CIPS Level 5 - AD3 May14 Pre Release

7/23/2019 CIPS Level 5 - AD3 May14 Pre Release

1/15

AD3/May 2014

Advanced diploma in procurement and supply

Improving the compeveness

of supply chains

CASE STUDY

QP04


2/15Page 2 of 16 AD3 Case Study May 2014

INSTRUCTIONS FOR CANDIDATES

The pre-released case study examinaon is designed to assess your ability to apply the relevant theories,principles and techniques associated with the unit content to a realisc business situaon.

The examinaon is a three hour open-book examinaon. The examinaon quesons will test each of thelearning outcomes from the unit content.

You will be expected to demonstrate your knowledge and understanding of relevant theorecal principles,concepts and techniques; to apply these appropriately to the parcular situaon described in the casestudy and; above all, to make sound decisions. You will not gain marks by wring a general essay on thetopic. Prepared notes may not be included as part of the answer.

Please note that all work should be your own. Copying or plagiarism will not be tolerated and could

result in no marks being awarded. If quotes or short extracts are used they should be aributed or the

source of the informaon idened.

You should acquaint yourself thoroughly with the case study before the examinaon. You must take your

copy of the case study into the examinaon.



COMPETITIVENESS IN FASHION SUPPLY CHAINS

Introducon

Fashion, by denion, is transitory in nature it does not linger for very long. In fact some fashions exist forvery short periods and are rapidly superseded by other fashions. This is certainly true of the clothing andaccessories markets, but can be equally true of other product categories.

Fashion markets are not solely driven by what happens to be the current fashion trend. Seasonal factorsare also signicant. In countries where there is a signicant Chrisan populaon or culture, Christmas hasa major impact on sales demand across a large number of product categories. In fact categories such as

jewellery depend on good Christmas trade for much of their annual prot.

Weather also has a signicant impact upon demand. A mild winter can result in lower than forecast salesof knitwear, heavy coats and other items designed to combat cold weather. Similarly, a cold or wet summercan result in lower demand for items such as t-shirts and beachwear.

These seasonal, short-term changes in demand and styling, taken within the context of global supply

networks, create volale, complex and rapidly changing markets that pose substanal challenges to thoseseeking to exploit them.

Marn Christopher et al (2004) determined that fashion markets would typically exhibit the followingcharacteriscs:

Short life-cycles the product is oen ephemeral, designed to capture the mood of the moment:

consequently, the period in which it will be saleable is likely to be very short and seasonal,

measured in months or even weeks.

High volality demand for these products is rarely stable or linear. It may be inuenced by the

vagaries of weather, lms, or even by pop stars and footballers.

Low predictability because of the volality of demand it is extremely dicult to forecast with anyaccuracy even total demand within a period, let alone week-by-week or item-by-item demand.

High impulse purchasing many buying decisions by consumers for these products are made at

the point of purchase. In other words, the shopper when confronted with the product is smulated

to buy it; hence the crical need for availability. (Christopher M., Lowson R., Peck H., (2004)

Creang agile supply chains in the fashion industry, Internaonal Journal of Retail & Distribuon

Management, Vol. 32 Iss: 8, pp.367 376 (5).

Gordon Selfridge, founder of the famous Selfridges department store in Londons Oxford Street, wasreputed to have said that retailing was all about having the right product in the right place at the rightme.

Having the right product involves a combinaon of the right style and colour, quality specicaon andprice. Value for money is important and goods must also be t for purpose, which includes compliancewith any relevant legislaon or regulaons. Although by their nature the most fashionable products are notexpected to have a long product life they must look good and meet quality standards. Fashion retailers atthe more expensive end of the market may not regard price as a primary consideraon in their markengproposion. Within the mass market, however, it is essenal to be price compeve. To achieve lower costsand compete eecvely on price, so-called fast fashion retailers source their nished goods globally and inlarge volumes from countries with the lowest producon costs such as China, India and Bangladesh.



The most cost eecve way of transporng nished goods from countries many thousands of miles awayis by sea freight. However, this can take weeks and adds signicantly to the order lead me for nishedgoods. Sea freight from China to Europe can take from four to six weeks. Air freight, which is much fasterand can take days rather than weeks, is more costly and thus impedes price compeveness. The challengefor the fast fashion retailers is to leverage the economies inherent in global sourcing of clothing and at thesame me deal eecvely with the longer mescales and distances involved, and their impact on exibilityof supply. This makes supply chain management complex as it involves controlling and managing largenetworks of distant suppliers, more eort in developing the product design funcon, and producing greater

numbers of collecons and individual designs (7).

Andres Mazaira et al in their 2003 case analysis of Inditex-Zara (18) suggested that the following trendswould be the determining factors for the future development of the global fast fashion sector:

De-localisaon of texle and clothing manufacture in Europe and North America.

A strong increase in compeve pressure.

Company growth strategy and forward-looking integraon for clothing manufacturers.

Development of distribuon chains.

Increased market parcipaon for killers.

Growing internaonalisaon. A strong commitment to exibility.

Low delity levels. One-brand wardrobes no longer exist, and companies seek to increase their

share in customer wardrobes (19).

Many of these predicted factors have now become reality.

Many internaonal fast fashion retailers such as Gap and Topshop source their products globally fromindependent producers. Oen retailers claim to have long-standing relaonships with their manufacturersand some express concern for the social and ethical governance of their supply chain.

Retailers are concerned not just that product specicaon is met, but howthe specicaon is met. Texleworkers are tradionally among the lowest paid and most exploited in the world. Compliance with ethicaland environmental codes can be as important as conformance to order specicaon. Managing these risksis a signicant challenge for retailers.

Basic and more predictable clothing such as T-shirts, for which it is easier to forecast demand further inadvance and more accurately, is where retailers can best achieve economies of scale sourcing from low costcountries, parcularly in Asia. One retailer in the UK sold 6 million T-shirts in 2006 (17). However, the protmargins on these types of products are lower than on the more innovave and more fashionable productswhere order volumes are lower and the lifecycle shorter. Fast fashion retailers, using supply networks ofindependently owned manufacturers, therefore try to predict and even inuence demand for the morefashionable products. Emerging fashion trends in each of these market groups would be very closelymonitored as well as more general inspiraon from movies, television, popular holiday desnaons, musicindustry oerings and so on (18).

Dierent approaches to the management of global supply networks in the fast fashion marketplace areexhibited by three of the largest global fast fashion retailers: Beneon, H&M (Hennes & Mauritz) and Zara(Inditex Group).



Beneon

Beneon is an Italian company and one of the rst truly global fast fashion retailers, with more than6,000 shops in 120 countries (Beneon Group 2013). While the whole of the European Union has becomea net importer of clothing, Italy sll has a posive balance of exports, although this dropped considerablybetween 1997 and 2007, falling from 50% to 17% with imports into Italy from China more than doubling inthe same period (19).

Beneon was founded in 1965 in Ponzano Veneto near Treviso, Italy and grew rapidly based on a businessmodel that included quasi-franchised1outlets (a minority of stores were wholly owned), a wholly ownedmanufacturing and dyeing facility, and a network of relaonships with small to medium sized localmanufacturers. These manufacturers included home workers that specialised in kning, cung and sewing.

The suppliers operated in a ered supply network with er one suppliers coordinang er two suppliersand er two coordinang lower ers, oen consisng of the home workers. Beneon had also developeda new method for dyeing knied coon goods. This meant that it was possible to alter the colourbalance of orders very quickly once rst indicaons of demand, via sales reports, came in. In the past thefranchise owners would order around two thirds of the forecasted demand for the season up front, with

the remainder of the orders placed once early reacon had been received. Thousands of designs wereproduced annually from teams of more than 300 designers working on short-term contracts. This modelwas very successful and led to rapid internaonal growth in numbers of outlets as well as unit sales, fuelledin parcular by creave, and oen controversial, adversing. Global distribuon was, and sll is, handledfrom a state-of-the-art distribuon hub based at Castree in Italy.

Beneon and Zara both have supply chain models based upon a degree of vercal integraon that allowsthem to exercise more control since some of the manufacturing takes place in their own factories. Thisdiers from other internaonal fashion retailers such as Gap, Topshop, H&M and Mango where the supplychain strategy is not to own manufacturing but to deal with independent suppliers (7).

Although Beneon is widely known as an Italian manufacturer, things have changed. Beneon hasrelocated much of its producon abroad and retains less than 20% of its manufacturing in Italy (6). TheBeneon Group has clearly dened its consumer experience in terms of operaonal objecves as:

QUALITY

RIGHT PRICE

PROXIMITY

TIME TO MARKET

TIMELY DELIVERY (2).

To achieve these objecves Beneon has set out to develop a supply chain strategy that delivers exibility,eciency and eecveness in responding to the producon requirements of the company.

Beneon has based its supply network on two models: the Industrialised Model and the CommercialModel, each accounng for 50% of total producon requirements. This approach is somemes referred toas a dual supply chain.

1Beneon refers to the stores that are not wholly owned as wholesale and these account for around 75% of the groupbusiness. The wholly owned stores which account for a further 25% of group business are referred to by the Beneon Groupas Directly Managed Stores. The wholesale stores have area or regional agents who organise the orders from the individualwholesalers direct to Beneon. The store owners are, in fact, retailers in their own right but do not pay royales to Beneon.However, they can only stock Beneon branded products and the retail pricing is controlled by Beneon. So the system operatesmore like a kind of franchise operaon although it is strictly speaking not a franchise in the legal sense of the word.



The Industrialised Model has higher levels of direct control and vercal integraon with the BeneonGroup. Producon takes place in Italy, Eastern Europe, Tunisia and India. There is also signicant investmentin expanding producon centres in Croaa and Tunisia where facilies control the complete produconcycle from raw materials to nished goods. Non-vercally integrated operaons in these countries handlemore intensive manufacturing and nishing, which is outsourced but directly controlled by Beneons ownproducon sites in Italy and other countries. Direct in-house control by Beneon is exercised over thoseoperaons that it considers strategic in nature, such as where large scale automaon is required, e.g.weaving and quality control. Signicant investment has been made in automaon and enhanced quality

control systems. The Olympias Group, which is wholly owned by Beneon, provides texles, yarns, clothingmanufacturing, labels and laundry processes such as dyeing (garment, yarn and fabric) and nishing (stonewashing jeans would be one example of this).

The Commercial Model that accounts for the remaining 50% of producon is outsourced to manufacturersin China, India, South-East Asia and Turkey. With this model, Beneon is seeking to maximise the benetsand lower costs of global sourcing, while maintaining rigorous control of quality and compliance, using itsown locally based personnel.

This double supply chain is intended to ensure eciency and speed for Beneons supply operaons and

it uses two approaches to planning: a sequenal approach aimed at minimising costs and maximisingeciency; and an integrated approach aimed at minimising response mes to changes in demand. Thissystem conducts key acvies such as R&D, product design, producon acvies and sales in parallel(see Exhibit 1).

In terms of logiscs and distribuon the Beneon Group has total direct control of both its IndustrialisedModel of direct producon and the Commercial Model of outsourced producon. The operaons ofBeneons distribuon centre at Castree2are integrated with two other distribuon hubs, in Asia andLan America, which share the development of automaon, modelling and organisaon of the systemsthat have long been a feature of the Castree operaons. The IT system, which coordinates and opmisesworldwide deliveries, is fully centralised and Beneon connues to invest in structures and processes

(See Exhibit 2).

A mulnaonal team of more than 300 designers research feedback from stores to determine trendsand consumer requirements. This is supplemented with informaon on customer requirements fromlocal regional sales agents. The planning processes aim to simplify the structure of the collecons andthe producon processes (based on feedback received from the sales network), opmising the variousoperaonal phases to provide a constantly improved service to the point of sale (2). The objecve is toensure rapid reacon to seasonal trends and changes in consumer demand so that the products deliveredto stores are constantly updated.

2The Castree plaorm opmises deliveries and the quality of the service to the sales network, thanks to its geographicalposion (close to the domesc market and the countries of Europe) and the use of innovave technologies. This structurehas a fully automated electromagnec sorng system, which can manage the individual orders of the 6,400 Beneon storesworldwide, ensuring the total integraon of the producon cycle. (order management, packaging and deliveries). The foldedand hung garments are automacally sorted, packaged and sent through a 1km-long tunnel to the Automated DistribuonCentre, which covers a 30,000 m area, has an overall capacity of 800,000 boxes and is capable of handling 120,000 incoming andoutgoing packages daily. The centre requires a workforce of only 28 people, compared to a couple of hundred people that wouldbe necessary in a tradionally operated plant (2).



H&M

H&M (Hennes & Mauritz) is one of the largest global fast fashion retailers. The rst Hennes store opened inVasteras, Sweden in 1947. Today it has a network of more than 3,000 H&M stores in more than 53 countriesworldwide. The company connues to thrive and expand. Expansion today is focused on the USA and Chinaas well as European markets such as Russia, Germany, the UK, Italy, Poland and France. Unlike Beneon,most of this worldwide network of retail outlets is wholly owned, with franchising playing only a small rolewhere necessary to enter a parcular market. Franchising is not seen as a core part of the development

strategy long term.

H&M has an intense corporate focus on sustainable pracce throughout its operaons and parcularlywith regard to supply chain operaons. Quality and rapid reacon to trends also feature highly in corporatecommunicaons regarding supply side objecves. The company also strives to achieve the best possibleprice by:

Keeping all of the design funcon in-house using a team of more than 160 mulnaonal designersand 100 paern makers based at the company headquarters in Stockholm.

Disintermediang the supply chain removing intermediaries and coordinang manufacturing

using its own producon oces and personnel in each supply market. Achieving economies of scale by placing large volume orders. Using global resourcing to ensure the best possible price buying the right products from the

right markets. Eciency in the vercally controlled logiscs and distribuon operaons. Maintaining a focus on costs throughout the whole organisaon.

H&M has concept teams comprising buyers, designers and paern makers, which are responsible forensuring that H&M stores keep up to date with customers and the latest trends. Highly fashionablemerchandise is produced and stocked in smaller quanes in large cies. A larger volume of more basicmerchandise is distributed more widely (11).

To achieve the lowest possible price H&M sources from around 800 independent suppliers across Europeand Asia. Although these suppliers source the raw materials they require, H&M has extended its qualityand compliance audits downstream to incorporate the mills and nishing plants that supply productsand services to its suppliers. H&Ms audits also include a strong focus on environmental responsibility,sustainability and chemical management.

Although H&M does not own any manufacturing it does have its own producon oces and personnel inthe markets where its merchandise is manufactured. These producon oces are responsible for managingthe ming and praccal aspects of progressing orders placed, carrying out quality tesng, ensuringchemical requirements are met, and conducng audits.

Lead mes for orders placed can vary within the supply system from a few weeks for high fashion trenditems to six months for more basic high volume products.

The decision of which supplier is the right one, is not only a maer of cost-eciency but also depends

on other factors such as transport mes, import quotas and quality aspects. To minimise risk, buying

is carried out on an ongoing basis throughout the year.

In recent years, H&M has reduced the average lead me by 15-20% through developments in the

buying process. Flexibility and short lead mes diminish the risk of buying the wrong items and allow

stores to restock quickly with the best-selling products (9).

Most of the goods purchased are transported by rail and sea (90%) with shops receiving goods from distribuoncentres in their geographic vicinity. H&M controls the inventory but outsources the transport to third pares.A large percentage of goods sold are routed to local distribuon centres via a transit terminal in Germany.



Inditex Zara

The fast fashion chain Zara is another of the worlds largest fashion clothing retailers. It is part of the InditexGroup, a group of more than 100 companies operang in texle design, manufacturing and distribuon,with headquarters in La Corua in northern Spain. The Inditex Group has more than 6,000 retail outlets inmore than 400 cies across ve connents and connues to grow rapidly (15).

Its fashion retail stores include Zara (1,770 shops), Zara Kids (166 shops), Pull & Bear (825 shops), Massimo

Du (634 shops), Bershka (910 shops), Stradivarius (816 shops), Oysho (533 shops), Zara Home (363shops) and Uterqe (87 shops). Most of the retail outlets are wholly owned by Inditex and, similar to H&M,franchising is only used where local regulaons impede direct foreign ownership.

One of the unusual features of Zara is the lack of a formal markeng department and the low spend onadversing (10). Observers such as journalists and academics have therefore looked to other factors such aslogiscs and supply chain management for the secret to the fashion retailers connued success.

The team of designers at Zara produce around 24,000 designs each year, out of which around one thirdwill nd their way into stores. This is signicantly more designs than other fashion chains and represents

a key feature of Zaras approach to fast fashion. It ensures that the store collecons or product rangesare constantly refreshed with new merchandise. Each of the 6,000+ Inditex stores receives at least twodeliveries of new merchandise every week. Regular customers shopping in Zara understand that if they seesomething they like they will need to buy it immediately because it is unlikely that there will be any repeatdeliveries (producon) of exactly the same garment.

In this way, says Masoud Golsorkhi, the editor of Tank, a London magazine about culture and

fashion, Inditex has completely changed consumer behaviour.

When you went to Gucci or Chanel in October, you knew the chances were good that clothes would

sll be there in February, he says. With Zara, you know that if you dont buy it, right then and there,

within 11 days the enre stock will change. You buy it now or never. And because the prices are solow, you buy it now (10).

Communicaon directly from the shop oor to the producon and design department in La Corua isvital in ensuring the designers and producon planners are kept up to date with customer reacon to newproducts, with what styles are selling and what trends are emerging. Sta in the shops contact the Zaraproducon oce to let it know what customers are asking for and if clothes with parcular style featuresare experiencing high demand. Store sta have handheld computers to view the next order allocaon andcan change quanes based upon local customer preferences. Retailers essenally have two objecves.The rst is to maximise return on investment in each store, by maximising sales. The second is to maximisethe protability and return on inventory for each product line. Dierent locaons may have somewhat

dierent demographic mixes and this will impact upon demand. Zara aempts to ensure that stores stockthe opmum mix of products that appeal to parcular customer requirements in each locaon and tomaximise return on inventory in each product line by ensuring eecve and accurate distribuon to meetlocal demand characteriscs.

The whole of Zaras strategy is based upon shortening lead mes and reacon mes to a few weeks aquick response (QR) approach that is the retail sector equivalent of manufacturings JIT (Just in Time). Infact some of the factories near to Zaras head oce in La Corua are connected to the distribuon centreby an aerial monorail so that the transfer of completed garments for nishing (ironing, quality controlinspecon etc) is quicker and more ecient. The cung of fabric takes place in Inditex-owned factoriesusing the latest CAD (computer aided design) machinery and this is then sent out to a large network of

small-to-medium sized sewing workshops and subcontractors.



Only one third of actual forecast requirement is produced ahead of the season, with the remaining twothirds produced during the season based on in-season style trends. Producon is, in fact, based upon JITprinciples. A substanal amount of the fabric used in Zaras own factories is le undyed to be coloured aslate as possible in the garment producon cycle so that a more accurate reacon to specic local demandcan be achieved (3).

Half of the producon for Zara comes from factories mostly owned by Inditex close to La Corua in Spainwith some also in Portugal and Morocco. The remaining 50% is produced by independent manufacturers

with 30% coming from factories in Eastern European countries such as Turkey, Romania and Bulgaria,and the remainder from Vietnam, China, Brazil and Bangladesh among others (Hansen S.) where Zaracan achieve 15- 20% lower producon costs (3). These distant independent markets tend to be used formore basic merchandise that has a longer product life and where demand is not as volale as the morefashionable merchandise.

Zara has around 50 stores in the United States and there are limited plans for further expansion there. Zarahas expanded very successfully in China where there are approximately 150 stores. Quesons have beenraised regarding the ability of Inditex to connue to supply China in the way it has done to date with sucha large scale expansion. Doubts have been voiced as to whether the exisng supply chain strategy andbusiness model can be replicated in other distant markets (10).

Nelson Fraiman, a professor at Columbia Business School who has studied the Inditex model, told the NewYork Times Magazine:

Their factories in La Corua have a nite capacity to respond quickly. You open more and more

stores, and you dont have exibility of the last-minute response. Once they have a big thrust in China,

then what happens is that they will have to take the whole model the processing of customer

reacons, the quick-turnaround design teams, the logiscs plaorm and replicate it in China. But

the bigger Inditex gets, he says, the more it will lose control over quality and eciency (10).

Conclusion

Fast fashion retailers are most concerned about their gross margin return on inventory (GMROI). They needto achieve a parcular return on their investment in stock and as this stock is fashion clothing, the return(prot) needs to be achieved quickly. The key performance rao GMROI is calculated in the following way:

Gross Margin (on sales less VAT)100

Average Inventory Value at Retail Selling

The lower the stock holding or inventory compared to the gross margin, the higher the GMROI becomes.

This is a powerful measure considering that the main purpose of existence for a retailer is to purchasegoods at one price and sell them at a higher price. So this measure informs the market on how successfullya retailer is achieving this aim how well it is managed. Instuonal investors and banks focus on thismetric when making investment and nancing decisions.

The lower the average stockholding is compared to gross margin, the higher the GMROI will be. Shops canwork on lower inventories if they have an ecient and regular delivery system. However, if sales drop,because the wrong styles or colours or size assortments are stocked, then inventory will increase. Salespromoons which reduce gross margin will need to be applied (to encourage customers to buy more of theslower moving lines) and this will mean a reducon in gross margin and, therefore, in GMROI.

Having the right merchandise in stock, in exactly the right quanes, in such a fast moving and volaleglobal market means synchronising producon, supply, distribuon and deliveries to consumer demand toprovide a exible, responsive and ecient supply chain.



Success in the fast fashion market will, therefore, be achieved by those companies that can create andeecvely manage such supply systems. Compeon will, therefore, not be between retailers alone butrather between their global supply networks. This was clearly arculated in Masson et als (2007) publishedresearch into the complexies and challenges of managing such supply networks to achieve agility.

... the high-product variety required to succeed in this market almost always requires a signicantly

large and changeable supply base, so the industry is also a parcularly good example of network

compeon (Christopher and Towill, 2000). Retailers that can successfully manage the complex supply

network to achieve supply chain speed and exibility will maximise prots when they do meet market

needs, while at the same me minimising the penales associated with missing the market (18).

With demand increasing for a smaller volume of innovave products that are introduced more frequentlythroughout the year there is a growing requirement for suppliers with more sophiscated producon,design and operaonal skills. This is challenging retailers in this sector since it involves a further widening ofthis already complex supply structure.



Bibliography

1 Beneon Group 2013, Downloaded on 07.11.13 from hp://www.beneongroup.com/media-press/2 Beneon Group Value Chain, Downloaded on 07.11.13 from hp://www.beneongroup.com/value-

chain/index.html3 Caro F., (2012), Zara; staying fast and fresh, Case Study, UCLA Anderson School of Management4 Christopher M., (2000), The Agile Supply Chain; compeng in volale markets, Industrial Markeng

Management, Iss. 29, pp.37-44

5 Christopher M., Lowson R., Peck H., (2004) Creang agile supply chains in the fashion industry,Internaonal Journal of Retail & Distribuon Management, Vol. 32 Iss: 8, pp.367 376

6 Christopher M., Peck H., (1997) Managing Logiscs in Fashion Markets, The Internaonal Journal ofLogiscs Management, Vol 8, No. 2, pp.63-74

7 Crestanello P. & Taara G. (2009) A Global Network and its Local Ties; Restructuring of the BeneonGroup, Working Paper, Department of Economics, Ca Foscari University of Venice, Downloaded on25.10.13 from hp://papers.ssrn.com/sol3/papers.cfm?abstract_id=1397103

8 De Brito M.P., Carbone V., Meunier Blanquart C., (2008) Towards a sustainable retail fashion supplychain in Europe: organisaon and performance, Internaonal Journal of Producon EconomicsVol. 114, pp.534 - 553

9 E-Business Watch, Case Study: Hennes & Mauritz, downloaded on 31.10.13 from hp://ec.europa.eu/enterprise/archives/e-business-watch/studies/case_studies/documents/Case%20Studies%202004/CS_SR01_Texle_2-HM.pdf

10 Hansen S., How Zara Grew Into the Worlds Largest Fashion Retailer, New York Times Magazine,November 9th 2012, downloaded on 13.11.2013 from, hp://www.nymes.com/2012/11/11/magazine/how-zara-grew-into-the-worlds-largest-fashion-retailer.html?_r=0

11 H & M, AboutH&M.com, Downloaded on 24.10.13 from hp://about.hm.com/en/About.html12 Hennes & Mauritz, Our Supply Chain, Downloaded on 31.10.13 from hp://about.hm.com/en/About/

Sustainability/Commitments/Responsible-Partners/Supply-Chain.html13 Inditex Annual report 2012, downloaded on 24.10.13 from www.inditex.com/en/downloads/Annual-

Report-Inditex-2011.pdf

14 INDITEX Timeline, downloaded on 20.10.13 from hp://www.inditex.com/en/who_we_are/meline15 InditexGroup, who we are, downloaded on 08.11.13 from hp://www.inditex.com/en/who_we_are/

our_group16 Irish Independent.ie, How fashion giant Inditex bucked trend to notch 16bn sales, 28 October 2013,

Downloaded on 28.10.13 from hp://www.independent.ie/business/world/how-fashion-giant-inditex-bucked-trend-to-notch-16bn-sales-29704439.html

17 MacCarthy B.L. & Jayarathne P.G.S.A., (2009) Fast Fashion; Achieving Global Quick Response (GQR)in the Internaonally Dispersed Fashion Industry, Nongham University Business School ResearchPaper series 2009-09

18 Masson R., Losif L., MacKerron G., Fernie J., (2007) Managing complexity in agile global fashionindustry supply chains, Internaonal Journal of Logiscs Management, The, Vol. 18 Iss: 2, pp.238-254

19 Mazaira A., Gonzlez E., Avendao R., (2003) The role of market orientaon on companyperformance through the development of sustainable compeve advantage: the Inditex-Zara case,Emerald 21

20 Polese F., Morea Tartaglione A., Sarno S. & Carrubbo L., (October 2009) An Ecient Value Chain, ora Service Value Network? Best pracces Deriving From Zara., 2nd Annual EuroMed Conference of theEuroMed Academy of Business Managerial and Entrepreneurial Developments in the MediterraneanArea

21 StascBrain.com, Fashion Industry Stascs, downloaded on 24.10.14 fromhp://www.stascbrain.com/fashion-industry-stascs/

22 Tokatli N., (2007) Global Sourcing Insights from the global clothing industry-the case of Zara a fast

fashion retailer, Journal of Economic Geography23 Tiplady R., (04,04,2006) Zara taking the lead in fast fashion, Bloomberg Business Week Europe



END OF CASE STUDY

EXHIBITS

EXHIBIT 1 Beneon Industrial Structure Double Supply Chain

Vs

Beneon Group Value Chain, Downloaded on 07.11.13 from hp://www.beneongroup.com/value-

chain/index.html

EXHIBIT 2 Beneon Organisaonal Model Operaons

Beneon Group Value Chain, Downloaded on 07.11.13 from hp://www.beneongroup.com/value-

chain/index.html

EFFICIENCY

Sequenal Supply Chain

Design

R&D

Operaons

Sales

SPEED

Integrated Planning System

Operaons

Consistency

Design

R&D

Sales

Europeanlogiscs hub

Italy

Asianlogiscs hub

Shenzehn

Central Americalogiscs hub

Mexico City

Independentsuppliers

European andMediterraneanplants

Asian plants Central Americanplants

Global storenetwork



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CIPS Level 5 - AD3 May14 Pre Release