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    The Speeding Bullet

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    Rainna Yang
    Zara has created a highly successful business model by streamlining their apparel supply chain to get new fashion designs from concept to stores in just 8-10 weeks, far faster than competitors. They utilize frequent small shipments, in-store customer and sales feedback, fabric-driven design, minimal pre-season production commitments, and vertically integrated manufacturing to drive rapid design-production-distribution cycles. Zara's culture of quick decision making, effective IT systems, and close vendor relationships also support their speedy and flexible supply chain operations.

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    The Speeding Bullet

    Uploaded by

    Rainna Yang
    107 views4 pages
    Zara has created a highly successful business model by streamlining their apparel supply chain to get new fashion designs from concept to stores in just 8-10 weeks, far faster than competitors. They utilize frequent small shipments, in-store customer and sales feedback, fabric-driven design, minimal pre-season production commitments, and vertically integrated manufacturing to drive rapid design-production-distribution cycles. Zara's culture of quick decision making, effective IT systems, and close vendor relationships also support their speedy and flexible supply chain operations.

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    Zara has created a highly successful business model by streamlining their apparel supply chain to get new fashion designs from concept to stores in just 8-10 weeks, far faster than competitors. They utilize frequent small shipments, in-store customer and sales feedback, fabric-driven design, minimal pre-season production commitments, and vertically integrated manufacturing to drive rapid design-production-distribution cycles. Zara's culture of quick decision making, effective IT systems, and close vendor relationships also support their speedy and flexible supply chain operations.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    107 views4 pages

    The Speeding Bullet

    Uploaded by

    Rainna Yang
    Zara has created a highly successful business model by streamlining their apparel supply chain to get new fashion designs from concept to stores in just 8-10 weeks, far faster than competitors. They utilize frequent small shipments, in-store customer and sales feedback, fabric-driven design, minimal pre-season production commitments, and vertically integrated manufacturing to drive rapid design-production-distribution cycles. Zara's culture of quick decision making, effective IT systems, and close vendor relationships also support their speedy and flexible supply chain operations.

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    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    The key takeaways are that Zara has streamlined its supply chain to get new fashion items to market in 8-10 weeks compared to 20-30 weeks for competitors. Zara also relies on frequent, small shipments and word-of-mouth feedback from store managers to understand customer demand.

    Zara utilizes its retail stores as the 'eyes and ears' of the company. Store managers report directly to headquarters about what customers are saying and hot/unpopular items. Stores also choose prime locations for high visibility.

    Unlike traditional models, Zara commits to less production in advance, is fabric-driven in its design process, houses key functions on one floor, and encourages quick decision making with few reviews/samples. It also vertically integrates some processes like dyeing.

    The Speeding Bullet: Zaras Apparel Supply Chain

    By Kim Anderson, Ph.D., writer [TC] and Jim Lovejoy, Director of Industry Programs, [TC] March 2007

    Todays consumer is more finicky than ever. They can now pick and choose from a wide array of inexpensive products. To compound the problem, consumers today are spending less on apparelchoosing to spend their disposable income on healthcare, electronics, education, and travel and leisure. To capture todays elusive consumer, it is more important than ever to get the right product to the market in breakneck pace. The Zara business model, a successful paradigm studied by industry professionals, who are now sharing some enlightening conclusions that might help with this daunting task. Zara is the most profitable arm of the retail conglomerate, Inditex. Amancio Ortea Gaona, the companys founder, began trading garments in 1963. By 2005 Inditex emerged as one of the worlds fastest growing makers of affordable fashion clothing. Now with over 2000 stores and promising to double that number by 2011, Inditex is one of the biggest business success stories in Spanish history. No doubt, Zara has a very successful business model, but ironically, nothing is revolutionary. Through a clear focus and vision they have streamlined the cumbersome old supply chain response from 20-30 weeks down to 8-10 weeks and their customers are eagerly awaiting next weekstake note, not next seasons new fashion.

    Zara has tapped into the power of fashion. Small and frequent shipments keep product inventories fresh and scarcecompelling customers to frequent the store in search of whats new and to buy nowbecause it will be gone tomorrow. Under the Zara model, the retail store is the eyes and ears of the company. Instead of relying solely on electronically collected data, Zara utilizes word-of-mouth information to understand more about their customers. Empowered store managers report to headquarters what real customers are saying. Products that are not selling well are quickly pulled and hot items quickly replenished. Their quick turn around on merchandise helps generate cash which eliminates the need for significant debt. Zara doesnt invest in traditional advertising. Prime locations in regal buildings are chosen for splendid visibility. The stores ambience is consistent and appealing from the interior design, artwork, window displays, lighting and music. Controlling notorious trouble spots along the supply chain is key to speed. Potential bottlenecks can be thwarted because Zara is a vertically integrated structure. Dyeing and fit are critical processes within the supply chain. Zara is a large investor in a dye and finishing plant, allowing them to oversee the dyeing processa notorious bottleneck. Although Zara uses sub-contractors for sewing, they do the vast majority of cutting themselvesa crucial process that determines fit. For quick turn around, 60% of the manufacturing processes are outsourced in countries close to the Zara headquarters in Spain. Zara maintains a strong relationship with their contractors and suppliersviewing them as part of the company. To successfully react to consumers demands, design decisions are delayed as long as possible. Typically, Zara commits to 50%-60% of their production in advance of the season, whereas other apparel retailers commit to 80%-90%. Zara practices

    precommitment, meaning they reserve mill capacities to ensure production facilities are available when needed. Design collections are not developed by small elite groups of designers but by creative teams. Teams consist of designers, sourcing specialists and product development personnel. The teams work simultaneously on different products, expanding on styles that were previously successful. Designers are trained to limit the number of reviews and changes, speeding up the development process and minimizing the number of samples to be made. Traditionally, design and development precedes fabric procurement. Zara has turned this practice up side downZara is fabric driven. Designs are developed with available fabrics and trims. This eliminates waiting for the long and laborious process of fabric formation. Poor communication is often the culprit of bottlenecks. Zara invested in information technology (IT) early on. Their in-house IT is simple and effective. Vendors and suppliers report that people are accessible and answers can be obtained quickly. Internal communication is maximized by housing on one floor, the designers, pattern makers and merchandisers, as well as everyone else involved in getting the product completed. Zara hires young designers and trains them to make quick decisions. Decision-making is encouraged and bad decisions are not severely punished. Designers are trained to limit the number of reviews and changes, speeding up the development process and minimizing the number of samples made. Some say Zaras real strength is its well developed culture, and that isnt something that can be easily knocked off.

    Not everyone can be a Zara, nor does everyone want to be. But in todays competitive environment, fine tuning the supply chain is no longer a strategic tool, but a necessity. The stages of the supply chain will not change, but to obtain quicker speeds the sequence and focus has to. The information on Zara was collected from the Fast Fashion workshops conducted by Ken Watson, Director of the London-based Industry Forum and produced by the Industry Forum and [TC]. For information about future workshops contact Jim Lovejoy at [TC] or visit www.tc2.com.
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