The successful implementation of an integrated supply chain strategy. Supply chain management scm is the success factor in fast fashion business. Zara supply chain management mona singh 14868329 aut university mepm 2015 zara supply chain management table of contents 1. 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.
And, in keeping with zaras distinctive edge, each of these steps makes a decisive departure from the industry norm. Zara has achieved this despite proudly claiming that they have never spent a penny on advertising. That said, i still believe its extremely difficult to replicate zaras supply chain strategy, especially for more established businesses within the industry. Due to the smart marketing strategy of zara, the unique and fresh retail chain is growing by leaps and bounds without much spends on advertising. Zara has an extraordinary supply chain, which gives them a highly competitive advantage. Strategic value creation in a supply chain hi, with more interaction among the supply chain partners, appears to be a more appr opriate choice for business due to its collaborationfr iendly setting. The company is extremely committed towards swift response to the consumer demand in terms of fashion trends, fast production of clothes in a short life span schoenfeldt 2008. Sep 02, 2018 competitive advantage in the marketing strategy of zara strong parent company. Supply chain performance in the apparel industry zara. Chapter 7 studies the management of the project both from an economic and temporal. Zaras strategic capabilities and value chain analysis. Zara is an international fashion retailer which has gained considerable acclaim, being one of the leaders of the highstreet fashion industry, and regularly producing new products for the market, at a rate that is quicker than its competitors can achieve, due to the strong supply chain in place. How zara fashions its supply chain emerald insight. Evaluating effective supply chain management in zara.
Get the most appropriate analysis of zara case study related to supply chain management from our management experts. Rethinking their supply chain strategy, zara will face. Inconsistency in fashion brought down many a clothing store, but swedish fast fashion giant hennes. Zaras overarching strategy is achieving growth through diversification with vertical integrations. Zara chose to handle design, production, and distribution inhouse and concentrate the whole production close to their headquarters in spain. Zara makes sure that each element of the supply chain network adds value to the entire. Rethinking their supply chain strategy, zara will face three challenges challenge 1 understand zaras current supply chain strategy challenge 3 craft a future. To achieve this, zara controls more of its manufacturing and supply chain than do most retailers. However zara s success story lies in its unique break through supply chain strategy. For students of supply chain zara is an icon, relying on a contrarian strategy of vertical integration in retail apparel to introduce. This progress makes it possible to integrate all audits into a single, more efficient system. Zara is one of the best examples of supply chain success.
How zara operates the most agile supply chain in the world. Zara s procurement team doesnt work on the number of finished clothes but on the quantity of raw materials needed to manufacture the clothes. Although zara also makes home furnishing under the brand zara home, this only contributes 2. Dec 07, 2011 this fast fashion system depends on a constant exchange of information throughout every part of zaras supply chainfrom customers to store managers, from store managers to market specialists and designers, from designers to production staff, from buyers to subcontractors, from warehouse managers to distributors, and so on. The key to zaras ability to establish an agile supply chain rests on the following unique approaches.
Rethinking their supply chain strategy, zara will face three challenges challenge 1 understand zara s current supply chain strategy challenge 3 craft a future. Fashion at lower prices makes it easy to purchase for shoppers. One of the biggest advantages of zara s supply chain strategy is being able to react quickly to all fashion trends and supply customers latest fashion outfits as soon as in few weeks time. The two cases show that a tailormade supply chain strategy is essential to each company, even though they are in. Subsequently, efficient and responsive supply chain strategies. The strategic plan for a stable and sustainable supply chain 20142018 includes identifying and properly knowing suppliers and manufacturers, performing exhaustive assessments and. The first store opened by accident in 1975 due to a large pyjamas order cancellation. The aim of this research is to give a clear picture of the theoretical research and to be able to manage analysis of the zara case study showing how company purchase and which supply chain strategy perspective. Operations and supply chain strategy 4 dmitry ivanov a, alexander tsipoulanidis a and jorn schonberger b a department of business administration, berlin school of economics and law, ber lin. It starts with an introductory casestudy considering supply chain strategies in the apparel industry. Inditex and the sustainable development goals inditexs contribution goal 3. Zara is the most compassionate supply chain that ships the latest products to the stores globally twice a week.
The key to zara s ability to establish an agile supply chain rests on the following unique approaches. The retailing success of zara can be partly attribute ted to its excellent supply chain management. Operations and supply chain strategy 4 learning objectives for this chapter. The authors analyzed the stock performance of zara, the gap, and. Inditex zaras superresponsive supply chain reduces bullwhip effect. Inditex, the parent company of the brand zara have a strong portfolio of 8 brands which is helping the company in nurturing each brand with its experience and strong financial base. Another key strength of zara that has helped it to grow its customer base and revenue faster is its pricing strategy. Supply chain activities transform natural resources, raw materials and. Supply chain strategies 111 supply chain planning encompasses a comprehensive perspective of business operations suppliers supplier supply chain strategy and network design regional and global collaboration organisational design crossenterprise supplydemand planning supply chain performance measurement.
In 2007, retailers around the world cut prices and closed stores with the credit crisis in full swing. 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. 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. Vertical integration is a strategy where a company expands its. Zara is among the affordably priced brands by inditex. It begins by redesigning couture trends for the mainstream market and then leads to manufacturing, distribution and then retailing. Proposal of improvement in supply chain management. In zara store, we can find clothing for men, women, and children. The commitment towards the companys strategy and alignment of the supply chain with the strategy has yielded immense success for zara. Master of engineering in logistics and supply chain management.
Sustainable management of the supply chain inditex. Strategic techniques that differentiate zara from other fashion brands. Apr 16, 2020 this article will describe each supply chain type and will outline the criteria for adopting them, thereby helping to answer one of the most frequently recurring questions among supply chain executives. The project is a study on how vertical integration as a supply chain strategy has worked for zara in emerging as a fast fashion system. So how has zara been able to standout from all other fashion competitors. I believe the supply chain strategy adjustment is difficult to execute in isolation of the fundamental strategic direction. The strategic plan for a stable and sustainable supply chain 20142018 includes identifying and properly knowing suppliers and manufacturers, performing exhaustive assessments and helping them to improve and optimize the social and working conditions of their employees, thus ensuring their sustainability and adjustment to the standards required by inditex, creating stable and longterm. Zaras supply chain management model secret behind zara.
Ensure healthy lives and promote wellbeing for all at all ages. This bibliography was generated on cite this for me on tuesday, april 21, 2020. All products are to leave the warehouse after a maximum. There is no undo, but if a change doesnt work out, you can restore from. However, technology can play an important role in supply chain management and heinzs. In 40 years since it began retailing clothes, it has emerged as one of the worlds fastest growing manufacturers of affordable fashion clothing. Instead, the value of zaras brand comes from its supply chain and its ability to add value to every stage of the supply chain porter, 1985. Effective and efficient techniques of zara s supply chain model. In this paper, we utilize a network economics approach to develop a mathematical model for fashion supply chain management that allows a. These are the sources and citations used to research jnb522 business logistics assignment 3. Based on the current consumer trends and the requirements, zara releases the products and supply them accordingly.
Zara is known for having one of the best supply chains due to their particular attention to detail when it comes to their logistics, something that comes only second to their products. This chapter discusses basic supply chain and operations strategies. Because zara is a private company, specific details of the zara business model and supply chain can be difficult to verify. We try to explain how zaras integrated approach to supply chain management optimizes the entire chain instead of focusing on singular parts. The two cases show that a tailormade supply chain strategy is essential to each company, even though they. Digitalization of zara and fast fashion technology and. For students of supply chain zara is an icon, relying on a contrarian strategy of vertical integration in retail apparel to introduce dramatically more new. Zara supply chain analysis the secret behind zaras retail success. Pdf supply chain management of zara mona singh academia. Supply chain management scm should enable companies to develop and execute strategies that efficiently integrate the management of all the players in a supply chain. We also briefly contrast the business model of victorias secret to that of zara, a spanish apparel retailer, and explore the differences in the supply chain strategies. Mar 17, 2019 zaras growth is also a result of its focus on innovation throughout its value chain. Its well constructed supply chain management strategy. There are 5 crucial phases in zaras supply chain procurement, supply, production, manufacturing, distribution.
As described in a case study of zara s supply chain, the company is vertically integrated, controlling most of the processes in its supply. Fashion supply chain management through cost and time. While it may not be possible for another company to exactly duplicate the conditions under which zara. Zara supply chain free download as powerpoint presentation. A zara supply chain strategy was the key term of my research and was an important part of my theoretical focus on supply chain strategy. Zara s success is as much a result of its history and location, as of its counterintuitive business strategies. It also focuses on analyzing the competitive advantages and the challenges of implementing vertical integration for zara.
Rethinking their supply chain strategy, zara will face three. Zara is the flagship brand of the spanish retail group, inditex sa, second and third day it starts to look stale, but customers may. How zaras winning strategy is disrupting the indian. Originalityvalue this paper uses the findings of other researchers as a measure of the achievements of zara against academic theory. Logistics and supply chain management scm as disciplines came to the. Zara case study solution tight deadlines, unclear tasks, clashing assignments are giving you sleepless night. Apr 30, 2017 supply chain management of zara azkya telisha. Zaras procurement team doesnt work on the number of finished clothes but on the quantity of raw materials needed to manufacture the clothes. Zara 7s framework strategic management paper zara created by. Originalityvalue this paper uses the findings of other researchers as a measure of the achievements of zara. Jan 23, 2018 zara has managed to implement a crossfunctional operations strategy, along with its verticallyintegrated supply chain that enables mass production under push control, leading to lower markdowns, higher profitability and value creation for shareholders in the short and long term. Its imperative to look at zara s impeccable supply chain strategy. Zara s business success with its flexible approach is demonstrated in its stock market success as well. International strategies transnational strategy zara.
Zaras supply chain success story zara is a spanish fashion clothing manufacturer and retailer, formed in the 1970s it is known that only two weeks are required for zara to complete the development and shipment of a new product to its stores, which outweighs the average of fashion industry of six months, thanks to the. Even through zara adopted alternative market entry modes such as joint ventures or franchises, the dependency on zaras centralized system ensures that zara can appropriate the most significant portion of available rents from their markets. Due to zara s supply chain management approach there are excisting weaknesses in their current activities. Inditexzaras superresponsive supply chain reduces bullwhip effect. This typically can be said to be an emergent strategy as the zara store today was not an intended strategy. May 02, 2019 in zara store, we can find clothing for men, women, and children. Zara has followed an optimal combination of all these. Primary activities supporting activities design how.
In the first part, operations strategies as well as the strategic fit are discussed. 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. More than 95% of zara s sales revenue comes from its clothing business. Nov 14, 20 the key to zaras success vertically integrated supply chain where design, production, distribution, and retailing were integrated. We offer zara s case study help at most affordable prices through. Feb 11, 2017 zara is present in countries in europe, america, and africa, with more than 1400 stores in 69 territories but with the majority of them in spain. This paper deals with the study of supply chain management and logistics of zara, a fashion retailer for boosting their customer value. For zara, its supply chain is its competitive advantage. One of the secrets of zara s success is that the brand trains and empowers its store employees and managers to be particularly sensitive to customer needs and wants, and how customers enact them on the shop floors.
Anggita sulisetiasih the following is the framework of porters five generic strategies and the. 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. That said, i still believe its extremely difficult to replicate zara s supply chain strategy. In the microsystem, for example, bronfenbrenner states that advantages of responsive supply chain of zara. Marketing strategy of zara zara marketing strategy. The commitment to ensure safe and healthy work environments to promote the health and wellbeing of workers is key to inditexs supply chain. It deals with suppliers, with suppliers suppliers, with customers and sometimes. Click save button next to your model in account management screen. Zaras power is not easily duplicated as they control a significant portion of the value chain.
Jan 04, 2020 because zara is a private company, specific details of the zara business model and supply chain can be difficult to verify. A case study analysis of zaras operations strategy. The purpose of this work project will be to provide an analysis on zara s business strategy, namely its approach to marketing, in order to extract the main challenges faced. Zara is the flagship company of inditex, the global spanish fashion retailer inditex, 2009. Zara is an international fashion retailer which has gained considerable acclaim, being one of the leaders of the highstreet fashion industry, and regularly producing new products for the market, at a rate that is quicker than its competitors can achieve, due to the strong supply chain. Scribd is the worlds largest social reading and publishing site. As described in a case study of zaras supply chain, the company is vertically integrated, controlling most of the processes in its supply chain. Zaras successful supply chain management strategy social. Our next objective will be the integration of traceability audits used to verify the traceability of the supply chain, based on the analysis of information gathered through the manufacturer management system.