Zara’s supply chain strategy is successful because everything is controlled in house. They control all aspects of the process and have no middle person to deal with. Zara’s supply chain is organized to transfer both hard data and anecdotal information quickly and easily from shoppers to designers and production staff. It’s also set up to track materials and products in real time every step of the way, including inventory on display in the stores (HBR). By controlling over half of its production in house and producing in small batches the company can control inventory and the money involved better than other retailers who outsource most of its production and purchase in large batches.
Zara has made major capital investments in production and distribution facilities and uses them to increase the supply chain’s responsiveness to new and fluctuating demands. It produces complicated products in-house and outsources the simple ones (HBR). Zara’s supply chain allows it to get new product to all its stores across the world in 15 days. With a 15 day turn around, it allows Zara who only ships small batches of product to their store’s a chance to refill product as soon as it runs out in store. These advantages allow Zara to have almost a 15% higher margin rate than other retailers.

By replenishing stores multiple times a week compared to a less frequent schedule has two major advantages. First it allows the company to invest less money into Inventory which will allow the company to not have money sitting around stores for a very long time. For example, if you owned a store and sent 50 of the same shirts to that store at one time and it took 3 months to sell through the shirts, not only is there money tied up in the product but you are also putting man hours into mark downs. If you sent 10 shirts and then as you sold through those 10 shirts you automatically reorder what