28 May 2015

The Spanish Success…Zara’s supply chain secrets

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For the past 4 to 5 years of my Saturday shopping life Zara has, and continues to be my favourite high street store. Entering their stores with gleaming eyes, spending endless hours in the changing rooms and then walking out with heavy bags and an empty purse, Zara’s stress-free shopping experience has a lot more going on behind the scenes than what meets the eye. 

Did you know that Zara is parent company of Inditex, the world’s largest apparel retailer? The Spanish apparel company delivers products twice a week to their 1,670 stores world-wide. Zara blissfully entered our Australian streets back in 2011, with their first store opening in the heart of Sydney.  

So what are the secrets to Zara’s fabulously famous, fast-fashion supply chain? Read the following points below to understand how Zara conducts their ever advancing supply chain…

Unlike other fashion retailers who can take on average 6-9 months to take a product from design to shop floor, Zara takes only 10-15 days! Through forecasting their customer trends, Zara has one of the most responsive and effective supply chains in the industry. Due to this short lead time, the result is more production of stock. Furthermore, with nearly 12,000 designs produced each year, the range of choice throughout their stores results in higher chances of meeting the ever changing customer demands. 

To understand Zara’s supply chain strategies, you must first understand their end to end supply and operation management. It goes something along the following lines of… 

A close watch of trends>Analysing buying behaviour>making quick decisions>inventory control>distribution=SIMPLE?! 

Don’t be fooled at how simple that process may look, it is the finest details Zara have perfected that aid their seamless and strategic supply chain. Inventory management (something EVERY company thrives to improve on) is yet another area of supply chain in which Zara are excelling at controlling and managing. For example, their inventory has 12 turnovers a year versus 3-4 times a year as the average within the industry.

Similar to Toyota Motor company, Zara successful applies the “just in time” inventory control approach. The advantage to this approach for Zara means whilst watching trends and analysing buying behaviour, if an item looks like a sell-out, Zara can in days increase the manufacturing of the item and have it on the shop floors ready for the spenders! 

Another interesting strategy used by Zara it their central distribution centre. With extremely strong IT tools and techniques which support the distribution process. All of Zara’s items are shipped to the central location of Spain and from here are distributed. Distribution goes to different countries and stores based on the demand and supply needs of each location. 

It is without saying, despite any personal preference you may have on Zara’s fashion and clothing, when it comes to supply and demand planning, their defiantly the game changers! With a large scale of apparel, fast-fashion companies doing extremely well, it is Zara who is constantly in the media and staff room discussions for their faultless and proficient supply chain. 

As a tomboy child, Holly enjoyed watching wrestling and was The Rock’s biggest fan. She is from a tiny farming village in the north of England and has moved to Sydney to enjoy the city lifestyle. As a conference producer at Akolade, Holly enjoys researching with and learning from key professionals within a range of sectors to produce timely conferences. Furthermore, Holly enjoys how each day in the life of a conference producer is always different and exciting! 

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