Untitled Quiz

Zara Overview

• Spanish fast fashion brand with over 2000 global stores
• Products move from concept to store shelves in 4 weeks (faster than industry average)

Strategic Operations

• Product Differentiation: High product turnover (twice per week) to keep up with trends and attract repeat customers
• Vertically Integrated Supply Chain: Owns their supply chain for quick responses to trends, reducing reliance on external partners

Scale of Production

• Produces goods in multiple countries, but sells globally
• Localized Manufacturing: Reduces transportation costs and improves flexibility

Technology

• Advanced IT systems track customer data for quick design and product adjustments
• Uses CAD, CAM, and robotics to enhance efficiency, lower costs and speed up production

Inventory Management

• Uses a Just-In-Time (JIT) system to match designs with available stock, reducing delays and waste
• Limits inventory to encourage immediate purchases

Sustainability Goals

• Aims to reduce carbon emissions by 50% and water use by 25%
• Uses sustainable raw materials (organic and recycled fabrics)
• Powers factories with renewable energy
• Launched a pre-owned Zara program for repairs, resale, and donations

Key Strengths (Zara)

• Design Speed: 15 days from concept to store, adapting designs during the season using sales data
• Delivery Speed: Global deliveries within 48 hours; twice-weekly restocking
• Customer Engagement: Encourages urgency through limited stock, resulting in 17 visits per customer annually (compared to 4 for competitors)

Outsourcing (Zara)

• Manufactures 60-80% of products in-house to prioritize speed and flexibility
• Outsources only long-lead items like socks and basic shirts

Supply Chain Management (Zara)

• Uses sustainable materials (organic cotton) in collaboration with organizations like OCA
• Limits outsourcing to maintain speed and flexibility

Challenges and Trade-offs (Zara)

• Higher production costs compared to competitors
• Requires sophisticated supply chain and operations management
• Doesn't bring back items to stores

Zara Customer Behaviour

• Customers visit stores an average of 17 times per year, compared to the industry average of 4.
• Store managers place orders twice per week, receiving items 2-3 days later.
• Zara's business model creates variation in demand.

Zara and Technology

• Zara leverages technology for both product manufacturing and supply chain communication.