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 ICT of this organization is helpful.
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.