ZARA
Question No1.Advantages of responsive supply chain of Zara?
A responsive supply chain of Zara works collaboratively among the stakeholders to exchange information in a feedback loop in order to produce enough of a product to satisfy uncertain demand.
Zara has greater visibility into the supply chain which makes it responsive to the current market. This allows Zara to sense and respond quickly to capitalize on new opportunities.
The information systems are the heart of the business model which enables it to better adapt to and meet customer demands. Information transparency and real time business intelligence leads to shorter cash to cash cycle times.(The duration between purchase of the inventory and collection of accounts receivable from the sales of the inventory).
It also enabled to reduce its inventory levels and increased inventory turnover across the entire retail chains. This will result in reduction in holding and carrying cost.
Operational expenses are reduced with planning for procurement, manufacturing, and transportation. Better order, product and execution tracking has lead to improvements in performance and quality - and lower costs.
Question 2.Why has Inditex chosen to have both in-house manufacturing and outsourced manufacturing? Why has Inditex maintained manufacturing capacity in Europe even though manufacturing in Asia is much cheaper?
Almost 80 % of the Zara’s production is carried out in Europe and high proportion of this is carried out in a headquarters in Spain. Almost half of its production is in-house or closely controlled facilities. This gives the Zara a tremendous amount of flexibility and control Inditex has owned capital-intensive manufacturing in Spain and it have adopted vertical integrating strategies to acquire dying and processing ,cutting and garment finishing facilities. This allows the Zara to exploit the geographical proximity to enhance its quick response to order which is critical for fashion industry. Undyed fabric is
A responsive supply chain of Zara works collaboratively among the stakeholders to exchange information in a feedback loop in order to produce enough of a product to satisfy uncertain demand.
Zara has greater visibility into the supply chain which makes it responsive to the current market. This allows Zara to sense and respond quickly to capitalize on new opportunities.
The information systems are the heart of the business model which enables it to better adapt to and meet customer demands. Information transparency and real time business intelligence leads to shorter cash to cash cycle times.(The duration between purchase of the inventory and collection of accounts receivable from the sales of the inventory).
It also enabled to reduce its inventory levels and increased inventory turnover across the entire retail chains. This will result in reduction in holding and carrying cost.
Operational expenses are reduced with planning for procurement, manufacturing, and transportation. Better order, product and execution tracking has lead to improvements in performance and quality - and lower costs.
Question 2.Why has Inditex chosen to have both in-house manufacturing and outsourced manufacturing? Why has Inditex maintained manufacturing capacity in Europe even though manufacturing in Asia is much cheaper?
Almost 80 % of the Zara’s production is carried out in Europe and high proportion of this is carried out in a headquarters in Spain. Almost half of its production is in-house or closely controlled facilities. This gives the Zara a tremendous amount of flexibility and control Inditex has owned capital-intensive manufacturing in Spain and it have adopted vertical integrating strategies to acquire dying and processing ,cutting and garment finishing facilities. This allows the Zara to exploit the geographical proximity to enhance its quick response to order which is critical for fashion industry. Undyed fabric is