Agile Supply Chain Case Study

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Introduction to Agile supply chain
When businesses start making money, the upper management focusses on maximizing speed, but when the economy is bearish, companies try to minimize supply costs. But there is an issue with this approach, companies who become more efficient and cost-effective, they do not gain a sustainable advantage over their rivals. What gives supply chains of Dell, Amazon and Wal-Mart, the edge over their competitors is not their efficiency but differentiating characteristics such as agility, adaptability and aligning the companies with sustainable competitive advantage.
The efficient supply chains are unable to respond to the unexpected change in the demand or supply. For example, when companies have a centralized manufacturing and distribution, they are tuned to minimize transportation costs and freight costs. Now, when there is a sudden demand for a particular brand/SKU, they are unable to react quickly even if they have the items in stock. Companies’ obsession with speed and …show more content…

The samples of the fashion are taken from places such as the streets, clubs and lifestyle hotspots. The place where Zara relies heavily on forecasting is fabrics, since fabrics have long lead times. There is still scope for innovation here, the fabric ordered is uncolored, and this gives Zara an option to color the fabric based on their requirements. To maintain agility along with profitability, Zara outsources some activities such as sewing and coloring, while other activities such as designing, prototyping and computer aided fabric cuts are done in house. The clothes after being assembled are distributed to the stores. In order to make sure that each order arrives at the destination punctually, laser barcode scanners are deployed which sort over 80,000 clothes, and that too with an error rate of

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