Today, Inditex manufactures more than million garments annually via 6, stores in 85 different countries.
April 28, Executive Summary This report aims to study the supply chain management and logistics of fashion retailer, Zara, to boost customer value. The concept of sustainability and competitive advantage is considered with other business models and compared with successful and unsuccessful company.
The study is compared with the supply chain management and business strategies of Zara with Dell and Zara with Myers. The Inditex group owns more than textile companies. Zara is the flagship brand of Inditex, captivating maximum sales Gallaugher, But the global economic condition has changed.
One manufactures computers while the other one apparels. The customer places the order, Dell procurer the supplier and parts, immediate assembly and supply to the customer.
Zara Supply Chain Its supply chain is completely dissimilar from the other one. Designing, sourcing, manufacturing, distribution to outlets, are the main functions of supply chain. Point of Difference Type of supply chain of Dell Dell follows horizontally integrated supply chain whereas Zara a vertically integrated supply chain.
Dell is isolated from the production process, hires third party suppliers for the finished goods and delivery. In contrast, Zara has full control over different phases of production of garments. The company is successful due its full control over the trade, from crafting, to manufacturing, and to delivery.
Total control on the company enables them respond quickly to the changing fashion and customer preferences. This control permits Zara to issue new designs in a short duration of time. Another benefit of horizontal supply chain is that it is controlled easily since minimum responsibilities are there in the assembly line.
On the other side, Dell have to coordinate a number of small procedures, control the whole thing and make necessary changes which is much easier. Both are correct for respective companies. Suppliers Zara follows vertically integrated supply chain so it exercises control over suppliers.
Demand is easily met and manufacturing is easily achieved. Although they have number of suppliers but speed and accuracy is the primary concern for Dell to their services of clients. Risks are involved like uncertainty, insecurity, shortage of goods and delay in delivery.
But instead of lessening their stocks, Dell stresses on high speed delivery of products. Production philosophy Dell follows make-to-order strategy.
Such a strategy is custom — made in a very short span of time for respective customer that is orders are made as per the requirement of the customer at reasonable prices. Sometimes the core competencies of partner firms or suppliers and information technology are leveraged, such as the Internet, to incorporate a value chain.
Dell provides range of customized products on its website. They also design products which are easily customized. Zara is keen in introducing new designs and launching new products very quickly.
They believe more styles are equal to more choices. They launch products in a limited showroom in which stores receives few pieces of the new product. This strategy of making the product exclusive sold out the stock quickly also generates curiosity in customer about their next launch, making the next product exclusive and demanding.
The strategy of lower quantity is equal to limited supply is equal to compulsion purchase. Zara does not advertise their products because they do want a brand image. Since products are limited, customers frequently store to check new arrivals. Some clothes are highly demanding in some region while the other clothes in other region.
For an instance, in India demand for summer clothes is very high for their tropical climate, whereas in Europe demand for woolen clothes is very high due to their cold climate all through the year.
Europe being the fashion capital of the world can market their products in other region such as Asia. Dell puts forward their philosophy of make-in-order products.
Storage Dell has low inventory costs with no extra cost on warehouses. They have 7 hours of inventory instead of 10 days. Other costs like warehouse, direct delivery, supplier storage with transporter or retail storage with direct customer pickup helps them cut cost. Dell has no inventory policy.
On the contrary Zara has number of warehouses to store their garments and circulate them efficiently.Zara case operation management Words | 15 Pages.
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Study Analysis- Zara ABSTRACT This paper is based on case study on operation management and positioning strategy of Zara, one of the world’s fastest growing manufacturers of fashion clothing. The Supply Chain Revolution: Innovative Sourcing and Logistics for a Fiercely Competitive World [Suman Sarkar] on ashio-midori.com *FREE* shipping on qualifying offers.
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