Operations management
Operations management is the activity of managing the resources which produce and deliver goods and service (Slack etal., 2010). Operations are seen as one of the many activities that are performed in an organisation. Operational functions can be explained as that part of an organisation dedicated to the production and delivery of goods or services.it means every organisation takes up operational activities as every organisation is carrying out production or delivery of goods or services.
Below we are going to assess the operational methods and strategies adopted by Zara to cope up with the business of fast fashion and yet lead in its business giving maximum satisfaction to its customers. Introduction to Zara’s
Zara, the belonging to the Inditex SA, being the Spanish retail group, has maximum profits for the group, with first store in La Coruna, Spain, eventually now the headquarter city for its global operations. Now operating in over 400 cities spread over the five continents, approximately into
45 countries with 53 stores all over the world. In this journey of expansion their focus has always been towards the core of fashion philosophy of creativity and design quality altogether to the market demands yielding profitable results. Zara’s business model consisted of three main goals
● Operation system that requires short lead times
● Less quantities produced for less inventory risk
● Increase in the choice of styles for customers
Mr Ortega the CEO of the Inditex, the parent company of Zara, once said that the secret to retail success is to 'have five fingers touching the factory and five touching the customer'. (Slack &
Lewis, Operations Strategy, 2008). For Zara customer is the heart of their business.
Zara’s competitive advantage
In this century where most of the retailers depend for manufacturing to be outsourced from developing countries, Zara is one Spanish company making heavy profits and at a great success by doing things differently.
Most of the retailers today concentrate their money on advertising campaigns to develop their brand image, where they lack is in their control on the sub-contractors leaving open to accusations of sweatshop labour, unethical practices which remain uncovered at the companies carrying out their production.
Campaigners against the sweatshop practices ask about the economics to outsourcing the production and tend to point at an example of Zara for how they do things aptly. “Control over production facilities was given up by major American firms coincident with the shift of most shoe and apparel production to authoritarian countries. Most consumers are now aware of the untoward results of this major change," Jeffrey Ballinger, a Harvard researcher and director of pressure group Press for Change told CNN.
"Zara, on the other hand, has turned control over garment factories into a competitive advantage," said Ballinger.
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Zara is not only into sales but also into designing, production and distribution. It never has had any advertising campaign still manages to own more than 1,000 shops.
Zara’s main competitive advantage is that it can react to the customer and market demands very rapidly because of its self-production capability. Whereas other brands like Gap or H&M, take almost up to 9 months just to get new stock to their stores, whereas in this case Zara takes only 2 to 3 weeks to announce its new line.
Its success as described " possibly the most innovative and devastating retailer in the world
," by
LVMH’s fashion director Daniel Piette
.
"It's really quite exciting to see a new model like this -- one that actually breaks all the rules of the apparel industry as it has developed over the last two decades: contract out all production and spend obscene amounts to advertise your brand," added Ballinger.
Zara’s success lies in its total control over every part and stage of its business.it designs does production and distribution as well on its own. Everything
