Quick Response and ZARA Business Model

Quick Response…Introduction

Introduction

Introduction

Benefits

A QR system can trigger a series of benefits• First and foremost Increased sales due to an

increased retail in stock position

• Lower inventory label and reduce carrying cost

• Accuracy of information, efficent distribution

Element of Quick Response

The element required for effective QR can be summarized by 3 Cs

• Control• Communication• Collaboration

ZARA Business Model

• Zara is a flagship brand of the Spanish Retail Group Inditex SA.

• Contributes around 80% of group sales

• Riding two of the winning retail trends being in fashion and low price

Winning Formula

• Short Lead Time

• Lower Quantities

• More Styles

Shorter Lead Time

Normal Lead Time

Zara Lead Time

Shorter Lead Time

• By focusing on shorter response time the company ensures that its stores are able to carry clothes that the consumer want at that time

• Zara can move from identifying a trend to having clothes in its stores within 30 days

Lower Quantity

Reducing Risk..lesser quantity

• It Reduces the quantity manufactured in each style.

• Reduce exposure to any single product

• Create an artificial scarcity

• Lesser to be disposed when a season ends

More Styles

Leadership in numbers.. More styles

• Instead of more quantities per style, Zara produce more styles roughly 12000 in a year

• There are always new styles available to take up the space

• Stock look fresh in every 3-4 days

Mechanism of success• Ownership and control of production

• Active product development

• React rather then predict

• Suitable supply chain

• Better use of IT

ZARA Customer offer

Acknowledgement

• Mr. Vasant Kothari NIFT, Bangalore