Case Study on Zara Company

Introduction

The Agile Supply Chain is a strategy in the fashion business which will boom massively the sector. It will make all the people in the world accept fashion as a way of life. An example of the fashion industry is Zara considered to be one of the biggest and we will look at a case study in Zara company.

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Zara Case Study

Zara is a company which is involved with clothes and fashion stores which was established in 1975. a Spanish set called Inditex owned by Amancio Ortega was the creator of the company. The competitors next included Bershka, Zara home, and Zara kind. During the last forty years Zara has had massive profits and was ranked the third largest retailer I the whole world Zhang, 2008). Zara headquarters are in the region of A Coruna, Spain and it has three thousand designers in which they are able to design 40000 items per year. ten thousand of those items are designated for manufacture. Comparing to its competitors 50% of its making is in all the continents mostly Europe and Asia

These facts gave an opportunity for the company to expand its profits and sales. By reaching the year 2010 since its start the group owns 4907 stores in 77 countries. On this information about Zara makes it be the pioneer of alert source chain and most businesses researchers explain its massive success including (Zhang 2008). The researchers suggest that this stock chain procedure in the company Zara can be divided into four parts including organizing the product; producing and procurement; product supply and sales and feedback

Product Organization

Zara items are so exceptional in such a way that they are simulated from big end products. The biggest role of Zara creators is not an invention of the product, but its reorganizing existing products fashion elements. It is moving them into new classes of products, they put more effort into interpreting fashion rather than creating. They follow some few steps to come up with the product. First, they collect samples from different sources for example in part-a-porters, Data is taken from streets, clubs and lifestyle hotspots become a source of production and not from mood boards or predictions. Zara only uses prediction when it is ordering the fabrics. The textiles are the raw supplies whereby they need to be available when the high season starts.

Competence is key in smearing this process in which the clothes are purchased without any colour giving the company flexibility to play around with colours taking into consideration on the tendencies. Many of the products are held as work in process(Cai Feng 2009). Zara has a major role in balancing its in-house and subcontracting events. Taking, for example, the heavy labour task like sewing and coloring are subcontracted to corporations near the head office. These businesses have bad status when managing their workers. Activities like the design and computer-aided fabric cuts are done in-house whereby they may help the agility discovered. Clothes are accumulated and reimbursed from the sewing factories and later they are dispersed to Zara stores. They also are able to use knowhow in such as the laser barcode scanners which pick and sort over 80000 pieces of clothes(Zhang, 2008)

Procurement

This is an important section in the process, whereby every organization has to do. Every organization needs every time to obtain supplies which can include raw materials, components, standbys, apparatus's, services and consumables. Procurement is so important for the organization because of the following reasons: Material change, the agile supply, and the global markets can provide various resources at a diverse price. As a result, it makes the ultimate product competitive cheaper and more attractive to the customer. Customer demands is another reason, companies have mixed their products to meet everyone needs. Zara is a good example whereby they manufacture small amounts and wide variations. This makes the stores being updated with different designs every week and it cuts down promotion and reductions

The other reason is price variation due to new technologies coming up every time allowing prices to change depending on demand and supply. These new technologies take part in allowing monitoring of the process. Procurement also is not a cost centre it's a value-adding process. Manufacturing materials, on the other hand, are of essence for them to be distributed on time with the accurate superiority needed also at the right place, disorder, and the right total price. The source chain organisation has its emphasis on procurement lastly subcontracting and outsourcing tends to become cost-effective.

Purchase and Production

There is management in supplying chain operations and they are three aspects which include exploiting properties used, diminishing records and lead times. The highlighted aspects affect pricing, client approval, and incomes acquired by the company. It is argued that production lot in Zara can remain kept as minor as likely if a space for extra capacity in products needed in production (Zhang, 2008).He also argues that big orders result to the big increase in the inventory. There are two factors in manufacturing product which are complexity and doubt. Zara is producing style clothes of low difficulty but highly doubt. Zara is minimizing the uncertainties focusing on a limited range of the basic shapes

Production Distribution

Promotion success was based on big names and advanced know-how( Cai Feng,2009). The ASC can take part in responding to the changeable demands. The changes improve rivalry on time. The source chain can be influenced by the business and the delivery time influences the company's image. When the company product is not available on the shelf tends to make the customer turn to the competitor's products. This results in twenty percent of them not coming back. The point is short delivery increase market share.

Considering Zara, it is the pioneer of fashion having its weekly supply of their products to the stores with new fashion always. Zara makes sure they meet the demands, new items in store keeps customers buying every time consistently and finding new goods to buy. The agile supply chain is critical in the fashion business, to supply correctly retailers should look at variables such as weather conditions.

Sales and Feedback

Constant communication between the customer and the supplier ensures the best sales and feedback. A customer also has a role to play other than buying. It can be to treat the supplier well, inform them, being informed about the process followed. By doing this fewer complaints will emerge and there will be a long-term partnership. This is the case in Zara whereby the facts are clearly done. Zara creators ruck the facts on sales and account from every store every day of the week to keep informed of their situation. Shared Situation Alertness by sullTurnocni is the process used. The process has three steps which are observing the raw data, making logic of raw data and finding the supposition (Sull and Turconi,2008).

Results

Zara case study has shown good results which are in subsections the include: Consumer-driven process- companies with agility are more customer-focused, meeting their needs even producing satisfying products. Zara is seen as an agile company it has the close connection with customer and designers through gathering information.

Impact of agility on the supply chain -it was introduced to respond to dynamic markets and customer demands. It affects the supply chain that's the reason that agile supply chain and fashion emerged. In response to consumer demands, Zara has consistently advanced an well-organized agile stock chain, with the designers, consumers proficient's in one place promising full elasticity and quickness.

Conclusion

In conclusion, we have found out that the system (ASC) has brought good results in the company Zara. This made the company be the third best, through close communication with customers and its designers and meeting market demands. It also shows that other companies can use the process to its maximum.

References

Tiplady, R. (2006). Zara: Taking the lead in fast fashion. Business Week, 4.

UmitBititci (2010). Supply Chain Operations course hand out papers, DMEM

Zhang, Q. (2008, October). Analysis of the successful case of the efficient supply chain in ZARA. In Wireless Communications, Networking and Mobile Computing, 2008. WiCOM'08. 4th International Conference on (pp. 1-4). IEEE.INTRODUCTION