Zara is a good example of a retail organization, which need to purchase
materials. For this, they need to create a good supply chain model. They
purchase raw materials mostly from Spain, Greece, and Italy. Therefore,
they can purchase better quality raw materials at the earliest. Inditex is the
biggest branch of this retailing organization.
The retailing organization Zara has suppliers from about 50 countries.
Some are nothing but handling plants. A wide variety of assortments of
things is enabled for customers in this way. Most of their creations are
enabled by the suppliers around Spain. They are bound to comply with
Zara’s implicit rules for its obligations to customers.
Zara is called “Fast fashion” in a segment of the market. To make ready to
wear emphasizes transition between couture and catwalk fashion.
Therefore, the strategic focus becomes speed and price. The faster they
move, they will get the fast move advantage and the cheaper they can do it
their profit margin would be greater.
Trinity of fashion:
The designers, textile manufacturers, and laborers are all in one location,
not a more than 20 minutes distance. For this, they need the urgent amount of
infrastructural investment and a solid management. They implement the
“Just-in-time” formula this way.
Following things in Zara’s ICT try to seamlessly coordinate between
organizations and enhance supply chain integration. They are inter-organization
ICT and supply chain performance.refers to the data technology and linking
and matching organization. IOICT is greatly emphasized in the current supply chain
literature. It is important also to understand the relationship selective
information and executive system. It also enhances inter-organization
practices between buyers and vendors.
Purchasing cost analysis:
Zara’s technology improves operational responsiveness to customer, at the
same time reduces cost. Zara’s main strategy is to answer quickly to
consumer demand and anticipate consumer trends through IT and human
resources. Its supply chain relies on backward integration and controlling
manufacturing and distribution on the basis of consumer response. It’s
simple and effective IT and high tech DC helps in this purpose. It optimizes
cost in terms of basic production items and also optimizes time. Zara
continues to update information based on checking with store managers using
PDA and updating customers response. Store computers give them Point of
sale information also DC mobile tracking area and barcode garment keep
systems. After orders were approved warehouses issued lists of delivery to
the stores. Designers bridges merchandisers and back-end production to
develop right products within its season to meet consumer demand. The DC
is not only a store, but also a place of merchandise.
Zara’s operational systems, suppliers, and ICT, all are jointly responsible
for the most successful retailing organization. Most fashion houses
maintain their Design and manufacturing facilities at completely different
places. As for example, GAP has stores in the USA, but their manufacturing
facilities are mainly in Indonesia, Vietnam, China etc. They have to give
slow shipping and sailing time also.
1 . http://blog.scmglobe.com/
2. https://www.inditex.com/sustainability/environment/logistics 3. https://www.forbes.com/sites/kevinomarah/2016/03/09/zara-uses-supply-chain-towin-again/#7f1bc5ca1256