Zara and Benetton Supply Chain Comparison
Comparison of Zara and Benetton Supply Chains
REPORT
Master
Supply Chain and Purchasing Management (MSCP)
Date 11.02.2010
Outline
I. Supply Chain strategy 3
II. Supply Chain structure 5
III. Supply Chain processes 6
IV. Supply Chain management practices 7
V. Supply Chain performance 8
VI. Strengths and weaknesses 9
Bibliography 10
Appendix 11
I. Supply Chain strategy
The purpose of this report is to compare the supply chains of Zara and Benetton, two global players of the apparel industry. To give a first overview, both companies are placed in the quadrant of supply chain strategy:
[pic]
This scheme indicates that first of all, both companies are allocated close to each other and therefore face similar challenges. Since the casual-wear apparel industry is at a mature stage with saturation at global level, process stability is quite high for both. Zara is placed further towards ‘high demand variability’ due to its emphasis on continuous update of launched products and focus on design. Benetton is rather known for its casual, simple and basic clothing, with less product variations.
The strategic differences between the two companies can be summarized as follows:
|Benetton | |Zara |
|Lean SC |SC strategy |Responsive Supply Chain with Agile SC[1] elements |
|Minimize costs, maximize efficiency in terms of |Strategy parameter |Just-in-time reactions and flexibility to cope with |
|total logistic cost | |customers’ changing needs |
|Economies of scale | |Mass customization approach |
|Stock control and centralized management |
REPORT
Master
Supply Chain and Purchasing Management (MSCP)
Date 11.02.2010
Outline
I. Supply Chain strategy 3
II. Supply Chain structure 5
III. Supply Chain processes 6
IV. Supply Chain management practices 7
V. Supply Chain performance 8
VI. Strengths and weaknesses 9
Bibliography 10
Appendix 11
I. Supply Chain strategy
The purpose of this report is to compare the supply chains of Zara and Benetton, two global players of the apparel industry. To give a first overview, both companies are placed in the quadrant of supply chain strategy:
[pic]
This scheme indicates that first of all, both companies are allocated close to each other and therefore face similar challenges. Since the casual-wear apparel industry is at a mature stage with saturation at global level, process stability is quite high for both. Zara is placed further towards ‘high demand variability’ due to its emphasis on continuous update of launched products and focus on design. Benetton is rather known for its casual, simple and basic clothing, with less product variations.
The strategic differences between the two companies can be summarized as follows:
|Benetton | |Zara |
|Lean SC |SC strategy |Responsive Supply Chain with Agile SC[1] elements |
|Minimize costs, maximize efficiency in terms of |Strategy parameter |Just-in-time reactions and flexibility to cope with |
|total logistic cost | |customers’ changing needs |
|Economies of scale | |Mass customization approach |
|Stock control and centralized management |
Bibliography: AMT Consulting (2007): Zara case study1 : IT application value for supply chain , http://www.enet.com.cn/article/2007/0208/A20070208432658.shtml Anderson, K.; Lovejoy, J Benetton (2010): Investor Relations. Network, http://investors.benettongroup.com/phoenix.zhtml?c=114079&p=irol-VCCommercialNetwork Craig, A.; Jones, C.; Nieto, M Dapiran, P. (1992): Benetton - Global logistics in action, p. 7, International Journal of Physical Distribution & Logistics Management Inditex (2010): Inditex Press Dossier, p Pich, M. ; Van der Heyden, L. ; Harle, N. (2005) : Marks & Spencer et Zara: La concurrence des processus dans l’industrie du vêtement . Marks & Spencer and Zara: Process Competition in the Textile Apparel Industry. |FINANCIAL RESULTS | | | |Turnover (2008) |6854 millions[12] |2128 millions[13] | | |(1372 owned, 148 franchises) |(1364 owned, 4836 franchises) | |Average size |8072 sm |1292-10764 sm | [10] United Colors of Benetton (2010): Investor Relations. Logistics, http://investors.benettongroup.com/phoenix.zhtml?c=114079&p=irol-VCOperationsLogistics [11] Dapiran, P