Zara: Supply Chain Management and Zara Essay

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OPM Homework 1

1. Zara is responsive by the way it is able to quickly respond to their customer expectations. According to the article, Zara is able to design, produce, and deliver a new garment and put it on display in its stores worldwide in 15 days, which is an amazing result of its ability to know what their customer wants. This is done so by the transporting design ideas derived from their PDA’s, fashion catalogs, and the ‘buzz” through the supply chain where they constantly exchange information and communicate with each other about product designs. These product designs are then rapidly produced and shipped in small quantities. This first come first service basis technique encourages shoppers to keep going back to the store because they know the store will run out of their size quick. The clever idea of a desired stock-out and brand new styles arriving with just in time systems, teaches shoppers that they will always have new and fresh items to choose from.

2. I believe that the product development activity plays a big part in Zara’s responsive supply chain. It does so by allowing the product to be quickly developed by the company’s elaborate and centralized design team accompanied with Zara’s other owned textile manufacturer Inditex. The fact that Zara owns its own textile company Inditex makes it faster and more reliable to develop their products because they produce half of the product in Inditex. If they worked with outside suppliers, it could slow their supply chain. Because the elaborate 200 designer are grouped into 3 sections and surrounded by inspiration, this enables them to increase the speed and quality of the merchandise. Zara’s products are designed, using modern and innovative technology which maintains a fast flow of information between the headquarters and store managers about the store’s sales trends and orders. All of the well-organized production planning and communication makes it simple for the company to solve small problems should a change in a retail order occur. This fast paced and organized system supports Zara’s responsive supply chain strategy.

3. Transportation and Inventory are two supply chain drivers that support Zara’s responsiveness. Transportation plays a part because Zara begins the process by setting a strictly organized scheduling system with the store managers which creates a rapid rhythm. Instead of using trains and ships would help lower transportation fees, Zara ships its small batches of merchandise by air and truck enabling the product to reach the retailors twice a week. These items are shipped already pre-priced and hung on racks with hangers, making it quicker for the store employees to display them as soon as they arrive to the store, therefore, supporting the store’s responsiveness. According to the article, the customers are aware of when the new deliveries come and
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