Zara Oepration Management
Zara operation management, A business case!
Tuesday, September 2, 2008 Zara operation management, A business case! 1- Executive Summary Operations management is in regard to all operations within the organization related activities including managing purchases, inventory control, quality control, storage and logistics. A great deal of focus is on efficiency and effectiveness of such processes. An example of successful operations management in retail sector is obvious in Zara business model which is elaborated and discussed here by a team of MBA Strathclyde students. From one shop in La Coruña, the Zara empire has expanded to more 50 countries. While other giants in the business squeeze their profit margins by manufacturing in bulk and lowering prices, Zara understood that most of the customers are willing to pay for clothes if they feel they are getting exclusive and fashionable clothes. The company can design, manufacture and get a piece of clothing on the shelves in almost two weeks. This rapid supply chain allows Zara's copies to be in their stores before designers even have them in theirs. In summary, Zara has closed the loop from manufacturing to customers¶ hands. They are obsessive about control. Mr. Ortega the CEO of the Inditex, the parent company of Zara, once said that the secret to retail success is to 'have five fingers touching the factory and five touching the customer'.
2 - Introduction Zara is the flagship brand of the Spanish retail group, Inditex SA, one of the super-heated performers in a soft retail market in recent years. The first Zara shop opened its doors in 1975 in La Coruña, GaliciaSpain, the city that saw the Group's early beginnings and which is now home of its central offices. Its stores can now be found in the most important shopping districts of more than 400 cities in Europe, the Americas, Asia and Africa. With year-on-year sales increasing at around 25% over the last 5 years, it has become one of the world¶s fastest growing
Tuesday, September 2, 2008 Zara operation management, A business case! 1- Executive Summary Operations management is in regard to all operations within the organization related activities including managing purchases, inventory control, quality control, storage and logistics. A great deal of focus is on efficiency and effectiveness of such processes. An example of successful operations management in retail sector is obvious in Zara business model which is elaborated and discussed here by a team of MBA Strathclyde students. From one shop in La Coruña, the Zara empire has expanded to more 50 countries. While other giants in the business squeeze their profit margins by manufacturing in bulk and lowering prices, Zara understood that most of the customers are willing to pay for clothes if they feel they are getting exclusive and fashionable clothes. The company can design, manufacture and get a piece of clothing on the shelves in almost two weeks. This rapid supply chain allows Zara's copies to be in their stores before designers even have them in theirs. In summary, Zara has closed the loop from manufacturing to customers¶ hands. They are obsessive about control. Mr. Ortega the CEO of the Inditex, the parent company of Zara, once said that the secret to retail success is to 'have five fingers touching the factory and five touching the customer'.
2 - Introduction Zara is the flagship brand of the Spanish retail group, Inditex SA, one of the super-heated performers in a soft retail market in recent years. The first Zara shop opened its doors in 1975 in La Coruña, GaliciaSpain, the city that saw the Group's early beginnings and which is now home of its central offices. Its stores can now be found in the most important shopping districts of more than 400 cities in Europe, the Americas, Asia and Africa. With year-on-year sales increasing at around 25% over the last 5 years, it has become one of the world¶s fastest growing