Operation Management Concept And Theories Of Zara

The continually increasing globalization in the world has linked many countries together and the borders have become inconspicuous. Many firms cooperate in a global market, which leads to an increased amount of transnational corporations acting in a global surrounding (Douglas & Wind, 1987). In the fashion industry, the business environment is especially competitive and firms have to adjust their business practices rapidly such as products and launching time of each collection on the basis of the demand of current market (Lowson, King & Hunter, 1999). Companies in the fashion industry like ZARA, Topshop and H&M have emerged a new trend — “fast fashion” that combines two main characteristics: short lead times and trendy design products (Passariello,2008 ; Rohwedder & Johnson, 2008). However, fast fashion leaves behind some issues, which are not beneficial to environmental protection and human costs. In fast fashion industries, it requires companies to complete missions in a short time, some fast fashion companies use unethical acts in order to complete producing on time which may result in environmental issue and appears unfair labour practices. In addition, Luz (2007) pointed out that globalization provided fast fashion industries a chance to produce clothes at lower prices so that they can sell clothes with a cheaper price. This result in many customers considers fast fashion clothes to be disposable. Therefore, this essay will first explain what is fast

Zara is the most successful retailer brands of Spanish company of the Inditex group. In May 24, 1975, Zara opened the first store in the coastal town of A Coruna in downtown La Coruna, Galicia, Spain, and opened first retail store by Amancio Ortega and Rosalía Mera. Zara is a Spanish clothing and accessories retailer in

II. Over the past few years, fast fashion has been an extremely hot segment and source to help some clothing companies increasing on their economic growth.

Zara is the clothing company, which differentiates itself many areas. It is part of the Inditex Group, which is the one of the largest fashion company in the world. Zara is the first and largest brand of Inditex, it is the brand that has the highest impact on the Group. The first Zara store opened 1975 in Spain, founded by Amancio Ortega Gaona, who had already been in the clothing manufacturing business since 1963, owning several factories. In 1985, Inditex was formed as a holding company for Zara and the other companies in the group. It is presented in 88 countries, with 6,683 stores and 137,054 employees around the world, including 1923 Zara stores. (www.Inditex.com)

Second, in fulfillment, we can also see speed in responding to demand. For example, the replenishment, as well as production will be optimized according to supply and demand as quickly as possible. Besides, the fulfillment will commonly completed in one or two days, clothes flowed quickly, and without stopping, from factories to DCs to stores, where they were immediately put on the sales floor. Third, in design and manufacturing, we can find how Zara respond quickly to demand. Zara brought out new items continuously throughout the year, including both changes to existing garments and entirely new creations. The network of production had made design from conception through production and into the DC in as little as three weeks. Besides, Zara did not have to predict what would be selling six months, or even one month, in the future; it could continuously sense what customers wanted to buy and respond “on the fly.” All these operations reflect the speed-chasing and target-oriented nature of Zara business.

As we all know that fashion industry have short product life cycles i.e., the trend keeps on changing in order to respond to the rapid market changes the conventional forecast driven supply chain management is not adequate to meet the challenges in the fashion industry.

All in all, in this assignment I answer three questions. These questions are very important for any company that related to produce product in fast fashion like Zara Company. So, the question in this assignment was talked about what is the supply chain for Zara Company from raw material to customer and what is the disadvantages and advantage for fast fashion and the last question is about the horizontal and vertical

Zara International is considered a high end clothing store that is affordable. Due to its quality in fashion, low prices and immediate availability, popular stores such as Gap and H&M fail to keep up with Zara’s success. Zara’s well known tactic of fast fashion has separated them from their competition. The ‘fast fashion’ objective is to distribute top trends of fashion within the runway to customers by selling them in local stores. Zara has been able to achieve the fast fashion perspective by hiring approximately 200 people that will assist in getting these trends out in stores within a matter of weeks.

ZARA is an understood Spanish garments brand well known for its high-speed answer, which is considered as a win variable for the organization and obtaining competitive edge over its rivals around the world. Style is about new and in vogue garments, ZARA's stock administration and distribution strategy are the key components behind its high-speed answer procedure. ZARA has outlets in 86 nations, including Europe, United States, Middle East and Asia. In 2012, Inditex the guardian organization of ZARA has asserted US$20.7

Zarawas able to catch a trend while it was hot thus customers were willing to pay a higher premium for the product increasing their gross margin. In addition, Zara did not have to commit to its suppliers several months in advance of a season on the style and amount needed unlike its competitors. Zara was able to create in smaller batches, thus decreasing risk by limiting the amount of inventory on hand. The downside of owning and controlling production is that it often leads to higher costs of labor compared to labor in developing countries (south-east Asia). To lessen the costs, Zaradecided to outsource the main commodities of apparel such as the undyed fabric, buttons and zippers. Because these were basic ingredients to any apparel it did not affect the final product and cut down cost. Also, 85%-90% of their styles were standard across stores and countries which benefited from economies of scale. Lastly by playing both role of manufacturer and retailer Zara is able to get profits on both sides. The short-lead times provide flexibility to Zara; however, Zara needs to provide the consumer with the latest trends in order to increase profitability. Therefore, Zara invests heavily in their product development teams compared to their competitors. Extensive continual market research was performed on current trends from fashion shows, universities and key trend

Retail is a fast-paced environment that is always changing and adapting to new trends and styles. This is why we see “fast fashion” stores such as H&M, Gap, Zara, Forever 21 and Uniqlo, cycling through the clothing they have in their stores very quickly. Because of the constant change in fashion trends, such stores are in an extremely competitive battle to be the most successful in their field.

The purpose of this paper is to explore how fast fashion affects markets and environments, while attempting to increase awareness of

‘Fashion industry is characterised by short product life cycles, volatile and unpredictable demand, tremendous product variety, long and inflexible supply processes and a complex supply chain.’

An additional method Zara utilizes to ensure the right product is produced is to constantly monitoring the sells at every store in real time through the use of computers. Sells managers are the individuals that play out this strategy. When the clothing sells well or does not sell well, they can quickly let the designers know to swiftly create new designs (“Case 3-4. Continued Growth for Zara and Inditex”, 2013). However, the competition is changing their strategies in an attempt to successfully compete with Zara. The methods that Zara has implemented to ensure fast fashion is truly fast has pressured the competition into reducing their lead times on stocking their stores (Hayes & Jones, 2006).

The world has become fascinated towards the fashion. The first thing need to be considered is Fashion; it can be behavior, implementing new ideas on clothing’s, hairstyle, decorations and so on which are automatically linked to our day to day activities. In today’s context, fast fashion has become a trend to a fashion industry patterns yet delivered utilizing less costly materials to guarantee a low cost tag. Many companies have been successful and unsuccessful to earn a trust from their customer. For the matter of success level it depends on how innovativeness they are and also applies the principle of supply chain and logistic management activities for the growth of their