Section Contents Pg# About Zara
TASK 1 1.1Using examples, explain the importance of effective supply chain management in achieving organisational objectives. 1 1.2Using examples, explain the link between supply chain management and business functions in the organisation 2 1.3 Using examples, discuss the key drivers for achieving an integrated supply chain strategy in an organisation 2,3
TASK 2 2.1 Evaluate the effectiveness of strategies used by an organisation to maintain supplier relationships. 4 2.2 Use information technology to create strategies to develop an organisation’s relationship with its suppliers? 4 2.3 Develop systems to maintain an organisation’s relationship with its suppliers 4,5
TASK 3
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TASK 4 4.1 what are the many roles of logistics in supply chain management in an organisation 8 4.2 Evaluate procurement practices in an organisation 8,9 4.3 Discuss the factors that must be considered when improving logistics and procurement practices in an organisation 9
TASK 5 5.1 Plan a strategy to improve an organisation’s supply chain 10 5.2 Assess how a supply chain improvement strategy will benefit overall business performance in an organisation 10,11 5.3 List two potential barriers that the organization needs to overcome when implementing a supply chain improvement strategy 11
About Zara:
Zara is one of the leading company that introduced the idea of fast fashion within the apparel industry. Within a short span of few decades their key selling points are the speed and responsiveness for which there unmatched design, manufacturing and distribution systems existed. Precision in terms of timely order generation from all its stores and then production to timely delivery back to all stores has become possible ensuring satisfied profitable customers. Thus we can safely say that its competitive edge is its supply chain.
Task
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With little marketing, mainly through word of mouth and the small production batches availability that draws customers more often in stores then rest of the market players they have been able to achieve customer loyalty and satisfaction. In apparel industry zara have logistics and supply chain management like no other and yet it is the reason of their success. With central control on decision making and production to procurement the delays and cost hikes that are possible at any other place is minimized
3. How can supply chain design and integration help John Wolf reduce investment and space requirements while maintaining adequate service levels?
In the following sections I will propose a supply chain strategy which will align company goals and initiatives increasing efficiency and driving down cost thereby creating a sustainable competitive advantage through the implementation of a synergistic supply chain strategy.
List and explain all aspects of supply chain management. pg 416; week5 lecture, pg 4;
The business idea of Zara is to link customer demand to manufacturing, and to link manufacturing to distribution. And based on this general idea, Zara has several essential elements for its business model. First, speed and decision making, which means that in the external level, Zara need to respond very quickly to demands of target customers, and always keep in style. While for the inside, Zara treasure intelligence and judgment of common employees who enjoy a great deal of autonomy. Second, its marketing, merchandising and advertising strategy. Zara does not spend on virtually advertising, while it spends heavily on stores, and no selling online because of
Another way there strategy contributors to their success is that they have the capability to keep a significant amount of product in home soil in there won factories and reserve approximately 85% of their capacity for seasonal adjustments this way they will be able to rapidly respond to unexpected trends in the industry. Additionally they use foreign factories as many other companies do as cost is much cheaper which allows production to increase and distrusted accordingly, however for fast fashion items Zara produces in
4.Given the 4 areas of the company, choose some supply chain processes and suggest appropriate performance metrics.
The Spanish retail chain Zara has unique supply chain management practices that enable it to gain a competitive advantage over other fashion retailers in the industry. Zara’s rapid response time enables the firm to quickly respond to changing fashions while deliberately under producing products. This strategy, which is supported by competencies in logistic management, design and information systems, allows the company to maintain less inventory and higher profit margins and is a key factor to Zara’s success. The firm should continue to add value by seeking new opportunities to expand in the retail market and maintain their sustainable growth.
Zara’s strategy is to offer cutting edge fashion at affordable prices by following fashion and identifying which styles are “hot”, and quickly getting the latest styles into stores. They can move from identifying a trend to having clothes ready for sale within 30 days (whereas most retailers take 4-12 months). This is made possible by controlling almost the whole garment supply chain from design to retail.
The basic strategy for fighting competition is to attract buyers at lower prices, more unique designs, high-quality design, efficient customer service and solid image brand. Thus bargaining power of buyer for apparel industry is high as the products falls under the basic needs in human lives. There is no much difference in terms of products offered by the apparel company, so if buyer is unhappy with the product or service they can easily switch to another brand. Thus, Zara are trying to strengthen its position in the market by using their unique strategy by giving priority to buyer to meet their special needs.
The supply chain from raw material to consumer it's from design and production to distribution and retailing. Zara has unique and rabid supply chain today. Design and production are internal process and are done in company. At Zara's headquarters, there are creative teams of three hundred professionals doing a design process. They responsible for design the designs which will satisfy customer needs and keep pace with fashion. Zara can take a product from concept through design, manufacturing, and store-shelf placement in as
The core concept of Zara 's business model is they sell "medium quality fashion clothing at affordable prices", and vertical integration and quick-response is key to Zara 's business model. Through the entire process of Zara 's business system: designing, sourcing and manufacturing, distribution and retailing, they presented four fundamental success factors: short cycle time, small batches per product, extensive variety of product every season and heavy investment in information and communication technology. These four elements are involved in every aspect of the business.
Supply chains represent the procurement, production and distribution activities of an organisation. Within a supply chain, these activities are viewed as linked and reliant on one another to produce the final outcome. It is believed that if one component of the chain fails, the whole chain is broken and product/service delivery goals will not be achieved.
According to our class text Supply Chain Management’s goal is to create fast, efficient, and low-cost network of business relationships to get a company’s product from concept to market. In order to understand the goal we must know that the supply chain is the process the raw materials of a product go through in order to be available to the consumer. The relationships that the business creates are needed in order to create the product, each process the product goes through creates value, the supply chain is often called the value chain. Internet technologies are increasingly making the supply chain management process much more efficient and worth the initial investment. The supply chain management life
6. In your opinion, what are the key lessons from this case study for supply chain managers?
3: How can supply chain strategy help John Wolf reduce investment and space requirements while maintaining adequate service levels?