Supply Chain Management: A Zara Case Study By Native Expert.
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The concept of supply chain management can be defined as the administration of the flow of merchandise and administration, as well as the entire set of techniques that change the crude material into end items. SCM also comprises the active rationalisation of business delivery-side works to increase client worth as well as attain a competitive advantage in the market. Thus, it can be clear from the discussion that the context of the study is related to a supply chain improvement proposal wherein a company will be used to assess and evaluate various theories related to supply chain operation for identifying the degree of performance of the company. This will usually consist of measuring the supply chain performance that will be pertinent to the company. Based on identifying the performance, a proper recommendation will be provided for improving the supply chain functions of the selected company. Last but not least, the study will also suggest in what manner the value ought to be created within the supply chain function of the selected company to make sure that it gains the anticipation of its clients. The company that has been selected to conduct the study is Zara.
ZARA is a Spanish global retail apparel chain. It has some expertise in quick style and sells clothing, extras, shoes, magnificence items, and perfumes. The administrative centre is in Arteixo, in A Coruña, in Galicia. It is the biggest constituent organisation of the Inditex Group. In 2020, it was sending off more than twenty new product offerings each year. Zara stores have people's clothing as well as youngsters' clothing (Zara Children). Zara Home plans are situated in European stores. Most of Zara's clients are between the ages of 18 and 35. After items are planned, they require 10 to 15 days to come to the stores. The attire is all handled through the conveyance community in Spain. New things are reviewed, arranged, labelled, and stacked into trucks. Generally speaking, the attire is conveyed in 48 hours or less. Zara produces nearly 450 million things each year. Zara additionally incorporates embellishments, shoes, swimwear, excellence, and aromas. Considering the supply chain of Zara adheres to a profound, unsurprising, and quick cadence, based on fast conveyances to stores,. Each Zara outlet sends in two orders each week on unambiguous days. Trucks depart at explicit times, and shipments show up in stores at explicit times.
The evolution of Zara during its career has been remarkable, the firm established itself as a luxury fashion brand, however with the advent of the neo-luxury feature within the fashion industry, Zara admitted that it was being tougher to sell and gain profits through value. The transformation of Zara to a fast fashion brand has proven itself to be enormously successful for the career portfolio of the brand. There is a wide aspect of reasons that make Zara a striking contender in the market. The firm's low-key public appearance, little investment in marketing as well as public relations, and so on are just some parts of it. Zara has always aimed for a non-conventional form of intervention in the market leading to the awestruck of its competitors(Aftab et al., 2018). The supply chain of Zara is supposed to be one of the strongest points of its portfolio. Marketers argue the agile supply management system of Zara is one of the primary reasons behind its astonishing success. This method has helped the brand maintain its quality as well as perform sustainable growth every year. This section will aim at pointing out the key features of the supply chain Zara and focus on its evaluation through a range of models.
Three primary approaches have been analysed for the evaluation of the supply chain of the firm: quality, speed, and supplier performance.
The approaches that have been portrayed above can be explained through stakeholder analysis. The stakeholder analysis will illuminate the potential issues that are associated with the firm(Theories of supply chain management 2022). The stakeholder analysis consists of Mendelow’s Matrix that identifies the present and potential stakeholders of the firm:
Keep Satisfied |
Engage Closely |
Monitor |
Keep Informed |
The previous section saw the supply chain approach of Zara and the evaluation of the same using stakeholder analysis. This section will focus on the clear identification of the issues that are associated with Zara's supply chain. This section will further extend itself to provide recommendations for the identified problems that can be treated as potential solutions of the same. Furthermore, the report will also contain an analysis of the measures that are required for the implementation of the proposed solution and the impact that the solution will have on the firm and how will it help the firm move towards betterment.
Issues
Issue |
Recommendation |
Measures |
Impact |
Quality control |
About 85 percent of the plants are left for spare. The increase in activity through the increased number of laborers in the firm will enhance the quality of the products. The quality is mostly compromised because of the lesser amount of time that is given to laborers in manufacturing the finished products. If the capacity of the firm is increased by some percentage through the usage of more plants and more laborers. Then the quality of the items has severe chances of improvement. |
The measures that will be required to implement this are: · Increased number of laborers the firm has. · The increase in the number of manufacturing plants that are used in the manufacturing process of the firm. |
The increase in quality of the items manufactured by Zara will automatically help in the spread of the word regarding the same. The enhanced prices of the firm will somewhat be justified due to the optimum quality of the same. This will help the firm gain brand loyalty from customers and will help in the generation of a new customer base and retainment of the existing ones as well. |
Supplier management |
The constantly mobile supplier network of the firm that continuously incorporates new suppliers to decrease dependency is the major issue in this case. Zara needs to categorize their suppliers very carefully so that optimum support can be attained from each of the suppliers without creating much burden on anyone. Furthermore, careful analysis and strategic categorization of the suppliers will also help them to provide better materials for the firm. |
The measure will require; · A proper analytical survey of the present suppliers of the firm and their pros and cons. · A strategic categorization of each one of them so that none of them face grounding pressures but still have opportunities of being associated with the firm and provide optimum results. |
This will enhance the supplier relationship of the firm, furthermore, it will also impact the quality of the raw materials provided which will directly influence the quality of the end product. |
Ill-treatment of laborers |
This is a more ethical issue but is deeply intertwined with that of an able-functioning supply chain management of the firm. The ill-treatment of the laborers makes them hostile toward the firm which directly impacts their productivity. This can be managed by treating the laborers better through the introduction of clear codes of conduct. The firm can also allow the laborers to form a union so that their woes and issues can be directly conveyed to the firm. |
· Laying down a proper, formal, and documented code of conduct. · Allowing the formation of a labor union. |
This measure will help the laborers be more attentive towards the working of the firm which automatically will lead to better results for the supply chain management. It will also improve the CSR of the firm. |
Tainted public image |
The firm needs to develop an efficient PR team and take customer relations more seriously. the firm also requires an able and efficient marketing team that will help them to deal with such hostile market situations. |
· Development of better customer management strategies. · Formation of an able PR team. · Development of efficient marketing strategies. |
The measures will help the firm understand the reasons for its tainted image in the public eye. Post the understanding of this the teams proposed for formation and development will aim to rectify this image through promotional campaigns so that this notion can be eradicated (Chen 2022). |
General merchandise achievement is contingent on customer loyalty, so it stands to reason that supplier accomplishment is already dependent on satisfied clients. The strength of any distribution network is determined by its weakest point. In quick time, a corporation can transport goods from China to the United States, evident everything through Formalities, transport it to a distribution warehouse, and achieve it (Aftab, and et.al., 2018). However, if the commodity is not delivered to buyers rapidly enough, they are dissatisfied, and the business's supply chain has struggled." Some of the recommendations to Zara for buyer-supplier tactics that will help generate sales by keeping their clients in mind were also discussed below. This recommendation will be helpful for the business to satisfy the customers.
For many years, the moment between placing an order internet site and having received a transfer was a mystery to customers. Providing accessibility in and out-of-order information has become almost expected (Song, 2021). Order trackers combined with the WMS can increase Zara’s distribution network transparency, satisfy customers, and provide companies with important data. Clients will not only record their customer purchases, but it also gives details about when products were indeed obtained and when they have been transported (Avittathur, and Ghosh, 2020).
Using an inventory management system is also a great way to ensure Zara's stock levels management is as good as or better than average. Zara keeps track of its own sales volumes, instructions, deliveries, and other details using inventory management systems. It would also be more difficult to quantify most of these item’s side by side and recall critical details from memory without the assistance of a virtual system that stores it all (Roederer, and Mayrhofer, 2021). The inventory operating system handles the majority of the work for you, allowing you to focus on growing your business and satisfying your customers.
In addition to this, retailers are always struggling to analyse an appropriate balance between the excess inventories along with the out-of-stock situation. Agility can be termed as the process of allowing the partner of the supply chain to work together in order to produce the handsome amount which is highly required in the process of business which can be quarterly, monthly or it can be yearly. It gives the ability to do business and enhances the chances of promoting business in a positive manner (Ramia Munerati, 2018).
Conclusion
So, it can be concluded from the above done study that managing the supply chain is considered to be as one of the toughest and if it fails in any part that impacts the company in a great manner. From the above study it has been evaluated that being of the toughest contenders among other fast fashion brands Zara still faces a lot of issues in managing their supply chain. With the help of using theory the various heights of performance regarding any measure of supply chain performance have been identified from which it has been seen that there are various loopholes present in the supply chain operation of Zara which they need to considered while making the supply to different location. This has not only impacted the brand image of Zara but also effects the client satisfaction too. So, in order to deal with the issues and improvement in supply chain of Zara few of the important recommendations has been provided that will help Zara in coping up with the issues identified in the study.
References
Aftab, M.A., Yuanjian, Q., Kabir, N. and Barua, Z., 2018. Super responsive supply chain: The case of Spanish fast fashion retailer Inditex-Zara. International Journal of Business and Management, 13(5), p.212.
Alonso-Cañadas, J., Galán-Valdivieso, F., Saraite-Sariene, L. and Gálvez-Rodríguez, M.D.M., 2018. Using social media to enhance stakeholder engagement in the fashion industry: the case of Inditex. Cuadernos de Administración (Universidad del Valle), 34(61), pp.3-16.
Avittathur, B. and Ghosh, D., 2020. Supply chain management as a competitive advantage. InExcellence in Supply Chain Management(pp. 35-44). Routledge.
Berbiche, N., Hlyal, M. and El Alami, J., 2020, April. Exponential success through integrated supply chain optimization, ecomotional intelligence and reputation-based leadership: Zara model. InIOP Conference Series: Materials Science and Engineering(Vol. 827, No. 1, p. 012058). IOP Publishing.
Chen, Y., 2022. How ZARA Should Improve Guest Satisfaction After the Xinjiang Cotton Incident. Frontiers in Business, Economics and Management, 3(3), pp.137-143.
Gpa@ivalua.com (2021) Zara's Supply Chain Management Model, Ivalua. Available at: https://www.ivalua.com/blog/supply-chain-management-zara/ (Accessed: November 18, 2022).
López, T., Riedler, T., Köhnen, H. and Fütterer, M., 2022. Digital value chain restructuring and labour process transformations in the fast?fashion sector: Evidence from the value chains of Zara & H&M. Global Networks, 22(4), pp.684-700.
Özlen, M.K. and Handukic, I., 2013. Fashion industry supply chain issues: Zara (Azel France). European Researcher, (4-3), pp.999-1008.
Pornsing, C., Sangkhiew, N., Chirachetsadang, N., Tanti-arporn, N., Tonglim, T. and Inthawongse, C., 2022. Fast Fashion Strategies in Logistics and Supply Chain Management.Journal of Logistics and Supply Chain College,8(2), pp.126-139.
Roederer, C. and Mayrhofer, U., 2021.Zara: Managing the global supply chain successfully(No. halshs-03083454).
Ramia Munerati, L., 2018. The Zara case in Brazil: juridical effectiveness of soft law measures concerning decent work in global supply chains.Available at SSRN 3411472.
Seo, K. and Suh, S., 2019. A study on the characteristics and social values of vegan fashion in H&M and Zara.Journal of Fashion Bu
Song, X., 2021. Research on Cost Control of Enterprise Supply Chain——Taking ZARA as an Example.
Singh, M.S., 2020. A STUDY ON SUPPLY CHAIN AND SOCIAL MEDIA PLATFORMS WITH SPECIAL REFERENCE TO THE CLOTHING BRAND ZARA.Towards Excellence,12(5).
Theories of supply chain management - welcome to ICMAB (no date). Available at: https://www.icmab.org.bd/wp-content/uploads/2019/12/04.Theories-of-Supply.pdf (Accessed: November 18, 2022).
Xuejie, C., Chang, Q. and GuangHao, Z., 2019, August. Research on Innovation supply chain Management in Fast Fashion Industry——A comparative analysis of ZARA and H&M. In2019 3rd International Conference on Education, Culture and Social Development (ICECSD 2019)(pp. 7-16). Atlantis Press.
Yide, S., Value Creation Strategy Analysis of ZARA since Internationalization. Academic Journal of Business & Management, 3(11), pp.13-19.
Zhelyazkov, G., 2011. Agile Supply Chain: Zara's case study analysis. Design, manufacture & engineering management. Strathclyde University Glasgow, Velika Britanija, pp.2-11.
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