ZARA become expanding too fast in international market, but doing so company needs to increase the capacity of production, they started employ original equipment manufacturer(OEM). This leaded to low quality due of using lower qualification by OEM. For example in China they want to have biggest market share as foreign cloth maker with low cost, attracting colleague students and young people; but their product were failed frequently in the quality test made by government , out of 57 product of ZARA were tested and 20 were failed(35% failure). Below table shows the result of the quality test done in Beijing and form table we can see the different between labeled and actual material used in product, small percentage can play major effect in profit for example just reducing wool which is expense and replacing by terylene which is cheaper can have impact on profit.
ZARA has to keep its image same as it's known worldwide, not compromising they quality over profit, for this situation they can overcome by doing quality inspection for raw material during receipt time, also during production by taking some samples for testing to ensure standards are met, and same thing to be done for finish goods, doing so its prevent such problem from occur in future in other countries they are planning to open branches. Company if adopted this strategy will benefit by keeping same image, attracting more customers and same time its less costly then reverse logistic if material has quality issue, they have to take back and shortage of their product will happen because they have to re-produce and consider other cost associated with this process.
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