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Zara's Supply Chain Strategy

  1.  Produce in small lot: small lot is the unique characteristics of lean manufacturing which is not the case here. The logic behind this is that small lot creates the sense of exclusivity. Customer need to make a quick decision otherwise the next day the products they want will be gone. So customer visits Zara’s stores to see new products more often and this creates the huge amount of traffic and revenue.
  2. Centralize design and product development: the norm in the apparel (and some other) industries is to develop new products by both in-house staffs and through merchandisers. In the latter case, suppliers need to send samples (through merchandisers) to buyers many many times. Elimination of this back-and-forth communication reduces the time to market drastically.
  3. Utilize work cell organization: each new product development team has its own designers, sales, procurement and production planners the same way as in a cellular manufacturing. This help Zara to streamline the internal communication a lot.
  4. Control scheduling strictly: at Zara, store managers can place order 2 times a week, shipments are prepared and delivered within 24 hours (in Europe) and products will be on displayed at stores the same day they arrived. Since everything runs in a stead pace, they can reduce a waiting time at every step of the way.
  5. Keep production in-house: Zara tries to stay away from low-cost country sourcing and make an investment in the in-house manufacturing as much as possible. The reason is that they believe the in-house production help them to increase the overall flexibility.
  6. Automate production and warehouse facilities: since Zara believes in time based competition, automation is the key to help them to increase the speed and the accuracy of the operations.
  7. Adhere to all rules: implementing any one of these rules alone is not quite effective. Then, they have to stick to all rules so the whole supply chain is running like the well-oiled machine.

Source: SupplyChainOpz

 https://www.supplychain247.com/article/zaras_fashion_retail_supply_chain_strategies


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