Zara–Rapid Fire Fulfillment Assessment
Terry Lawler
August 10, 2013
BUSM3022
Foundations of Supply Chain Management
Zara–Rapid Fire Fulfillment Assessment
Bob Goldwasser
Introduction “Do everything possible to let one hand help the other. And whatever you do not take your eyes off the product until it’s sold.” Amancio Ortega
This paper will present information on Zara Europe's fastest growing apparel retailer who has about 1500 stores in major cities around the globe. This paper will explain why the company's supply chain strategy is successful. It will also explain what advantage Zara has against the competition by having a very responsive supply chain. Next this paper will explain what advantage Zara gains from replenishing its stores multiple times a week compared to a less frequent schedule and how the frequency of replenishment affects improved customer satisfaction. Finally, this paper will provide information on infrastructure Zara needs in order to operate its production, distribution, and fast fashion retail network effectively.
Strategy
Zara’s owner and management have a strategy that is known as, precise rhythm. This means orders are sent in twice a week to keep merchandise fresh. They can keep a variety of merchandise in stores for customers purchase. Out of stock items are less of an issue because Zara continues to have new products to choose from (K., Ferdows, M. A. Lweis, J.A.D. Machuca, 2004).
Advantage
First, they have control on their inventory. Their process is to only have a limited amount on hand so a particular product will sell out so others will be purchased (K., Ferdows, M. A. Lweis, J.A.D. Machuca, 2004). This also allows for the new products to be brought on a continual basis. Higher profit margins are the end result. They also take the information customers want and can immediately send it to designers for production (K., Ferdows, M. A. Lweis, J.A.D. Machuca, 2004).
Second, they have a rhythm they stick to that keeps orders filled in a timely manner so all
August 10, 2013
BUSM3022
Foundations of Supply Chain Management
Zara–Rapid Fire Fulfillment Assessment
Bob Goldwasser
Introduction “Do everything possible to let one hand help the other. And whatever you do not take your eyes off the product until it’s sold.” Amancio Ortega
This paper will present information on Zara Europe's fastest growing apparel retailer who has about 1500 stores in major cities around the globe. This paper will explain why the company's supply chain strategy is successful. It will also explain what advantage Zara has against the competition by having a very responsive supply chain. Next this paper will explain what advantage Zara gains from replenishing its stores multiple times a week compared to a less frequent schedule and how the frequency of replenishment affects improved customer satisfaction. Finally, this paper will provide information on infrastructure Zara needs in order to operate its production, distribution, and fast fashion retail network effectively.
Strategy
Zara’s owner and management have a strategy that is known as, precise rhythm. This means orders are sent in twice a week to keep merchandise fresh. They can keep a variety of merchandise in stores for customers purchase. Out of stock items are less of an issue because Zara continues to have new products to choose from (K., Ferdows, M. A. Lweis, J.A.D. Machuca, 2004).
Advantage
First, they have control on their inventory. Their process is to only have a limited amount on hand so a particular product will sell out so others will be purchased (K., Ferdows, M. A. Lweis, J.A.D. Machuca, 2004). This also allows for the new products to be brought on a continual basis. Higher profit margins are the end result. They also take the information customers want and can immediately send it to designers for production (K., Ferdows, M. A. Lweis, J.A.D. Machuca, 2004).
Second, they have a rhythm they stick to that keeps orders filled in a timely manner so all
Cited: K., Ferdows, M. A. Lweis, J.A.D. Machuca. (2004). Rapid Fire Fulfillment. Harvard Business Review, 109.