Zara- Rapid-Fire Fulfillment
Zara-Rapid Fire Fulfillment
BUS3022/Fundamentals of Supply Chain Management
August 19, 2013
Oliver Schwabe
Zara-Rapid Fire Fulfillment
It is becoming apparent that the ever changing environment in the global marketplace requires a swifter response time from businesses and their supply chains. The era when production was moved overseas, so businesses can take advantage of low-cost labor is coming to an end, because businesses are not only competing on price but also on time. The owner of Zara, a Spanish clothing store knows this first hand, and has turned supply chain management on its ear, making his company the “envy of the industry” (Ferdows, Lewis, & Machuca, 2004). Zara’s owner; Amancio Ortega, learned early that it is imperative to “control what happens to your product until the customer buys it” (Ferdows, Lewis, & Machuca, 2004, para. 3). Supply Chain Management (SCM) is the reason for success in the fast fashion business. Its dealings are with suppliers and their suppliers, and with customers. It must take into account all the processes from raw materials origin to customer utilization. The productivity of a supply chain is not just the product, but also a combination of place, time, function and form of that product. The way Zara runs its supply chain is so different from others as to appear illogical, however, if we look at Zara’s financials we can see that it works. According to Ferdows, Lewis & Machuca, (2004), “Zara defies most of the current conventional wisdom about how supply chains should be run” (p. 106 para 2). Zara’s creation of an agile supply chain (ASC) is the reason for its success. The whole process of the supply chain in Zara could be divided into four parts: product organization and design; purchase and production; product distribution; sales and feedback. According to Zhang (2008) “the main duty of ZARA’s designers is not for product innovation, but for reorganizing fashion elements of the existed
BUS3022/Fundamentals of Supply Chain Management
August 19, 2013
Oliver Schwabe
Zara-Rapid Fire Fulfillment
It is becoming apparent that the ever changing environment in the global marketplace requires a swifter response time from businesses and their supply chains. The era when production was moved overseas, so businesses can take advantage of low-cost labor is coming to an end, because businesses are not only competing on price but also on time. The owner of Zara, a Spanish clothing store knows this first hand, and has turned supply chain management on its ear, making his company the “envy of the industry” (Ferdows, Lewis, & Machuca, 2004). Zara’s owner; Amancio Ortega, learned early that it is imperative to “control what happens to your product until the customer buys it” (Ferdows, Lewis, & Machuca, 2004, para. 3). Supply Chain Management (SCM) is the reason for success in the fast fashion business. Its dealings are with suppliers and their suppliers, and with customers. It must take into account all the processes from raw materials origin to customer utilization. The productivity of a supply chain is not just the product, but also a combination of place, time, function and form of that product. The way Zara runs its supply chain is so different from others as to appear illogical, however, if we look at Zara’s financials we can see that it works. According to Ferdows, Lewis & Machuca, (2004), “Zara defies most of the current conventional wisdom about how supply chains should be run” (p. 106 para 2). Zara’s creation of an agile supply chain (ASC) is the reason for its success. The whole process of the supply chain in Zara could be divided into four parts: product organization and design; purchase and production; product distribution; sales and feedback. According to Zhang (2008) “the main duty of ZARA’s designers is not for product innovation, but for reorganizing fashion elements of the existed
References: Bruce, M. & Daly, L. (2006). Buyer behavior for fast fashion, Journal of Fashion Marketing and Management , Vol. 10 No. 3 , pp. 329-344 Chopra, S., & Meindl, P. (2012). Supply chain management: Strategy, planning, and operation. Upper Saddle River, NJ: Prentice-Hall. Ferdows, K., Lewis, M., & Mahuca, J. (2004, November). Rapid-Fire Fulfillment. Harvard Business Review, 82(11), 104-110. EBSCO Host. Porter, M. E. (1980) Competitive Strategy: Techniques for Analyzing Industries and Competitors, Free Press, New York. Qinghua Zhang (2008). Analysis on the Successful Case of Efficient Supply Chain in ZARA, ISBN: 978-1-4244-2107-7, pp. 1-4 Rohwedder, C., and Johnson, K., "Pace-Setting Zara Seeks More Speed to Fight Its Rising Cheap-Chic Rivals", The Wall Street Journal, Feb. 20, 2008. Tiplady, R. (2006). “Zara: Taking the Lead in Fast Fashion”, BusinessWeek