper uses the findings of other researchers as a measure of the achievements of Zara against academic theory. History of Zara’s economic growth. The retailing success of ZARA can be partly attribute ted to its excellent supply chain management. 15 Conclusion.. ZARA is an example of how a firm can design and manage its supply chain to gain competitive advantage. Reprint R0411F; OnPoint 8363 Rapid-Fire Fulfillment by Kasra Ferdows, Michael A. Lewis, and Jose A.D. Machuca November 2004 Spanish clothier Zara turns the rules of supply chain management on their head. Zara gives high importance to the customer. When you run the first simulation you will see a problem occurs on day 5. To appear in Retail Supply Chain Management: Quantitative Models and Empirical Studies, 2nd Edition, Narendra Agrawal and Stephen A. Smith (Editors), Springer, New York, NY. ZARA: Vertically Integrated Supply Chain • 10. “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.” 9. R&D INDICATORS - INTEGRATED SUPPLY CHAIN MANAGEMENT The scale and heterogeneity of Inditex's supply chain requires being able to operate with analytical capabilities to handle massive volumes of data. specialty apparel chain, Zara, as an example of excellence in supply chain practices. Then start running simulations to see how the supply chain works. A supply chain stays tight only if every company in the chain has reasons to pull in the same direction. Zara is a major division of the Spanish retailer Inditex, the world’s largest apparel retailer. The case study revolves around Zara’s supply chain, which is a retailer based in Spain and deals with accessories and clothing. Academia.edu uses cookies to personalize content, tailor ads and improve the user experience. WHAT IS THE RISK AND BENEFITS ASSOCIATED WITH OUTSOURCING MANY OF FIRM’S 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). Challenge 1 … Zara is able to react to trend changes and to Originality/value – This paper uses the findings of other researchers as a measure of the achievements of Zara against academic theory. ZARA Supply Chain Management Mona Singh (14868329) MEPM 2015 2 1. By using our site, you agree to our collection of information through the use of cookies. Perhaps the greatest complement being paid to Uniqlo and Zara is that some of their rivals are starting to follow their example. R&D in Traceability. Rethinking their supply chain strategy, Zara will face three challenges Challenge 1 Understand Zara’s current supply chain strategy Challenge 3 Craft a future‐ready supplychain strategy for Zara Challenge 2 Anticipate Zara’s future supply chain needs How can we understand Zara’s current SCS? Some companies have superb supply chains. It has been in existence since 1975, and its supply chain has been among the key contributors to its success. The key to Zara’s ability to establish an agile Supply Chain rests on the following unique approaches: Procurement Methodology: Zara’s Procurement team doesn’t work on the number of finished clothes but on the quantity of raw materials needed to manufacture the clothes. Academia.edu no longer supports Internet Explorer. Start by doing whatever seems necessary to keep the supply chain running without stock-outs or over-stocks for 15 days. To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to upgrade your browser. Fashion Industry Supply Chain Issues: Zara (Azel France/BiH), Fashion Industry Supply Chain Issues: Zara (Azel France), FAST FASHION IN THE MOROCCAN APPAREL SUPPLY CHAIN: A CASE STUDY, International Journal of Managing Information Technology (IJMIT), Agility and Responsiveness Managing Fashion Supply Chain. You can download the paper by clicking the button above. Download full-text PDF Read full-text. Enter the email address you signed up with and we'll email you a reset link. Sorry, preview is currently unavailable. Case 10 Zara Global Supply Chain Keeping Ahead of Competition Zara is a clothing brand of garments for men, women and children. 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. This research on the European apparel industry emphasizes the economic and supply chain aspects of Zara’s operation. 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. The secret is it is supply chain management. The case study analyses the strategic, operational and supply chain processes that have contributed to the success of Zara’s retail operation.
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