...Analyzing Processes Process Diagram: (e.g. Producing Contact Lenses) hold Data information flow Other Common Process Measures • Cycle time – Average time between completion of successive units by the process – Reciprocal of throughput rate Process Layout of a Medical Center – Capacity Analysis Patient Type A B C D Total Patient Mix Wait Area X-ray 0.4 1 1 0.3 1 0.2 1 1 0.1 1 1 1 0.7 1000 400 571 Department Orthopedic Cardinology Neurology Intensive care 1 1 1 1 1 0.4 0.3 0.2 0.4 250 625 500 1667 300 1500 600 1500 add value Utilization = Load Factor = Actual Output Rate Maximum Throughput Demand Rate Capacity Dept. capacity Four General Categories of Production Processes 1. 2. 3. 4. Continuous Flow Process Line Process Batch Process Job Shop Max. # of total 1000 patients arrived before reaching cap. Variability: Classic Queuing arrival rate () in customers/hour • service rate () in customers/hour (avg. time for one customer = 1/) • # servers = s Therefore, capacity = _s*_ • Physics of Queues: M/M/1 system Performance Measures: Utilization: Average time in system = /( Average number in system = /( Average time in line = 1/( Average number in line = 1/( Probability of no waiting = 1 – Process Choice at King Soopers Bakery • Bread process – Flow process – High volume – Difficult and expensive to change capacity Servers (s) customers/hr./server arrivals ( customers/hr.) departures...
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...Chemical Process Diagrams Chapter 1 Department of Chemical Engineering West Virginia University From Analysis, Synthesis, and Design of Chemical Processes, Fourth Edition, by Richard Turton, Richard C. Bailie, Wallace B. Whiting, Joseph Shaeiwitz, and Debangsu Bhattacharyya (ISBN-13: 978-0-13-261812-0) Copyright © 2012 Pearson Education, Inc. All rights reserved. 1 3 Levels of Diagram • Block Flow Diagram (BFD) • Process Flow Diagram (PFD) • Piping and Instrumentation Diagram (P&ID) – often referred to as Mechanical Flow Diagram Complexity Conceptual increases understanding Increases As chemical engineers, we are most familiar with BFD and PFD. From Analysis, Synthesis, and Design of Chemical Processes, Fourth Edition, by Richard Turton, Richard C. Bailie, Wallace B. Whiting, Joseph Shaeiwitz, and Debangsu Bhattacharyya (ISBN-13: 978-0-13-261812-0) Copyright © 2012 Pearson Education, Inc. All rights reserved. 2 1 The Block Flow Diagram (BFD) • BFD shows overall processing picture of a chemical complex – Flow of raw materials and products may be included on a BFD – BFD is a superficial view of facility – ChE information is missing From Analysis, Synthesis, and Design of Chemical Processes, Fourth Edition, by Richard Turton, Richard C. Bailie, Wallace B. Whiting, Joseph Shaeiwitz, and Debangsu Bhattacharyya (ISBN-13: 978-0-13-261812-0) Copyright © 2012 Pearson Education, Inc. All rights reserved. 3 Definitions of BFD • Block Flow...
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...Introduction 2 2. Overview of Zara Corporation 2-3 3. Risk identification and assessment in Zara’s supply chain a. Supply chain and risks management definitions 3-5 b. Supply risks 6-8 c. Technology and facilities risks 8 d. Human rights and cooperate responsibility failures 9-12 4. Conclusion and Recommendation 13 5. References 1. Introduction Supply chains have expanded rapidly over the decades, with the aim to increase productivity, to lower costs and fulfill demands in emerging markets. The increasing complexity in a supply chain hinders visibility and consequently reduces one’s control over the process. Supply chain is one of the key factors for the success of a any businesses in any industries and the textile retailing industry is not an exception. If supply chain is not managed and planned carefully, it will affect directly to firms’ performances. In this essay, the risk in supply chain management of Zara – a high street retailer will be discussed. The essay will identify and assess potential risks...
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...advantages of ZARA (Inditex) over its main competitor. How sustainable is this advantage? (1,5 pages, 10 points) 2) Assume that ZARA is considering to enter the US market. Please recommend actions for ZARA. Please make clear assumptions when necessary. (1,5 page; 10 points). After reading and analyzing the Zara case we came several conclusions when it comes to Zara’s competitive advantage over its competitors. We understood that Zara is using totally distinctive business model compared to other more traditional fashion retailers. In our opinion there are three most important advantages that Zara has over its competitors. These are : IT Software/internal information flow, Factory locations/Geographic placement, Just in Time approach. We believe that these three factor are the main determinants when it comes to Zara’s strong current position on the market. Below I will go more in detail and explain every single factor individually. Software/internal information flow First factor which gives Zara competitive advantage according to me is their software. The fact that all the software (PDA) used currently by Zara is developed by them gives them huge competitive advantage. Having the software developed internally makes it much more efficient and user friendly because it is compatible with the companies daily operations. Everything starting from the operational procedures, performance measures, and even office and store layouts are designed to make information flow simple....
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...systems relate to the way Zara runs its business. What types of systems are the most essential for this company in its current environment? In this new era of globalization, the using of technology has been very common and can be conclude as part of human’s life. In order to survive in today’s challenging business world, every organization has to be confronted with highly competitive pressure to bring out more effectiveness and efficiency when running a business. This case study is about Zara, large international fashion company which known as one of the survivors by successfully overcome the business pressure by implementing new technology system. Zara is known as one of the largest international fashion companies which belong to Inditex, one of the world’s largest distribution groups. This clothing retail group headquartered their first store which located at La Coruna, Spain. By having 531 stores located in 45 countries, Zara carry out their business model by using information system to generate design, production and distribution service through retail network. From production till distribution, Zara choose to manage the entire process by itself because they believe is more efficient and profitable by doing so. It also helps Zara to penetrate fashion trend faster compare to other competitors. Today, Zara works towards their mission by contribute to the sustainable development of society and that of the environment with which customers interact. (Zara, 2012) Basically business...
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...PRACTICES OF ZARA] August 31, 2009 INSTITUTE OF MANAGEMENT TECHNOLOGY, NAGPUR PGDM 2008-2010 SUPPLY CHAIN MANAGEMENT Project Report “Supply chain practices of Zara” Course Facilitator: Prof. Krishnamurthy Venkatramanan Submitted by: Nadeshwar Mukherjee (08FT040) Nandi Ananya Sujit (08HR031) Sorubh Janmeja (08HR094) Rahul Mohata (08IT028) Sunita Rani (08IT039) Prajakta Shinde (08IT057) 1 [SUPPLY CHAIN PRACTICES OF ZARA] August 31, 2009 ACKNOWLEDGMENT This report on “Supply chain practices of Zara” would never have been completed without the support provided by our course facilitator, Prof. Krishnamurthy Venkatramanan. Moreover, we are highly indebted by the internet facilities provided by the members if IT lab. Project Group PGDM 2008-2010 2 [SUPPLY CHAIN PRACTICES OF ZARA] August 31, 2009 TABLE OF CONTENTS SL.NO. PARTICULARS PAGE NO. 1 2 3 4 5 6 7 8 9 10 11 12 Acknowledgement Executive summary Zara – Company Profile Fashion Industry – Overview Fashion Industry – Growth Drivers Zara – Customer & Product Mapping Zara’s key factors of success or winning formulae Zara – Logistics & Supply Chain Is Zara’s competitive advantage sustainable? Learning Zara – In Sum Bibliography 2 4 5 5 6 7 10 12 19 22 22 23 3 [SUPPLY CHAIN PRACTICES OF ZARA] August 31, 2009 EXECUTIVE SUMMARY This project aims at understanding the supply chain practices followed by the fast fashion collection manufacturing company Zara, Spain. It takes...
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...ZARA, IT for Fast Fashion Module 1 A Case Study Prepared by Ritwick Banerjee Date of Submission: 29th September, 2010 Executive Summary My decision is to introduce a new operating system (OS) in segments. The plan identifies a number of non critical stores as pilot case. It introduces the new OS and links the Point of Sales (POS) terminals using internet to the information system at La Coruna. The necessary interface applications get written and tested by the applications development group under the pilot scheme. Training is provided to selected staff. Once the efficiency of the system is established, the existing system gets replaced with the new one in segments. This replaces the phone modem and further cuts down the cost of operation. Zara needs new technology to meet the business strategy, sustain the business plan and create better communication. The operating system DOS is no longer supported by its originator Microsoft. The terminals using DOS should upgrade to Linux operating systems. Exhibit 12 states that one time license cost for Linux system is free. A wireless router will improvise the flow of information with 5 terminals averaging per store. Cost for setting up a wireless router per store is 180 pounds in Exhibit 12. Process Elements Zara is a clothing company founded by Amancio Ortega in 1975 whose business strategy was to meet quickly and accurately the demands of the fashion world. Currently worldwide, there are 531 Zara...
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...Case 1: Zara, H&M, Benetton Supply Chain Strategies | Executive Summary The performance of many organizations is highly dependent on utilizing the correct supply chain model. This report focuses on the analysis of the supply chains of three clothing companies: Zara, Hennes & Mauritz (H&M), and Benetton. The analysis was focused on three aspects. First, the supply chain models of the three retailers were compared and contrasted and there was an evaluation whether each of the retailers has the right supply chains for the type of products they offer. Second, the analysis highlighted how the supply chain architecture of the three companies impacts the management of inventory, information, and capacity. Finally, the analysis also included some research on how the supply chain strategies of these retailers have changed in recent times and its impacts on their relative competitive advantage. Based on the analysis, several recommendations around strategic and process improvement were provided for Zara, H&M, and Benetton. The recommendations are further supported by an implementation plan as well as an overall assessment of the risks that the retailers face. Sources of analysis include the two Harvard Business Review Articles “What is the Right Supply Chain for Your Product” and “Rapid-Fire Fulfillment”. The analysis also utilized several research reports from DataMonitor. Analysis Zara, H&M, and Benetton are all clothing retailers that focus on fashion...
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...Running Head: Zara Case Study Zara – IT for Fast Fashion MGN 562 Team: The Change Agents Drejer Simon ID 315273004 Sharnjeet Kaur ID 315271003 Bilal Khalid ID 315276006 JR Rattaporn Srinok ID 315373001 Zertab Quaderi ID 315276001 Stamford International University, Bangkok February 2016 Table of Contents Abstract 3 Company Overview 4 Current Situation 5 Process Performance Analysis 5 Capacity 7 Efficiency 8 Flexibility 11 Quality 11 Operations Strategy Analysis 15 Root Cause Analysis 16 Cost Benefit Analysis 17 Multi Criteria Decision Making 20 Implementation Strategy 20 Recommendations 22 Conclusions 24 List of references 25 Appendix 26 Team Charter 26 Abstract The case study on Zara is set in August 2003 when the head of IT and the technical lead for the POS system are arguing about whether or not to upgrade the operating system of the POS terminals from DOS. The paper examines the operations management of Zara to see whether an updated IT system should be in place or not. It analyses the operations design and strategy of Zara in detail to justify an upgradation of their IT system. It also examines the areas where an updated IT can add value to the operations and ultimately, to the consumers. Several tools and methods have been applied to arrive at a decision. Recommendations and implementation strategy are outlined for better management decision making. Company Overview Inditex, the holding company of Zara, was founded...
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...The case of Zara – The Postponement strategy I) Introduction In order to compete in the world of rising globalization and shortening of product life cycle nowadays, firms have to deal with the demand for increasing product variety to meet the diverse needs of customers. Mass customization has become a requirement for many businesses especially in the dynamic, fast-changing industries. However, the more product varieties, the more difficult it is to forecast demand, control inventory and manufacture. Therefore, some innovative companies have integrated “postponement” strategies with their supply chain operations to gain control of product variety proliferation. Zara is one of the most successful fast-fashion chains in the world, which is famous for its ability to keep itself up to date with fashion trends and the incredibly short time to introduce new products. In order to react quickly to fashion changes and consumer demand, Zara maintains extremely efficient supply chain operations. By properly designing the product structure and the manufacturing and supply chain process, Zara can delay the point in which the final products assume their specific characteristics, thus raising the flexibility to handle the changing demand for the multiple products. This is known as the “postponement” approach. In this paper, we will analyze how Zara achieves mass customization through “postponement”, with a particular focus on the supply chain structure, relationship and enabling activities...
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...Zara – Rapid Fire Fulfillment Donald R. Lile BUS – FP3022_assessment 1_1 Fundamentals of Supply Chain Management 3/2/16 Author Note Correspondence concerning this paper should be addressed to Donald R. Lile, Student Capella University, 225 S. 6th St. Minneapolis, MN 55402 dlile@capellauniversity.edu Zara – Rapid Fire Fulfillment Ferdows, Lewis, and Machuca, (2004). Zara, a Spanish clothier has been successful because of the ability to sustain an environment that optimizes the entire supply chain rather than each step. This assessment will identify why the company’s supply chain strategy is successful. This research will also examine how the fast response and information infrastructure aids in this success. And finally, and analysis will be completed on how the company’s unique replenishment strategy satisfies customers. Supply Chain Strategy Ferdows, Lewis, and Machuca, (2004). In an industry where the trend is to outsource, Zara bucks the system. Instead Zara keeps almost half its production in house. Zara designs and manages its rapid-fire supply chain by reinforcing three principles: 1. Close the communication loop 2. Stick to a rhythm across the entire chain 3. Leverage your capital assets to increase supply chain flexibility Zara customers can always find new products on the shelves, but they are in limited supply. Zara designers create approximately 40,000 new designs each year. From these new...
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...Executive Summery The Zara case study is a case of the fundamental of whether or not to upgrade an IT system which already works, in this case a POS operating system that uses DOS, to more modern operating systems that includes more functionality to meet new demands. Zara is a chain fashion store around Europe, Middle East, Africa, and South America that was founded by Amancio Ortega, in 1975. The first store and main headquarters was found in La Cournia, Spain. Mr. Ortega believed and implemented his business model that: Retailing and manufacturing needed to be closely linked. This created the backbone for Zara’s everyday functionality to have all the stores communicate with the main distributors and distribution centers (DCs) which in turn communicated directly to the manufactures. As a result, supply was meet with demand with ease and little latency. This was all made possible through the use of technology and Zara’s IT department. Salgado Badas, the head of the IT, along with Bruno Sanchez Ocampo, were the main decision makers and brains behind the IT of Zara. For the past decade, Zara has implemented POS systems in each store that would have a direct connection via modem to the main headquarters in La Coruna. Managers on a daily basis transmit comprehensive sales information and other data back to La Coruna. In 2003, PDA’s were also used for ordering and also for tasks such as handling garment returns to DCs and transmitting information from headquarters to all...
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...CASE OF ZARA FASHION CHAIN Sunhilde CUC, Simona TRIPA University of Oradea, Faculty of Textiles and Leatherworks, e-mail: hectic@rdslink.ro, tripasimona@yahoo.com, Keywords: Company Strategy, Competitive Advantage, Operational Effectiveness, Strategic Positioning Abstract. In this case study we want to analyse this phenomenon called Zara, a strategic unit of the Inditex Group, and evaluate the strategies of Zara on the European fashion market. Finally within the clothing market, it shows the competitive advantage gained through modern systems by comparing Zara to its opponents. 1. COMPANY PROFILE Firms strive for sustainable competitive advantage, financial performance that consistently outperforms their industry peers. The world is so dynamic, with new products and new competitors rising seemingly overnight, that truly sustainable advantage might seem like an impossibility. But there are winners and the Zara chain is one of them. The Zara fashion chain, founded in 1975 in Arteixo, a small town in the north of Spain, is perhaps the world's most successful clothing chain. Zara has helped its parent, the Spanish firm Inditex, grow from obscurity in the mid 90s to the world's third largest pure-play fashion retailer after the Swedish H&M and US-based Gap Inc. with financial performance well ahead of these rivals. The Inditex Group is present in 64 markets in Europe, the Americas, the Middle East, Asia and Africa, with upwards of 3,100 stores [8]. In addition to Zara Inditex...
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...and manufacturing with distribution, when creating ZARA in 1975 in la Coruña, Spain Zara came under the holding company Inditex in the year 1985 and is today the biggest fashion brand of the group. Zara believes that the prime factors for running a successful business are quick response to customers, use of computers, and disintegrated decision-making (McAfee, Dessain, & Sjoman, 2007) Inditex has a total of 1,558 stores operating in 45 countries out of which 550 stores are of Zara. Inditex’s major sales contribution is Zara accounting for 73.3%. Zara presents new style clothes for Men, Women, and Children along with reasonable prices. (McAfee, Dessain, & Sjoman, 2007) Women clothing accounts for 60% of Zara’s revenue. It has built up a business model to sell the garments by following trends and style, with virtually no advertising and trust the choices of store managers which is called as "commercials" on what garments should to be in stores. (McAfee, Dessain, & Sjoman, 2007) Value Chain Model: Zara currently uses the value chain model (concept originally proposed by Michael Porter), which is helpful to access areas of weakness and strengthen them to achieve profit and competitive edge. This model helps decision-making that can implement IT or add value to the products and services. The chain mainly consists of six Primary activities and three Support activities. (Kroenke, 2012). Problems that Zara might face in its primary activities when its operations...
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...Executive Summary Zara has relied on Personal Digital Assistants (PDA’s) and Point of Sales (POS) terminal operating on Microsoft DOS which are not linked to the headquarters or other stores for its daily transactions. Although, the system has proved to be stable and reliable over time, it has become obsolete and cannot be supported by the providers. I recommend that the company invest on a new system like Windows, UNIX or Linux operating system which will enhance connectivity and flexibility in operations and information flow. Investing in a cutting edge technology though may be capital intensive initially; it will ultimately improve efficiencies across board and provide new learning opportunities for the entire workforce. Introduction Zara is a division of the Inditex group, a multinational clothing retailer and manufacturer with headquarters in La Coruna, Spain. Inditex operates in a `fast fashion` industry and in an environment where consumer demand was notoriously hard to forecast. The first Zara store was opened in 1975 near the factory. Today, Zara has over 650 stores spread across 50 countries around the world located in luxury shopping districts that attracts well-heeled customers. As part of an integrated group that includes, fabric, dye making and computer aided (CAD) cloth making factory, Zara contributes over 73.3% of the group’s sales in 2002 fiscal-year and the most profitable. Almost half of Inditex revenue is gotten in Spain while...
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