Zara defines most of the current conventional wisdom about how supply chains should be run. In fact some of zara's practices may seem questionable, if not downright crazy ,when taken individually . Unlike so many of its peers in retail clothing that rush to outsource, zara keeps almost half of its production in-house. Far from pushing its factories to maximize their output, the company intentionally leaves extra capacity.
Rather than chase economics of scale, zara manufactures and distributes products in small batches. Instead of relying on outside partners, the company manages all design, warehousing, distribution, and logistics functions itself. Even many of its day-to-day operational procedures differ from the norm. It holds its retail stores to rigid timetable for placing orders and receiving stock. It puts price tags on items before they're shipped, rather than at each store. It leaves large areas empty in its expensive retail shops. And it tolerates, even encourages, occasional stock-outs.
Under computerized system, the company reduced its design to distribution process to just 10 to 15 days. Rather than placing the design burden on a single designer , the company developed its own in-house team of designers-more than 200 by the turn of the 21st century- who began developing clothes based on popular fashions , while at the same time producing the company's own designs .In this way , the team was able to respond almost immediately to emerging consumer trends as well as to the demands of the company's own customers – for instance , by adding new colors or patterns to existing designs .State-of-the-art production and warehousing procedures , as well as the installation of computerized inventory systems linking stores to the company's growing number of factories , enabled the company to avoid taking on the risk and capital outlay of developing and maintaining a