VIA
Group Member;Moe Thu (0346999)Mya Ye Lai Khaing (1153181)Hnin Thiri (1151936 )
All stages and parties involved, directly or indirectly, in fulfilling a customer request.
Internally, the purchasing process includes all functions involved in fulfilling a customer request (product development, marketing, operations, distribution, finance, customer service).
Externally, it includes the suppliers, vendors, manufacturers, transportation, and distributors, that exist to transform raw materials to final products and supply those products to customers.
Outsourcing & In House
Multiple Sources
Locally & Internationally
Supplier’s Responsibility
Inventory Management
Distribution System
Retail Strategy
ZARA AppleOutsourcing
Single Source & Multiple Sources
Internationally
Supplier’s Responsibility
Inventory Management
Distribution System
Retail Strategy
Outsourcing vs In-House
keeping design and half of its products
manufacturing in-house or with some
strategic partnerships located nearby
Headquarters La Corunna
Use around 500 sub-contractors located
close to the head office for all sewing
operations
Half of its products are procured from
400 outside suppliers
.
ZARAOutsourcing • Low Overhead –outsource labor to a
country with very cheap labor and favorable taxes, that why Apple done by 100% outsourcing in china.
• Low Cost of Goods Sold – Make friends with suppliers, get very cheap raw materials, By shouldering part of the factory production, Apple got major discounts.
• Effective Supply Chain – Ensure that the customers get the products at the shortest time possible, Apple has access to new component technology months or years before its rivals. This allows it to release groundbreaking products that are actually impossible to duplicate.
Apple
ZARA
Multiple Sources
Fabrics comes from a range of 260
suppliers . In order to minimize
dependency on single supplier and
encourage maximize responsiveness
from them.
Having its own dying facilities can
quicker respond to customer demand.
AppleMultiple Sources
Flash memory come from Korea
(Samsung ,Toshiba).
Aluminum and stainless steel case is
also made by a Taiwanese firm,
Catcher Technology and others.
Display by LG Display, Samsung and
Seiko Epson
Single Source• Dragon trail Glass was manufactured by
Asahi Glass Company in Japan.
ZARA Locally & Internationally
70% are in Europe & most of the rest
are Asia where has a clear cost & quality
advantage.
Why they located production plants in
Europe and Not in Asia? Although the
increased cost in production will not be
offset by the cost reduction in
transportation concerning the labour
cost is on average 17-20 times the cost in
Asia.
Apple Internationally
80% are in China & most of the rest are
UK , USA, Germany , Japan where has the
advance technology of important parts for
their product.
To get great profit margins. Charge high
prices or reduce costs. Apple does both.
Apple have perfect supply chain skill to do
manufacturing internationally.
ZARA
Ensure Quality
Adherence to the production
schedule
Responsible for picking up &
deliver of Production items
Timely Delivery & Service
Apple
Ensure Quality
Social Responsibility such as
quality, cost, and timely delivery.
Environmental Responsibility
Perfect communication with
industrial management system.
Apple Maintain a fairly low inventory-on-
hand ratio.
To hold the inventory for a next-day sale
to grant its inventory control specialists
the time to “calmly and accurately”
process new shipments.
ZARA Decreased quantities & decreased
inventory risks.
Small shipments & carrying low
inventory
Product lines also up to date
market trends and consumer
behavior (Fresh Fashion). It
decrease the inventory holding
cost.
Policy of moving unsold items
after two or three weeks
ZARA Centralized
- Major Distribution center in La
Coruña
& Minor Distribution center in
Zaragoza
Short – Lead time (2 to 4 weeks)
compare with its competitors
Quick delivery to store twice a week
Maximum of 24 hours to stores inside
Europe & 48 hours in America.
Apple• Not sold through direct sales force due to
small volume
• High level of service
• On line services for companies
• Governments buy mainly through tenders.
ZARA’s Retail Strategically located all of their stores
in prime retail districts for visibility
marketing
Spends 0.3 % of total revenues on
marketing & advertising
Zara invest heavily in their store
layouts and customer are trained to
visit their stores often cos new design
are presented weekly
Apple’s Retail
Paying off for the company. As it continues to open new stores around the world, its share of the market grows.
the opportunity to introduce a consistent and strong retail presence of its own, rather than being represented only by a loose collective of third party resellers.
made their stores a touch-worthy experience. Touch anything, stay as long as you want, ask as many questions as necessary and feel free to borrow their WiFi.
retail presence such a positive success
Overall Strategy ZARA Apple
Supply Chain Vertical Integration Vertical Integration
Make vs Buy Analysis Outsource & In House Outsource
Sources of Supply Multiple Single & Multiple
Inventory ManagementLow inventory risk & Low carrying cost
Low inventory risk & Low carrying cost
Supplier KPIQuality & timely delivery
Ensure Quality & Delivery, Social & Environmental Responsibility