Covid19 managing supply chain risk and disruption deloitte. Zaras strategic capabilities and value chain analysis. Zara is the most compassionate supply chain that ships the latest products to the stores globally twice a week. 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. For zara, its supply chain is its competitive advantage. The parent company, inditex, has two dozen manufacturing plants in spain and more than 1,160 stores. 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. Zara has achieved this despite proudly claiming that they have never spent a penny on advertising.
Supply chain management is the integration of key business processes from end user through original suppliers that provides. 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. It begins by redesigning couture trends for the mainstream market and then leads to manufacturing, distribution and then retailing. It has been in existence since 1975, and its supply chain has been among the key contributors to its success.
Strategic supply chain management of zara fashion store. Supply chain management scm is an emerging area of research between researchers and practitioners. This case study and supply chain model is based on data from articles listed in the bibliography below. The key to zara s ability to establish an agile supply chain rests on the following unique approaches. Perhaps the greatest complement being paid to uniqlo and zara is that some of their rivals are starting to follow their example. Zara is one of the best examples of supply chain success. How zara operates the most agile supply chain in the world there are 5 crucial phases in zara s supply chain procurement, supply, production, manufacturing, distribution. Based on the current consumer trends and the requirements, zara releases the products and supply them accordingly. Primary activities supporting activities design how. Research on innovation supply chain management in fast.
A supply chain is a network of entities and people that work directly and indirectly to move a good or service from production to the final. Zara i made this item you are going to buy, but i didnt get paid for it, read tags affixed to zara garments. It is gradually overtaken by the fast fashion enterprises. Management inventory management under conditions of certainty and uncertainty submitted by. Its well constructed supply chain management strategy. In zara store, we can find clothing for men, women, and children. The focus of the supply chain management function has shifted to advanced planning processes, such as analytical demand planning or. It is a popular fashion designing and manufacturing company, which has been declared as the most efficient market responding enterprise. Zara s procurement team doesnt work on the number of finished clothes but on the quantity of raw materials needed to manufacture the clothes. Zara supply chain free download as powerpoint presentation.
This paper integrates the basic tenets of supply chain generic structures with common attributes of functional strategies, such as reduction in inventory, leadtime. As described in a case study of zara s supply chain, the company is vertically integrated, controlling most of the processes in its supply chain. 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. A retail store network founded by sam walton is operating at 6500 locations globally with the support of 1. In 2007, retailers around the world cut prices and closed stores with the credit crisis in full swing. 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.
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. Zara case study creating value chain with supply chain. Zara is the flagship company of inditex, the global spanish fashion retailer inditex, 2009. Will zaras latest supply chain crisis actually cause. Group 2 abhay kanwar upasna handa gaurav lochab aank dhanda. On the other hand, agile strategy ensures the minimum waiting time to deliver a product. Zara is a clothing line a chain of stores from spain that belongs to the inditex group, a spanish multinational textile producer, and distributor.
A spanish retail brand founded in 1974 could not only sustain but exceed the customer expectations treating them fairly with global presence. 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. Glasersegura, phd slides from introduction to supply chain management, by david. The case of spanish fast fashion retailer inditex zara article pdf available in international journal of business and management 5. And, in keeping with zara s distinctive edge, each of these steps makes a decisive departure from the industry norm. This paper integrates the basic tenets of supply chain generic structures with common attributes of functional strategies, such as reduction in inventory, lead time. 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. Zaras supply chain management model secret behind zara. Zara is considered to be one of the giant players in production, supply chain management of retail industry worldwide. 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 expanding global reach could finally put its iberian peninsulabased ecosystem to.
A leagile supply chain a lean supply chain focuses on promising the best customer value for a product ensuring the best quality. Supply chain management of zara linkedin slideshare. Supply chain analytics for perishable products, springer 20 slides from principles of supply chain management. Supply chain performance in china is important to those who perceive china primarily as a lowcost sourcing or manufacturing region. The retailing success of zara can be partly attribute ted to its excellent supply chain management. The value chain map for the zara company can be designed with the help of socr racetrack. Introduction to supply chain management supply chain management is now considered to be a key to competitiveness for global companies. Zara has maintained its stand as a leader in the apparel industry and what makes it so profitable is its unique supply chain strategies. The company practices a coopetition strategy of enhancing efficient collaboration with suppliers. Scribd is the worlds largest social reading and publishing site. Strategic techniques that differentiate zara from other fashion brands. This research on the european apparel industry emphasizes the economic and supply chain aspects of zara s operation. They have changed the supply chain and gone through a series of problems that takes the company years back.
Zara azel francebih article pdf available in european researcher 4743. On the average, 50% of its products are manufactured in spain, 26% in the rest of europe and 24% in asian countries. At that moment, it made sense to think of supply chain resilience. How supply chains are adapting to the covid19 lockdowns. The case study analyses the strategic, operational and supply chain processes that have contributed to the success of zara s retail operation. So how has zara been able to standout from all other fashion competitors. Zara has succeeded in overtaking gap as the global leader in apparel retailing through innovative supply chain management. 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. 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 case study revolves around zara s supply chain, which is a retailer based in spain and deals with accessories and clothing.
The spanish fast fashion giant has been making headlines as of late after such notes began appearing on garments in its stores in istanbul alerting consumers that it has not compensated an array of garment workers within its supply chain. 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. Establishing sustainability expectations for the supply chain. Zaras supply chain strategies purchasing, supply chain. The secret behind zara and uniqlos supply chain models. Inconsistency in fashion brought down many a clothing store, but swedish fast fashion giant hennes. Originalityvalue this paper uses the findings of other researchers as a measure of the achievements of zara against academic theory. Rethinking their supply chain strategy, zara will face three challenges challenge 1 understand zara s current supply chain strategy challenge 3 craft a future. 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. Scm is commonly understood as the optimization of logistics. The main strategy of walmart is the provision of best quality of merchandise and services at lowest affordable prices for consumers.
Could covid19 be the black swan event that finally forces many companies, and entire industries, to rethink and transform their global supply chain model. Zara use vertically integrated supply chain, where different elements are integrated like design, production, distribution and retailing how zara fashions its supply chain, 2005. This week, supply chain legend zara once again posted excellent results, with 2015 sales and profits both up by 15% over 2014. Mastering supply chain management can enable companies to increase market share, reduce. Integrating supply with demand is a fundamental challenge for managers today. Hence, many researchers have advocated that a lean focused supply chain. Proposal of improvement in supply chain management. 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. This progress makes it possible to integrate all audits into a single, more efficient system. What is meant by upstream and downstream supply chain. 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.
The key to zara s success vertically integrated supply chain where design, production, distribution, and retailing were integrated. Anything coming into your company from raw materials to finished products and used in whatever you deliver to your customers is in the upstream part of your supply chain. However, in recent years, with the trend of the retail market is beginning to slump and rising consumer demand, zara lack of furtherinnovation in supply chain management. Companies scrambled to sort out what production was feasible, and what demand could be met.
Hence, purchasing and supply management is different from supply chain management scm. Zara is a wellrenowned name in the field of clothes and accessories, all across the world. Upstream is the supply network of company suppliers and their own suppliers. Effective and efficient techniques of zara s supply chain model. Rethinking their supply chain strategy, zara will face.
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