Case Study Of Zara Supply Chain

1286 Words6 Pages
The supply chain is the network created amongst different companies producing, handling and/or distributing a specific product. Specifically, the supply chain encompasses the steps it takes to get a good or service from the supplier to the customer {1}. Supply chain management is a crucial process for many companies, and many companies strive to have the most optimized supply chain because it usually translates to lower costs for the company and in Zara’s case a highly competitive and profitable system. Here we are going to discuss Zara’s supply chain or network. Design the starting point is a collaborative phase where teams of creative professionals carry out the design process and store managers who act as trend spotters and report everyday to headquarters. When it comes to materials Zara’s supply chain is unique where they make 40 percent of their own fabrics. As for cutting they produce more than half of its own clothes and even things that are farmed out are done locally to maximize time efficiency. Zara cuts fabric in-house and then sends the cut designs to one of several hundred local…show more content…
That been said, Zara incurs a higher cost on materials and labor by not outsourcing to the cheapest source globally. Spain being in Europe makes it a lot more expensive especially with labor laws and minimum wage and that also increases the cost of materials where we know Zara make 40 percent of their own fabric and the rest probably are purchased on a local rather than a global basis. The cost is offset by the cost savings of not having items shipped all over the world. It is also offset by faster response time between each stage and the closer proximity for distributing or shipping in the Spanish markets and Europe. Zara’s competitive advantage is speed ‘fast’ fashion which is alot more important than the minimal amount that Zara could save by sourcing

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