Zara
Zara Supply Chain Report
By:
A.H.
C.L.
H.L.
S.H.
X.W.
Humble Beginnings
In 1975, Amancio Ortea Gaona started Inditex Corporation in his first small shop in a remote town in Spain, Arteixo. Only 35 years later, it has emerged the largest apparel company in the world—Zara. Currently, Zara’s headquarters and two distribution centers are located in this small Spanish town. Zara broke a new path between the traditional high fashion and the mass fashion strategies; it provides the concept of fast fashion to common customers. Their mission is “to produce a fashion forward product for the masses”. Zara is described by its customers as having “first-class design, second-class materials, and third-class prices”. By 2010, it has in operation 917 stores in more than 60 countries and plans to enlarge the number to 2,000 until 2011. Its brand value reached to $6.79 billion in 2009. More than 400 designers work for Zara, creating 120,000 new fashion designs annually with 300,000 new stock-keeping units every year. We are going to discuss how Zara achieved its success through supply chain integration and Just-in-Time logistics management.
Product Flow and Geographic Scope
Unlike most apparel companies, Zara insists “no advise, no outsourcing, no discount.” Zara’s highly responsive vertically integrated supply chain is the company’s core competency. By eliminating middlemen through integration across design, production, distribution, and retailing, Zara can react to the customers’ needs, with design-to-store-delivery cycle time being as fast as just two weeks. To illustrate Zara’s supply chain further, the following is a summary and analysis of the product stream throughout the company.
Product Design, Sourcing, and Manufacturing
The design process is done by Zara designers and also by sourcing specialists and product development personnel at their corporate office in La Coruña, Spain. They form a “creative team” that simultaneously works on
By:
A.H.
C.L.
H.L.
S.H.
X.W.
Humble Beginnings
In 1975, Amancio Ortea Gaona started Inditex Corporation in his first small shop in a remote town in Spain, Arteixo. Only 35 years later, it has emerged the largest apparel company in the world—Zara. Currently, Zara’s headquarters and two distribution centers are located in this small Spanish town. Zara broke a new path between the traditional high fashion and the mass fashion strategies; it provides the concept of fast fashion to common customers. Their mission is “to produce a fashion forward product for the masses”. Zara is described by its customers as having “first-class design, second-class materials, and third-class prices”. By 2010, it has in operation 917 stores in more than 60 countries and plans to enlarge the number to 2,000 until 2011. Its brand value reached to $6.79 billion in 2009. More than 400 designers work for Zara, creating 120,000 new fashion designs annually with 300,000 new stock-keeping units every year. We are going to discuss how Zara achieved its success through supply chain integration and Just-in-Time logistics management.
Product Flow and Geographic Scope
Unlike most apparel companies, Zara insists “no advise, no outsourcing, no discount.” Zara’s highly responsive vertically integrated supply chain is the company’s core competency. By eliminating middlemen through integration across design, production, distribution, and retailing, Zara can react to the customers’ needs, with design-to-store-delivery cycle time being as fast as just two weeks. To illustrate Zara’s supply chain further, the following is a summary and analysis of the product stream throughout the company.
Product Design, Sourcing, and Manufacturing
The design process is done by Zara designers and also by sourcing specialists and product development personnel at their corporate office in La Coruña, Spain. They form a “creative team” that simultaneously works on
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