Zara is a “Fast-Fashion” apparel company owned by Inditex of Spain, the world’s largest clothing retailer in 2011 with $19.5 billion revenue (Forbes, 2012). For the past years, Zara’s supply chain model has been envied by other players in the fashion industry because of its agility. This case analysis briefly discusses how Zara translates its supply chain design to a value chain proposition to the customers.
Value Chain Strengths
Zara offers fashionable clothes with affordable price and reasonable quality that renew quickly. Women, as the main market segment, have the tendency for refreshing their wardrobe collection as quickly as the fashion trend change. Thus, the ability to provide unparalleled rage of new styles is making Zara’s product can be classified as order qualifier. However, the capability of changing the collection in each store very frequently is creating an order winner characteristic that create competitive advantage from its main competitors.
Zara’s supply chain design has been based on agility where the lead time between design creations to store display can be done within 15 days. In contrast, traditional industry model typically requires approximately 9 months for doing the same thing. Vertical integration business model that limits outsourcing is giving a better control for Zara to keep the rhythm of the chain and to maintain reasonable output quality. In 1786, Thomas Reid came with the idea that a chain is only as strong as its weakest link. Consequently, the ability to set the pace of plan (design), source, make, and deliver will support all related players to shorten the lead time by eliminating unnecessary waiting time.
Value Chain Weaknesses
In principles with lean manufacturing practice, Zara produces standard size for all its stores across the globe. For customers who have normal body size, this means that they enjoy cheaper price due to some extent of economies of scale. In the...