Zara Case Study

Topics: Supply chain management, Management, Supply chain Pages: 8 (2335 words) Published: April 26, 2015
Supply Chain Management Strategy of the Retail Brand Zara

Executive Summary
The purpose of this report is to understand and analyze fashion retail brand Zara’s secret behind its successful supply chain management. Zara has been the pioneer in agile supply chain management and for popularizing the trend of fast moving fashion. Therefore, with the help of this example, agile distribution management has also been discussed in this paper. Additionally, computer hardware brand Dell and Australia’s leading retail chain Myer have also been studied in order to understand their supply chain transformation journey. Zara’s Supply chain strategy has been compared to that of Dell and Myer. Dell adopted just in time inventory model in order to keep up with the changing customer demands and has seen success with this strategy. Myer too adopted lean transportation and distribution processes post acquisition in order to sustain its business and grow. Lastly, Zara’s strategy and a Fortune 500 Company’s supply chain strategy have been discussed. The Fortune 500 Company chosen is the global fast food chain McDonalds as its SCM is a huge success story and classic case worth researching on. The latter part of the research paper provides post analysis conclusions and recommendations for companies to relook at restructure their end to end supply chain processes.

Table of Contents
Supply Chain Management Strategy of the Retail Brand Zara1
Executive Summary1
Introduction3
Zara’s success story in Logistics and Supply Chain Management3 Comparing Zara’s Supply Chain Strategy with Dell5
Comparing Zara’s Supply Chain Strategy with Myer5
Comparing Zara’s Supply Chain Strategy with McDonalds (Fortune 500 Company)6 Conclusion7
Recommendations7
References8

Introduction
When the retail brand Zara was launched, it did not aim at aping the existing retail business models of outsourcing at lower costs and selling at higher margins. Instead, it had its own unique and game changing strategy. By introducing highly fast moving fashionable products at nominal prices, Zara has been a huge success in every market that it has entered in. Behind this success is a systematic and agile supply chain strategy and this research paper talks about the same. The concept of agile planning is not new to companies, however, Zara takes it to an all new level. They roll out new designs very frequently and update their store collections twice in a week in all its stores. They have a policy of keeping low inventory and producing only a limited quantity of an item, thus creating an artificial scarcity and demand of the products. While most retail stores rely on sale seasons to clear out their stock, Zara believes in updating fashion fast and keeping stocks minimal so that the products go off shelves fast even during non-sale seasons. Zara is not the only brand that has cracked the code for sound logistics and supply chain management. Companies like Dell, Myer and McDonalds have also invested human capital and other resources in optimizing and tailoring their processes in order to suit the ever changing customer needs and business demands. This research paper will discuss the strategies of these companies and compare and contrast how each business has tailored their processes. Zara’s success story in Logistics and Supply Chain Management The fashion brand Zara was established in 1975 by Inditex, a Spanish group owned by Amancio Ortega. Over 3,000 designers that have been hired in house by Zara are responsible for creating over 40,000 designs per year of which 10,000 shortlisted per year for production. Unlike its competitors, which outsource their production to countries in South America and Asia in order to avail benefits of cheap labor, Zara carries out more than 50% of production in Europe (Dutta, 2002). Zara has been credited for mastering Agile Supply chain management by introducing fast moving fashion in over 77 countries and 4900 stores across the...

References: Davis, M., 2010. Case Study for Supply Chain Leaders: Dell 's Transformative Journey Through Supply Chain Segmentation, s.l.: Gartner.
Dutta, D., 2002. Learning from Zara: Case Study, s.l.: Third eyesight.
Dutta, D., 2003. retail at the speed of fashion part II, s.l.: Third eyesight.
Game-Lopata, A., 2009. Myer transforms. [Online]
Available at: www.logisticsmagazine.com
GS 1, 2010. Streamlined Myer It 's Supply Chain delivers results, s.l.: GS 1, Australia.
tandlnews.com, 2012. Myer’s secrets of supply chain success. [Online]
Available at: http://www.tandlnews.com.au/2012/01/17/article/myers-secrets-of-supply-chain-success/
Vitasek, K., 2014. Trust and Collaboration: McDonald’s Supply Chain Strategy, Tennessee: Global Sourcing Council.
www.fortune.com, 2014. Fortune 500 2014. [Online]
Available at: http://fortune.com/fortune500/mcdonalds-corporation-106/
www.supplychainopz.com, 2013. 7 Rules of Fashion Supply Chain. [Online]
Available at: http://www.supplychainopz.com/2013/09/7-rules-fashion-supply-chain-management.html
Zhang, Q., 2008. Analysis on the Successful Case of Efficient Supply Chain in Zara, s.l.: IEEE.
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