Zara's Supply Chain

In: Business and Management

Submitted By civitella
Words 4301
Pages 18
Case Study – Zara

Abstract
The competition of current clothing industry is very fierce and Zara has many competitive advantages in this competition. This paper will analyze on about how the information technology help Zara to make decisions and make their performance more speed. First, a case review from Harvard Business Review will be covered in the introduction to show an overview of current Zara’s business model. Second is the Michael Porter’s model analysis based on Zara that including three generic strategies and five forces. Third, some of IT applications are really help the Zara to make their business more efficient, the applications will be applied in the Enterprise Resource Planning (ERP), Supply Chain Management (SCM) will emphasize a speed supply chain for Zara, and Customer Relationship Management (CRM). Finally is about the relationship between Zara and Peter Drucker’s theory, Zara and Andrew McAfee’s theory, Zara and Hey’s theory. The last part will conclude where is Zara today and make brief recommendations.

Table of Contents

Introduction 4
Zara and Michael Porter’s Model 5
Generic Competitive Strategies Analysis for Zara 5
Five Forces Analysis for Zara 6
Suppliers Bargaining Power 6
Buyer Bargaining Power 7
Threat of New Entrants 7
Threat of Substitute 8
Industrial Competitors 9
The Value Chain of Zara 10
Enterprise Resource Planning (ERP) 11
Supply Chain Management (SCM) 11
Customer Relationship Management (CRM) 13
Zara and Peter Drucker’s theory 13
Zara and Andrew McAfee’s theory 14
Zara and Tony Hey’s Theory 15
Conclusion 16
Recommendations 16
Appendix 18
References 19

Introduction
Inditex is a largest fashion ground in Spain and owns 9 brands around the world, such as Zara, Massimo Dutti, Bershka and so on. Zara is the most successful brand for the Inditex group. The data from Harvard Business…...

Similar Documents

Supply Chain

... and capabilities and all is dialed down for assembly, and the proximity and open market of the multiple EU countries involved in the production that takes out the need of the transportation issues and logistics. 2. Why your Beer Game performance cannot be considered as a component of your final grade in this seminar? The beer game performance is an example of how crucial communication is in the supply chain process. The game where each different station in the production process gives its estimates (that are mostly wrongful guesses) of what will be needed for production only increases the gap between forecasted and actual (bullwhip). The beer game is bound to make you wrong by fluctuating once or twice its demand level and remaining constant throughout the game, something that also cannot be real, and by doing so obliges you to stock some products in Lou of the expected fluctuation. In a supply chain that focuses strictly on information gathered by only one division of the team rather than a full transparency between all the different processes is bound to be mistaken and so cannot be blamed on the student’s performance or efforts. 3. No team in SILOG reached a service level of 100%. Comment about the causes of this fact. No team in SILOG reached a 100 % service value as none of us where able to estimate how much investment is needed in order for our plant to function at a 100 % capacity due to our lack of understanding of the product and order variations...

Words: 1630 - Pages: 7

Supply Chain

...: figure out whether we should build factory and warehouse in specific region. estimate the demand of four region and Fargo region, change capacity, adjust order point, quantity, and priority order, check and adjust parameters from time to time * When supply > demand, level strategy. * When demand > supply, ‘best way to sell’ instead of ‘fast way to sell’ Lower cost all the time: * No mail transportation in bound all the time * Full truck all the time * Use minimum fulfillment cost, $150, all the time * Isolate Fardo region As in part one of the Supply Chain Game, we were given the option to use trucks as a shipping method. This method can make or break your bottom line because it is an expensive option if you are not utilizing it properly. The cost of using this shipping method is still $15,000 whether the truck is in full or partial methods. The importance of running this part of the operation to perfection is in the numbers. A truck that leaves at half capacity (100 drums) is only generating $145,000 on that run, whereas a full truck would yield $290,000. Of course not all of that is profit, the price of the truck and the production costs need to be factored in. However, even in doing so the numbers consistently show that trucks fill to capacity will always be more profitable. As in the first part of the simulation there are many different costs and benefits that lead us to our decision on which shipping method to use. Here is the......

Words: 1273 - Pages: 6

Supply Chain

...In today’s competitive SCM market, it’s not so much about having the best company anymore, but more importantly who has the supply chain, and who can get the product out to meet standards of the customer? Supply chain managers are continuously faced with this major challenge from the top of their supply chain operations to the bottom. Effective supply chain management of an enterprise reduces costs, lead times, and inventories throughout the entire supply chain. Customers want the ‘perfect orders’ and expectations to reduce manufacturing costs put corporate supply chains under immense pressure. As a result, supply-chain management and infrastructure plays a significant role in organizational strategy and how a facility chooses to set up their operation. A. Analyze whether a Keiretsu network (Keiretsu: a Japanese term that describes suppliers who become part of a company coalition), a virtual company, a vertical integration, or a different supply chain strategy should be adopted. A virtual company strategy would not work for this type of operation because “vertical integration is counter to the benefits of specialization” (Heizer and Render, 2010). In this model of supply chain, the demands of more specialized products exist and there is more flexibility to waiver from centralized suppliers than Keiretsu or vertical integration offers. Much of This “fluidity” may allow for too much variability within and there is no sustainability as contracts can be short...

Words: 1235 - Pages: 5

Supply Chain

...Journal of Media Economics, 23:143–164, 2010 Copyright © Taylor & Francis Group, LLC ISSN: 0899-7764 print/1532-7736 online DOI: 10.1080/08997764.2010.502514 Adoption of Mass-Customized Newspapers: An Augmented Technology Acceptance Perspective Johannes Putzke, Detlef Schoder, and Kai Fischbach Department of Information Systems and Information Management University of Cologne, Germany The authors propose an augmented version of the Technology Acceptance Model to examine the consumer acceptance of mass-customized (MC) newspapers. Model findings (n D 2,114) suggest that the customer’s willingness to invest effort for MC products is one of the main factors driving adoption. Furthermore, gender is found to moderate the relation between base category satisfaction (with the base category “newspaper”) and perceived usefulness of an individually printed daily newspaper. Mass Customization (MC) products are one of the emerging research trends in management (Arora et al., 2008). Although considerable research has been devoted to MC in supply chain management (e.g., Dean, Xue, & Tu, 2009), innovation management (e.g., Franke, Keinz, & Schreier, 2008; Kaplan & Haenlein, 2006), and marketing (e.g., Syam & Kumar, 2006), rather less attention has been paid to MC in media economics (e.g., Franke, Keinz, & Steger, 2009; Franke & Schreier, 2002; Ihlström & Palmer, 2002; Kaplan, Schoder, & Haenlein, 2007; Schoder, Sick, Putzke, & Kaplan, 2006). Hence, there remains a...

Words: 727 - Pages: 3

Supply Chain

... and supply the test data, with the shipment, to the buying firm. If the seller does the requisite outgoing quality checks and can be depended on to do them correctly, the buying firm then can eliminate its incoming inspection procedures and attendant costs. This approach almost always is a key element in any just-in-time purchasing system. | | | | Risk-management strategies: | Risks in the supply chain can be classified into three main categories: (1) operational: the risk of interruption of the flow of goods or services, (2) financial: the risk that the price of the goods or services acquired will change significantly, and (3) reputational risk. | | | | A strategy: | an action plan designed to achieve specific long-term goals and objectives. | | | | Supply chain support strategies: | Designed to maximize the likelihood that the considerable knowledge and capabilities of supply chain members are available to the buying organization. | | | | Zero defect (ZD) plans. | "Do it right the first time" is far more cost-effective than making corrections after the fact. |...

Words: 359 - Pages: 2

Supply Chain

... intricate combination of powerful branding, targeted marketing, stylish design, electrical components, mechanical structure, operating software, connected applications from third-party developers, and global launch initiatives. Considering the rapid development cycles and the need for multiple suppliers’ contributions to work in harmony — from both a product perspective and a supply chain perspective — it is amazing that these products can be launched with any level of quality and market success. Other products have different complexities in product development, but a core theme identified in these projects is the need for people to contribute to different aspects of the project simultaneously, while keeping the product and the project working as a whole. Although the “lifecycle” aspect of product lifecycle management (PLM) stands out and attracts attention, product innovation is as much about broadening the view on product development across departments and the value chain as it is about managing the different stages of a product’s life. Turning a concept into a profitable product or product platform is not an easy task, and requires coordinating the innovation efforts of many to meet a common goal. The following is a partial list of the teamwork required for a product to successfully come to market: • • • • Marketing must understand what will motivate customers to buy the product, quantify the market opportunity, and commercialize the product. Engineering/Design must......

Words: 5072 - Pages: 21

Supply Chain

...· Location of Business · Suppliers and Supply Chain · Shipping & Storage of Inventory · Equipment Needed How will you acquire, process store and distribute all the necessary materials? Why did you choose a specific supplier? Location The TJX's Corporate Headquarters are located in Framingham, Massachusetts. The proposed business location for the Cartsaurus will be in Boston. This is an excellent location to serve our target market. Because we are first focusing on selling our product to TJX Companies and it’s easier for us to communicate issues about business. The company will be located on high traffic commuter routes. Locating a facility with easy access to natural resources or suppliers helps we keep transportation costs low. Suppliers Cartsaurus is currently in trial run and we planned to make 1000 shopping carts as variability test in 50 TJMaxx and Marshalls stores. Company is in negotiations with two Kansas manufacturers to supply shopping carts. It will establish a relationship with a reputable shipping company and a freight agent to aid in the smooth transition of product from the manufacturer to our distribution center. Cartsaurus wishes to establish long-term loyal relationships with its suppliers. Factors such as history, reliability, reputation, delivery system, service, product guarantees and liability issues will be crucial in the final decision. Due to the company's expansion plans in years two and three, it is......

Words: 278 - Pages: 2

Supply Chain

... a wide range of Snacks and Beverage for both National & International market alike. AFBL is a project worth $ 70 million& is funded by the parental company Akij Group. FARM FRESH MILK: The FARM FRESH MILK is a brand of milk and milk made product of Akij Food & Beverage Ltd. Farm fresh milk consists of UHT milk, pasteurized milk, chocolate milk, mango milk, butter, clarified butter (Ghee) and yogurt. The brand entered the market in September in 2007. Firm Fresh Milk Supply Chain: Supply chain means managing upstream and downstream value-added flows of materials, final goods, and related information among supplier, the company, resellers, and final consumers. Firm Fresh the upstream and downstream value-added flows of raw materials, final goods, and related information among supplier, the company, resellers, and final consumers. The figure in bellow described the Firm Fresh supply chain stage: Fig: Stages of Firm Fresh Milk Supply Chain. Farmers: At first, raw material (milk) is supplied by farmers to the Firm Fresh. About 7,500 dairy farmers supplied Firm Fresh in FY2008. Today there are 19,000. Most farmers live in Pabna and Sirajgong( Shahajadpur). Of the 45-50 thousand liters collected 32-35 thousand are now supplied from Pabna and another 3,000-4,000 are received from Shahajadpur (of Sirajgonj district). Historically Shahjadpur and Pabna are the highest milk producing areas and for this reason the plant of Firm Fresh is established there...

Words: 1058 - Pages: 5

Supply Chain

...CURRENT CHALLENGES OF SUPPLY CHAIN MANAGEMENT Acknowledgement It is only because of the grace and mercy of great Almighty ALLAH that we are able to complete our report. Without His help, in no way we could complete it. We are highly indebted to honor Sir Shoaib Ishtiaq (Bahria University) for assigning us such an important and interesting report and for his valuable guidance in carrying out this research study which benefited during our course work in the university. We would also like to extend our gratitude towards the internet & books which helped us greatly. And on the other hand all those people who were directly and indirectly involved in the completion of this project. ABSTRACT Purpose : As the business environment becomes increasingly competitive, companies continuously look for ways to distinguish themselves from their competitors. Companies adapt different Supply Chain Management practices and philosophies to help them become competitive. However, they may face challenges that hinder attainment of the results sought. Here is the study of few challenges that supply chain management are facing in today’s world and some strategies propose to cope up with those challenges. Methods : Firstly the major challenges were search and then some strategies were purpose to cope up with those challenges of supply chain management by giving the examples of case study than how in past companies have faced those challenges and they were not able to...

Words: 8071 - Pages: 33

Supply Chain

...Map the Supply Chain Lydia Federico MKT/421 November 24, 2014 Richard Theroux Map the Supply Chain The area of business that had decided to research is the world of perfumes and colognes industry. When discussing the supply chain of perfumes and colognes production, it is important to discuss both their "brick and mortar" facilities and their organizational web sites. Both the "brick and mortar" facilities and the web sites play a vital role in the success of modern day fragrances industry, so it is important to discuss both. First, the "brick and mortar" environment supply chain.  Describing the supply chain of a traditional "brick and mortar" perfume industry is very similar to explaining the supply chain of a typical business-to-consumer organization. The suppliers provide the materials to create the samples for each fragrance and cologne to be created at different laboratories. The laboratories have the main responsibility of manufacturing the fragrance substances, the formulation of fragrance compounds, the mixing of fragrance substances into fragrance compounds, the formulation of fragranced end-products. They are also responsible for Industrial and professional end-use of washing and cleaning products as well as end-use of polishes and wax blends. All of this needs to be done in order for the fragrances to be safe for the consumer and also for the environment. “The use is considered safe. If the same target is exposed to one substance through...

Words: 797 - Pages: 4

Supply Chain

...Lacey Edwards Memorial University OF NEwfoundland Student Number: 201135217 Lacey Edwards Memorial University OF NEwfoundland Student Number: 201135217 Inventory Essay Business 6415 – Supply Chain Management Inventory Essay Business 6415 – Supply Chain Management Risk pooling is a powerful tool that addresses the variability in the supply chain because it suggests that demand uncertainty can be reduced if a company combines the demand uncertainty from across locations into one. This theory is based on the fact that high demand from one customer will be offset by low demand from another and likewise. As well, this may impact the average inventory because the demand variability may cause a decrease in safety stock (Piramanayagam, 2009). This report will provide a general overview of risk pooling which will include several types of risk pooling, three critical points of risk pooling, as well as examples where risk pooling is critical during supply chain decision making. Piramanayagam (2009) suggests that the concept behind risk pooling is to redesign the supply chain through the production process or product in order to reduce the demand uncertainty or facilitate a company’s needs when dealing with demand uncertainty and there are several types of risk pooling that allows a company to accomplish this: lead-time pooling, capacity pooling, product pooling, and location pooling. Lead-time pooling is when lead-time is reduced by introducing a distribution center...

Words: 955 - Pages: 4

Supply Chain

...1. The different between push and pull supply chain. Answers: 1. A “push” promotional strategy makes use of a company's sales force and trade promotion activities to create consumer demand for a product. The producer promotes the product to wholesalers, the wholesalers promote it to retailers, and the retailers promote it to consumers. A good example of "push" selling is mobile phones, where the major handset manufacturers such as Nokia promote their products via retailers such as Carphone Warehouse. Personal selling and trade promotions are often the most effective promotional tools for companies such as Nokia - for example offering subsidies on the handsets to encourage retailers to sell higher volumes. A "push" strategy tries to sell directly to the consumer, bypassing other distribution channels (e.g. selling insurance or holidays directly). With this type of strategy, consumer promotions and advertising are the most likely promotional tools. Pull A “pull” selling strategy is one that requires high spending on advertising and consumer promotion to build up consumer demand for a product. If the strategy is successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers. A good example of a pull is the heavy advertising and promotion of children's’ toys – mainly on television. Consider the recent BBC promotional campaign for its new pre-school programme – the Fimbles...

Words: 13444 - Pages: 54

Supply Chain

...CHAPTER TWO  Supply Chain Management Chapter 2 Supply-Chain Management PROBLEMS 1. Buzzrite Company a. Current Year’s average aggregate value = $48,000,000/6 = $8,000,000 Next year’s average aggregate inventory value = ($48,000,000 × 1.25)/6 = $10,000,000 Increase in the average aggregate inventory value = ($10,000,000 – 8,000,000) = $2,000,000 b. Number of turns to support next year’s sales with no increase in inventory value = (1.25)(6) = 7.5 turns. Thus, the change in inventory turnover = new – old = 1.5 inventory turns, or 25% higher inventory turns. 2. Precision Enterprises. Average aggregate inventory value = Raw materials + WIP + Finished goods = $3,129,500 + $6,237,000 + $2,686,500 = $12,053,000 a. Sales per week Weeks of supply b. Inventory turnover 14 = Cost of goods sold/52 weeks per year = $32,500,000/52 = $625,000 = Average aggregate inventory value/ Weekly sales = $12,053,000/$625,000 = 19.28 wk = (Annual sales)/(Average aggregate inventory value) = $32,500,000/$12,053,000 = 2.6964 turns/year CHAPTER TWO  Supply Chain Management 3. Sterling Inc. a. Average Inventory (units) Part Number RM-1 RM-2 Value ($/unit) 20,000 5,000 RM-3 RM-4 WIP-1 WIP-2 FG-1 FG-2 1.00 5.00 3,000 1,000 6,000 8,000 1,000 500 44,500 Total Value ($) 20,000 25,000 6.00 8.00 10.00 12.00 65.00 88.00 18,000 8,000 60,000 96,000 65,000 44,000 336,000 Average aggregate...

Words: 15067 - Pages: 61

Supply Chain

...The effect of strategy on the use of supply chain management tools – exploratory survey in the Hungarian automotive industry István Jenei1, Krisztina Demeter2, Andrea Gelei3 Budapest University of Economic Sciences and Public Administration, Hungary Abstract Supply chain management (SCM) usually goes beyond company boarders. Cooperating parties are required, who decide to work together. The way how this cooperation evolves depends on the strategies and practices of the parties. In this paper we examine the connection between strategies and SCM practices. Our objective is to analyze how strategy determine the SCM tools used among supply chain parties. The analysis is based on 17 interviews within two supply chains from the Hungarian automotive industry, where supply chains are defined through the car makers (Audi, Suzuki) as focal companies. Our results support the proposition that the connection between strategy and supply chain tools (configurations and practices) is very strong. It is underlined with not only the comparison of the two supply chains but can also be detected in the strategic change at one of the focal companies which resulted in supply chain changes, as well. Besides the main objective a detailed view is provided about the past, present and future of the Hungarian automotive industry. Keywords: Supply chain, supply chain management, strategy, automotive industry, Hungary Introduction content of strategy is required to operate...

Words: 7204 - Pages: 29

Supply Chain

...| | McDonald’s Supply Chain | | | | | | | | | Contents Introduction 3 History 3 McDonald’s in India 4 Supply Chain of McDonald’s 5 Introduction 5 Incorporating Chill Zones – The McDonalds Cold Chain 6 Validation of McDonalds Cold Chain 8 McDonalds Suppliers and Distributors 10 Outsourcing of Ingredients 12 McDonald's Supply Chain – Challenges 19 Conclusion 20 References 21 Introduction McDonald's is the leading global foodservice retailer with more than 32,000 local restaurants serving more than 60 million people in 117 countries each day. More than 75% of McDonald's restaurants worldwide are owned and operated by independent local men and women. McDonald's predominantly sells hamburgers, various types of chicken sandwiches and products, French fries, soft drinks, breakfast items, and desserts. In most markets, McDonald's offers salads and vegetarian items, wraps and other localized fare. This local deviation from the standard menu is a characteristic for which the chain is particularly known, and one which is employed either to abide by regional food taboos (such as the religious prohibition of beef consumption in India) or to make available foods with which the regional market is more familiar (such as the sale of McRice in Indonesia). History The business began in 1940, with a restaurant opened by siblings Dick and Mac McDonald in San Bernardino, California. Their introduction of the "Speedy Service System...

Words: 4390 - Pages: 18