Zara's supply chain: Case Study

It is becoming apparent that the ever changing environment in the global marketplace requires a swifter response time from businesses and their supply chains. The era when production was moved overseas, so businesses can take advantage of low-cost labor is coming to an end, because businesses are not only competing on price but also on time. The owner of Zara, a Spanish clothing store knows this first hand, and has turned supply chain management on its ear, making his company the “envy of the industry” (Ferdows, Lewis, & Machuca, 2004).

Supply chains must be managed to coordinate the inputs with the outputs in a firm to achieve the appropriate competitive priorities of the firm’s enterprise processes. The Internet offers firms an alternative to traditional methods for managing supply chains. A supply chain strategy is essential

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.

Quick to react to market trends due to its supply chain design, operation & delivery

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.

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.

2. Richard M. Johns (2006). The Apparel Industry. 2nd ed. UK, London: Blackwell Publishing Ltd.. 1-124.

if supplier doesn’t supply on time may incur the company the loses of the clothes out of date fashion . Huge number of tons will be consumed faster than before because of this fast fashion. This was the possible disadvantage of the fast fashion distribution system. There are a lot of advantages that offset the disadvantages of the fast fashion distribution system. We may say here fast fashion requires innovation and brainstorming to get new designs overtime to be

Based upon his ten years research on supply chain issues in diverse industries such as food, fashion, apparel and automobiles he devises a framework which will help

‘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.’

The clothing industry, as one of the most globalized industries in the world (Bonacich et al 1994), is currently undergoing a restructuring, especially the fast fashion sector. Fashion markets are synonymous with rapid changes and short product life cycles. Therefore, changes in consumer demand for newness and fashion trend force the emergence of ‘fast fashion’ strategy in retailers like Zara and H&M and shifts in the focus of competitive advantage from price towards quick response. That is to say, clothing firms, which are adopting global or offshore sourcing strategy, are not considered to have more competitive advantages as before.

The clothing industry in South Africa has always been an industry where there is intense rivalry between the companies. There are main companies in the industry namely Edgars, Woolworths Truworths, but there are smaller retail companies that enter the market that can satisfy the demand of the consumer’s better.

This resulted in close communication between the customers and the designers, and the ability to ship the required items within one week by catching the sales pitch. All this proved that ASC is why competition between organizations has improved. The supply chain is not in a translated agile process of Zara, but in fact the whole organization is agile and very efficient. Using quick response, Zara aims to reduce both the excess inventory consistency in the supply chain and the risk associated with the forecast, as product specifications are not finalized until the point of delivery. As Zara's success rate increases, customer satisfaction increases, market opportunities increase, total risk decreases, and total costs decrease it can be concluded that simultaneous success can be achieved by ensuring that many advantages are

Over the years, the competition landscape for most companies has shifted from the highest-quality, lowest priced product or best performing product to the ability to respond to market needs quickly and get the right product at the right time to the right customer. This has in turn forced organizations to compete with their supply chain. Understanding supply chain management and putting this knowledge into practice has become a mandate to improve supply chain relationships in the entire world.

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