Zara, a clothing and accessory brand first established in Arteixo, Spain in 1975 by Amancio Ortega and Rosalina Mera. Ortega and Mera originally named the company Zorba, inspired by the movie called “Zorba the Greek”, but later they found out that there was a bar two blocks away called Zorba too, so they rearranged the letter and came up with a new name called Zara. The first store was opened in downtown Galicia, Spain and had the trendiest items with low priced. Ortega’s idea of developing a fast turnaround fashion market led to the success of Zara today. By 2015, Zara has more than 2,100 stores worldwide and also known for its ability to produce the most up-to-date fashion pieces and distribute to each store within two weeks. Globalization …show more content…
Zara uses a unique supply-chain strategy in order to maintain its promise of distributing new merchandises to each store every two weeks. Zara uses a vertical integration, where the company control and owns its supply chain. Zara buys all of the raw materials from the parent company and then deliver those raw materials to factories located in nearby third world countries where they can find cheaper labors and the transportation time is less. Before the finish products are send to the logistic centers, factory workers also pre-ironed the clothes, hang them in hangers, have tags affixed to the products, and put them into individual plastic bag. This can make the job of store employees a lot easier and save more time because once they …show more content…
Before Zara used to ship the finish products from the two main warehouses in Spain directly to each Zara stores in the world. The old system was very hard for the warehouses to keep track of the number of shipments and return from each stores because the store manager needs to notify the warehouses of the quantities of articles and sizes themselves and sometimes store managers will asked more quantities for certain articles because he or she thinks the customers will like particular piece a lot and afraid the store will ran out of the article. Sometimes if the store cannot sell all the articles they ordered or they received some damaged pieces, they will return them back to the warehouses. The new system will make the tracking a lot easier for warehouses because it involved a technology system where the people from the warehouses can see each store’s requested shipment and their past sales data in order to decide the number of pieces they will ship to them. This new system can also reduce the stock products in the warehouse
A supply chain is a system through which organizations deliver their products and services to their customers. The network begins with the basic ingredients to start the chain of supply, which are the suppliers that supply raw materials, ingredients, and so on. From there, it will transfer the supplies to the manufacturer who builds, assembles, converts, or furnishes a product. The chain now needs to get the product to the consumer by transporting the finished product from the manufacturer through a warehouse or distribution center. An example is that Wal-Mart has a nearby distribution center where products are delivered there and then split up to be delivered to a retail Wal-Mart.
Food industry can be chartered by low margin industry, while along with the shift of power from the manufacturer to the purchaser, the price and demand became flexible, and the product variety increased.
Zara is a famous Spanish apparel retailer based in Arteixo Galicia that provides product lines for women, men, and children. They are a high fashion retail that has a fast changing product lines. Zara is now represented in over 30 markets worldwide and operates over 500 stores. Zara has been operating under Inditex that was founded by Amancio Ortega in 1975. Inditex has been a global specialty retailer and has six apparel retailing chains including Zara. The six different chains include Zara, Massimo, Dutti, Pull & Bear, Bershka, Stradivarius, and Oysho. In 2001, Inditex has generated a net income of 340 million Euros. Currently, Zara is the largest and most international retailer in Inditex’s chains. Zara mission was to always to provide fast and affordable fashion apparel for customers. Since the fashion industry is rapidly changing over the seasons, Zara wanted to provide customers with attracting design.
Analysis & Recommendation: Zara’s main strategy is the ability to respond very quickly to the demands of target customers which called for identifying trends of the customer in advance. The company has been able to identify the trends and meet the demand with the help of its autonomously organized structure and its effective value chain systems. The present system followed by Zara has been very effective and very easy to maintain, which as a result has persuaded the company to continue without any change in the present system so far. The problem that Zara faces right now is that the system that they use, P-O-S (Point of Sale terminals), runs on DOS which Microsoft does not support anymore and any hardware change in the POS terminal will not be compatible with the current POS software. Although the sense of urgency for the change may not be that high, investing in IT infrastructure is a must as MS Dos is an obsolete technology and there is no contract or guarantee from their POS terminal vendor that they will continue supplying the same terminal with out much changes in the hardware for any specific period of time, therefore change is unavoidable. The other main issue that Zara faces is that the stores don’t share inventory information electronically and hence inventory management becomes highly difficult and manual. The decision making process is based on the judgment of employees throughout the company instead of relying on a small set of decision makers; the majority of the decisions were made by store managers and as a result they placed orders for the items rather than simply accepting and displaying what headquarters decided to send them.
Zara is a fashion clothing store owned by Spanish fashion group Inditex. The first Zara store opened in La Coruna by Amancio Ortega in 1975. Major consumers included young, fashion forward people who resided in the city whose trends and demands were hard to forecast. Being in the apparel industry, he believed that retailing and manufacturing needs to be closely linked to meet consumer demands. What differentiates zara from competitors is the rapid turnover time and using the physical store as a source of information. The company was a huge success and the Zara chain opened an average of one store per day across the world since 2003 and currently having about 550 stores.
Omni Logistics is a 3PL business that specializes in transportation services that can be customized to customer’s needs. Teams of dedicated professionals aim to remove risk and variability in the products and suppliers of their clients. Moreover, Omni tailors their services to meet the unique needs of each individual client by combining a unique team, technology, and personal processes. Omni’s program solutions include domestic (air and ground), international (air and sea), air charter, full truck load, LTL rater, security and risk management, White Glove Solutions, distribution, information technology, and business sector solutions.
b) Zara can focus on expanding and increasing the number of outlets in Asian countries such as China and India. The scope of development is very high and the demand for fashionable clothes is increasing at a very fast rate. But it will have to focus on other local competitors who provides the latest fashion at a cheaper rate. As Zara is a known brand, so it would be easy to increase awareness among the consumers through advertisement, promotions and celeb endorsements.
The fundamental business strategy of Zara is very simple which is linking customer demand to manufacturing, and liking manufacturing to distribution. Zara has been running their business in fashion industry which is susceptible to seasons and quick changing customer tastes. Zara has been approached to and considered their business as a perishable commodity business just like a fresh baked cake or bread to be consumed quickly.
This report has clearly in detail described the meaning, benefits as well as the need and challenges of the RFID in the supply chain system. While RFID comes with a larger magnitude of benefits than the bar code, it’s an expensive medium and comes at a price that may be prohibitive to many businesses. On the one hand, RFID is advantageous in different areas of the supply chain and does not require line-of-sight scanning; it helps in labor reduction, enhances visibility of products and processes , and helps in inventory management. On the other hand, RFID is an expensive solution, lacking benchmarks or standards, suffers from some adverse deployment issues, and suffers from major privacy concerns. However with the ultimate aim to see the establishment of item-level tracking which should act to revolutionize SCM practices, RFID is here to stay.
Wal-mart has been able to achieve respectable leadership in the retail industry because of its focus on supply chain management. Discuss in detail the distribution and logistics system adopted by Wal-Mart.
In the case, Marks & Spencer and Zara, it discusses two business process designs that each company took. You first had Marks & Spencer, who had a more traditional approach. Their chain started of with the buying team, design, developers, merchandisers, technologist, suppliers, logistics, and lastly the store. Zara, however, comes up with a new innovative design. With this new design in effect the delivery of new collections only has a lead-time of 5 days. They were able to cut down this time due to the fact that products where mainly produced on Galicia.
The business model and marketing strategy is the backbone of Zappos business growth and development. By adopting customer oriented business model and marketing strategy the company gains popularity and favor in the eyes of our consumers. The company is famous for creating stylish and unique design of shoes that attract a younger generation of people that helps generate profitability because the younger generation purchasing power tends to be high (Hsieh,
Zara’s business model can be broken down into three basic components: concept, capabilities, and value drivers. Zara’s fundamental concept is to maintain design, production, and distribution processes that will enable Zara to respond quickly to shifts in consumer demands. José María Castellano, CEO of Inditex stated that "the fashion world is in constant flux and is driven not by supply but by customer demand. We need to give consumers what they want, and if I go to South America or Asia to make clothes, I simply can't move fast enough." This highlights the importance of this quick response time to Zara’s operations.
UK Morepeth facility, the company’s ability to integrate over seas businesses and ramp up of
Fashion is a word that can mean many different things. To some it means what models wear on the runway. To others, fashion means the clothing styles that people wear on a daily basis. A good place to start this discussion would be to define what Fast Fashion is; it is the rapid conversion of design trends into multi-channel volume.