Zara- Rapid-Fire Fulfillment

Internet fashion retail is a highly competitive market, the trends in the industry and company’s success relies on customer’s needs, which change constantly. “Competitive advantage is the delivering of superior value to customers and, in doing so, earning an above average return for the company and its stakeholders” (McGee, Thomas & Wilson, 2005, p.207). In order for ASOS to stay on top of its competitors, the trends in the industry have to be monitored, so that further they can be strategically translated in developing new products, to gain customer satisfaction.

Zara is a clothing retail store for women, men and children, concentrating sixty percent of their effort to the women clothing market. Besides retailing, Zara also designs, produces, and ships their lines of clothing to their Zara stores. Zara 's corporate concept is to offer fashionable, trendy, designs at a reasonable price. The key to their corporate success is to offer the latest trends and fashions before their competitors. They believe that they are in the fashion business, not the clothing business. As part of this corporate concept, the stores try to hold very low levels of inventory, often having their entire inventory out on display, in order to sell out and make room for the

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.

W.C. Benton, J. (2010). Purchasing and Supply Chain Management (2nd ed.). New York: McGraw-Hill Irwin.

There are several ingenious steps taken by Zara that proves both profitable and unprecedented. Zara has used technology to revolutionize their business, from buying the unprocessed cloth to determining which color die to use and what to make with that cloth. The technology process continues on the manufacturing lines and all the way to the final sale. But it does not stop there, it goes beyond the point of sale to question the reasons why a purchase was not made after a client expressed an interest in an item. The point of sale system provides real time data which is given immediate attention.

From only a single apparel store in La Coruña, Zara domain has since extended to more than 50 nations across the globe. While different competitors from multi-national brands in the business crush their overall revenues by assembling in mass and bringing down costs, Zara comprehended that the majority of the clients are enthusiastic

Zara has historically made minimal investment in IT. Its competitive advantage over other competitors is not because of its IT infrastructure but because of its integrated supply chain and faster response to the changing customer taste. Zara’s approach to IT was consistent with its decentralized decision making process. It has proved to be remarkably stable, effective and easy to roll out and maintained over time. But in order to maintain business competitive advantage, a cost-benefit analysis is must before making any decision to invest in up gradation of IT.

Zara produces of-the-moment fashion and has developed a very successful vertically integrated company which can design, manufacture, and distribute garments to retail stores in as little as three weeks. Zara 's target market is comprised of urban, fashion-conscious consumers who shop frequently for the latest trends. Currently under debate is a proposed upgrade to the POS system throughout the Zara chain. With over 550 stores, this would be a huge undertaking for Inditex, Zara’s parent company. The current DOS-based system meets the needs of the company, and despite some of the benefits of upgrading, we feel it is best to continue with the current system in place.

This speed makes everything possible- updated pricing, the most relevant designs to customer desires, re-ordering or stocking the store, and more. Salespeople at the stores use PDAs to send customer feedback directly to headquarters multiple times a day; their PDAs show how items rank by sales (Investile). They try to talk with the customers and find out what they like or do not like about a product, and track the items that are tried on but left in fitting rooms. They also have a Point of Sale system which sends record of products that are sold or returned also directly to the headquarters (Strategic). This data is helpful not only in assessing which products are good and bad, but also what to re-order or mark up, how many clothes they need to be shipped in the next batch, and take note of the type of clothes that the store in that particular geographic area sell best to ensure they are sent the clothes that will sell best in that location. Each store manager has weekly conversations with store managers and market specialists. The store managers also send all of their collected information multiple times a day to be used for future designing and pricing, but they are empowered to do the ordering themselves (Zhelyazkov); this empowerment makes for more invested managers who are happier and care more about the success of the company. Clearly Zara makes it a top priority for their customers to be heard as soon as

International Marketing- ‘Zara: the Spanish retailer goes to the top of world fashion’ Case Study

Initially, the efficient supply chain of the business is a good method to enhance its competitive position. Supply chain refers to those associated operations and activities for converting inputs to outputs. Such activities contain issues of operations, marketing and supply (Han, 2008). High level of combination within the chain is the best method to get competitive benefit. Zara Company achieved matchless success in having powerful supply chain. This company owns numerous branches all around the world. In this essay, we will discuss supply chain of Zara, Zara’s Fast Fashion distribution system, and role of vertical and horizontal analysis in making competitive advantage for business.

The internet has been the easiest way to copy and reproduce all designs instantly just after a show trade ended. Retail organisations such as Zara are among companies which reproduce designer’s trend with low cost material and sell them cheaper. Zara stores provide new collection to their customers for shorter period and replaced them by another new collection; this means they manage fewer inventories. There is a rapid flow of information that circulates across the channel of their supply chain and logistics system from customers to all store managers to their market specialist passing through distributors to the warehouse responsible, (Carugati, Liao, & Smith, 2008). Rushton, Croucher & Baker (2010, p.23) highlighted that for a global company to perform efficiently Just-In-Time approach, there would be a desire to reduce lead times as well as eliminate unnecessary stock and waste within their operations.

Zara and Benetton’s supply chain both share some common components within their supply chain models, but a few distinguishing factors make them their own. All supply chain models must include planning, designing, maintenance and control of all materials and information in order to efficiently satisfy its customers’ needs and wants (Schroder, 2000). Zara being known for their ‘fast fashion’ is claimed to take only two weeks to develop a new product and have shipped to stores, and ready for shelves. Zara is a vertically integrated retailed, meaning that their supply chain is owned by their company and usually each member of the supply chain produces a different product or service. Unlike other apparel retailers, Zara controls most of the steps included in their supply-chain, including designing, manufacturing and distribution of the products. Zara uses a just-in-time (JIT) system, with this model it allows the company to have self-containment throughout the stages of materials, manufacturing, product completion and distribution.

“The finest supply chains aren’t just swift and cost effective, they are also agile and flexible and they ensure that all their companies interests stay aligned.”- Hall L Lee

The fashion retailer has become one of the most successful fashion companies in the world – based on their unique way of manufacturing and distributing their clothes. As opposed to most fashion companies, Zara never manufactures lines of clothing and hope that the market will like it. Instead, they have highly efficient method for tracking what the market wants to buy, getting it into their factory, biasing their line of production accordingly, and distributing back to the stores.  This behavior/technology differentiates them, as they are able to meet their marketers’ needs rather than promoting