Analysis: Zara's Supply Chain
2.1 Efficiency
Zara’s supply chain is efficient mainly in terms of time and inventory management as discussed below.
Zara allows store managers to order twice per week. The shipments are then prepared and delivered in least possible time. The products are displayed in stores on the same day they arrive. This allows Zara to reduce the lead time whenever required. (Benjabutr, n.d.)
Moreover, Zara is able to get a new product from just a sketch to a store in 4 to 6 weeks. This is considered to be unexpectedly fast and this needs a whole level of ability to quickly respond to new fashion trends. This alertness and supply chain process is central in supporting Zara’s core strategy (Gorrepati, 2016).
In addition, Zara manages to control its inventory …show more content…
They do 50 – 60 percent of their manufacturing in advance versus 80 – 90 percent by competitors. So Zara does not need to place big bets on yearly fashion trends (SCM Globe, 2016).
2.2 Effectiveness
Zara has adopted a strategy of scare production, which encourage consumer to shop more frequency for new design. This strategy allows Zara to attract more consumers, build customer satisfaction and increasing level of their loyalty. Nonetheless, Zara is able to sell most of it products at full prices and at low markdown prices which result in less inventories. Therefore, Zara could gain high profits margins.
Frequent replenishment allows Zara to continue supply new design as consumer desire. This replenishment is one of Zara inventory management strategy where all stores are well managed. This means each store keep update the stocks and replace with high demand for goods base on consumer desire in geographically. With this effective strategy, brought greater customer satisfaction and gains more market share globally.
2.3 Risks in Zara Supply Chain …show more content…
It has been able to adapt to the fast fashion trends (Mozzi..., 2015). This is why Zara ends up producing about 450 million products annually.
Moreover, Zara’s competitors do wish to adapt an efficient and effective supply chain similar to Zara but they find it difficult to adopt. According to Economist (2012), one of the executives at Gap has answered by saying “I would love to organize my business like Inditex but for this we must rebuild our company and start from scratch”. However, a consultancy, Isabel of Planet Retails reports to have said that retailers such as Gap and George are looking further to move their production hub from Asia to somewhere near the home (Economist, 2012).
The supply chain management strategy is a competitive advantage of Zara over its competitors. This is due to one of the biggest advantages of Zara's supply chain strategy is being able to react quickly to all fashion trends and supply customers latest fashion outfits as soon as in few weeks'
Zara’s supply chain is efficient mainly in terms of time and inventory management as discussed below.
Zara allows store managers to order twice per week. The shipments are then prepared and delivered in least possible time. The products are displayed in stores on the same day they arrive. This allows Zara to reduce the lead time whenever required. (Benjabutr, n.d.)
Moreover, Zara is able to get a new product from just a sketch to a store in 4 to 6 weeks. This is considered to be unexpectedly fast and this needs a whole level of ability to quickly respond to new fashion trends. This alertness and supply chain process is central in supporting Zara’s core strategy (Gorrepati, 2016).
In addition, Zara manages to control its inventory …show more content…
They do 50 – 60 percent of their manufacturing in advance versus 80 – 90 percent by competitors. So Zara does not need to place big bets on yearly fashion trends (SCM Globe, 2016).
2.2 Effectiveness
Zara has adopted a strategy of scare production, which encourage consumer to shop more frequency for new design. This strategy allows Zara to attract more consumers, build customer satisfaction and increasing level of their loyalty. Nonetheless, Zara is able to sell most of it products at full prices and at low markdown prices which result in less inventories. Therefore, Zara could gain high profits margins.
Frequent replenishment allows Zara to continue supply new design as consumer desire. This replenishment is one of Zara inventory management strategy where all stores are well managed. This means each store keep update the stocks and replace with high demand for goods base on consumer desire in geographically. With this effective strategy, brought greater customer satisfaction and gains more market share globally.
2.3 Risks in Zara Supply Chain …show more content…
It has been able to adapt to the fast fashion trends (Mozzi..., 2015). This is why Zara ends up producing about 450 million products annually.
Moreover, Zara’s competitors do wish to adapt an efficient and effective supply chain similar to Zara but they find it difficult to adopt. According to Economist (2012), one of the executives at Gap has answered by saying “I would love to organize my business like Inditex but for this we must rebuild our company and start from scratch”. However, a consultancy, Isabel of Planet Retails reports to have said that retailers such as Gap and George are looking further to move their production hub from Asia to somewhere near the home (Economist, 2012).
The supply chain management strategy is a competitive advantage of Zara over its competitors. This is due to one of the biggest advantages of Zara's supply chain strategy is being able to react quickly to all fashion trends and supply customers latest fashion outfits as soon as in few weeks'