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ZARA SUPPLY CHAIN

Zara, a Spanish-based chain owned by Inditex, is a retailer who has taken a new approach in theindustry.

With their unique strategy, Zara has the competitive advantage to be sustainable. In order to maintain that advantage and growth they must confront certain challenges that face traditional

retailers in the apparel industry. Zara follows a structure that is more closely controlled than mostother retailers, and pays further by having the various business elements in close proximity to

each other, around its headquarters in Spain.

Zara concentrates on three winning formulae to bake its fresh fashions:

y Short Lead Time = More fashionable clothes\

y Lower quantities = Scarce supply

y More styles = More choice, and more chances of hitting it

Zara Supply Chain1) Ownership and Control of Production

y Ninety per cent of Zara stores are company-owned; the rest are franchises or jointventures. Customers entering a Zara store in London, Paris, New York or in Rio deJaneiro find themselves in the same environment.

y 60% of the manufacturing processes are outsourced in countries close to the Zaraheadquarters in Spain to help achieve a quick turnaround. Zara maintains a strong

relationship with their contractors and suppliers²viewing them as part of the company.y it is estimated that 80 percent of Zara's production is carried out in Europe which is

within the small radius of its headquarters in Spain. In fact, almost half of its production

is in owned or closely-controlled facilities2) Supercharged Product Development

y Every year, zara arise 40000 its design new product , the ¼ woul be choosen for productions

y Design and product development is a highly people-intensive process. The heavycreative workload of 1,000 new styles every month is managed by a design and

development team of over 200 people. This means that every person on an average is producing around 60 styles in a year or 1-2 styles every week.

y Significant investment in information technology and communications infrastructure tokeep streaming up-to-date trend information to the people making the product and business decisions.

y the entire product development cycle begins from the market research. This combinesinformation: from visiting university campuses, discos and other venues to observe whatyoung, fashion leaders are wearing, from daily feedback from the stores, from the sales

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y designer¶s job is making the initial design. Those design then disscused with

procurement and the market specialist. They will revised the design with Cad togetherly

accordance with the agreementy After designing, next step is making the sample each market specialists to handle a

particular store. During the progression of new products, intensive communication

occurs between designers, market specialists, buyers, and amanger store. decision of which products will be produced and how many each store jumalah order based on their

anatar discussion. 3) Shipment

y Small and frequent shipments keep product inventories fresh and scarce²compelling

customers to frequent the store in search of what¶s new and to buy now.because it will be gone tomorrow. Thanks to the twice weekly deliveries of replenishment stock as well

as new items, customers constantly return to stores to browse new items. Zara's global

average of 17 visits per customer per year is considerably higher than the three visits toits competitors

Clear here that the key importance in achieving this success is the close integration between thewhole process of design, procurement, production, distribution, and retailing

References :

y Supply Chain Practices of Zara.Institut of Management Technology Nagpur

y The Story of Zara-Speedy Bullet.UBS (Unit Business Staretgies)\

y Zara: Fashion Follower, Industri Leader. Business of Fashion Case Study Competition

Amanda Craig, Charlese Jones and Martha Nieto Philadelphia University

y Pujawan, Nyoman.2005.Supply Chain Management.Surabaya:Guna Widya

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39731634-Zara