Introduction
Zara is a Spanish brand dealing in clothes and accessories. Presently, Zara owns and manages more than 650 stores operating in about 50 countries around the globe. While a considerable number of its competitors in the industry have found themselves grappling with poor financial performances and outcomes over the last couple of years, Zara’s net income and sales have remained on a growing trend at an annual rate of more than 20% (Smith, 2017).
Zara’s successful Supply Chain Strategy
Zara has, for a long time, enjoyed the successes and benefits associated with its supply chain strategy. The strategy embraced by Zara entails some considerations such as the distribution of products to stores within the shortest duration possible upon appearing. In its supply chain strategy, this company has managed to adopt a technique that allows sales teams and store managers to engage in a continuous process of monitoring the customer preferences and trends in the market. Upon the relevant information, the sales teams and store managers report it to the company's designers who then adjust their supplies accordingly. Zara's success in its strategies towards supply chain management is also attributable to its main operational theme which represents agility in several aspects. In this way, this company's manufacturing processes, product development, and processes of a supply chain are usually implemented concerning dexterity upon being expressly designed and formulated (Greeff & Ghoshal, 2004).
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From the perspective of a supply process, Zara's operations concerning fast fashion find a substantive level of impetuous in its in-house design and manufacturing. In this respect, the team and members of staff charged with the responsibility of overseeing design and production processes are made to operate with a wide range of pre-selected materials and fabrics. Moreover, the processes involved in the in the identification, selection, and management of suppliers are usually streamlined in such a manner that gives Zara a considerable edge over its competitors. The management of Zara concerning the determination of the needs and systems of the information it acquires from various sources largely also works to strengthen its supply chain networks and structures (Smith, 2017).
Importance of Zara's fast response and Information Infrastructure
The ability of Zara to establish and maintain a rapid system of response and effective information infrastructure has played a critical role towards ensuring that it remains among the top companies in its industry. Furthermore, the supply chain strategies that Zara has been using are mostly dependent on the effectiveness and the overall success of its entire information infrastructure and rapid response systems. Additionally, the efficiency of the information infrastructure developed by Zara is a critical component towards enabling it to close the communication loop (Ferdows, Lewis & Machuca, 2004).
The organization of Zara's supply chain is in such a manner that it is capable of transferring both anecdotal information and hard data rapidly with significant ease. This nature of rapid response embraced by Zara plays a crucial role when it comes to the transfer and distribution of information across different shoppers, designers and even teams of the production staff. The other importance associated with the information infrastructure used by Zara to streamline its supply chain is its role in tracking products and materials in real-time along every stage of the chain including the inventories on display available at different stores. To this extent, the objective of the system of information run by this company is to ensure a close of the information loop existing between the end users on one side and operations of design, production, procurement, and distribution on the other side without much delay (Bhatnagar, 2009).
Zara’s Customer-centric replenishment Strategy
The unique replenishment strategy adopted by Zara ensures that customers are satisfied in different ways. Further, the organization structure adopted by Zara focuses it formulation and operations based on a predictable rhythm that prioritizes the satisfaction of its customers. In this way, the company integrates its unique customer replenishment strategy into its supply chain as well as a flow of information across its various departments and branches. Zara's management is always in control of a myriad of designs that are normally subjected to warehouse deliveries (Drake, 2011). The profits and capital are utilized in such a manner priority are given to projects and initiatives with the objective of developing the company's customer-centric replenishment strategy. Zara has been able to make significant investments near manufacturers thereby enriching its flexibility in fulfilling its objective of establishing designs that are customer driven. In this regard, the company is also keen on incorporating fashion trends and customer preferences in its design creation and product development processes. With the proximity Zara's producers utilized in time-sensitive and high-fashion clothing situated around Europe, they are capable to making rapid deliveries to Zara's central distribution center located in Spain before being shipped to different other stores focusing on customers (Ferdows, Lewis & Machuca, 2004).
Conclusion
In summing up, it is clear that Zara as a company has been operating based on a successful supply chain strategy. The company has also managed to establish and sustain a fast response and information infrastructure that is important in many ways including distribution of information across different shoppers, designers and even teams of the production staff. This company has also been to streamline its supply chain infrastructure to allow it to track products and materials in real-time along every stage of the chain including the inventories on display available within different stores. Finally, Zara has a unique replenishment strategy satisfies customers based on customer-centric replenishment focus and guidelines.
References
Bhatnagar, A. (2009). Textbook of supply chain management. Lucknow, India: Word-Press.
Drake, M. (2011). Global supply chain management. New York, NY: Business Expert Press.
Ferdows, K., Lewis, M. A., & Machuca, J. A. D. (2004). Rapid-fire fulfillment. Harvard
Business Review , 82(11), 104–110.
Greeff, G., & Ghoshal, R. (2004). Practical e-manufacturing and supply chain management.
Oxford, England: Newnes.
Smith, K. (2005). How Zara fashions its supply chain. Strategic Direction , 21 (10), 28-31.
doi: 10.1108/02580540510626709
