Zara’s industry
First, use the Integrated Supply Chain Framework to map Zara’s key processes. Identify and show the company’s processes in the Supply Network, Integrated Enterprise and Market Distribution Network blocks of the framework.
Next, answer the following questions based information from the case you read:
Supply Chain Strategy
* What is meant by “marriage between manufacturing and retailing” in this case?
* How is Zara’s supply chain strategy aligned with its overall business strategy?
* How does technology fit in with Zara’s supply chain processes?
* What is the value of Zara setting up most of its factories as independent profit centers?
* How does Zara’s supply base in Asia and elsewhere fit with its supply chain strategy?
* How does Zara’s make or buy decision processes and criteria contribute to profitability and competitiveness?
Supply Chain Performance
* What is meant by “negative working capital”? How does Zara achieve this?
* What metrics does Zara use and that are considered critical or most important?
* What processes or activities are key to Zara’s industry-leading inventory management performance?
* Why is speed critical to Zara’s business model and, therefore, to Zara’s supply chain? Why is accuracy and shrinkage so important to Zara?
The Future
* Do you agree with Zara’s assessment that the “Internet would not have a radical impact on their retail operations”? What is your reasoning?
* “I’ve seen clean models, H&M, Zara, Uniqlo … they know how to do volume and fashion and do it with their own brands,” Mr Russo (Wesfarmers CEO) said. “The only thing they are not doing right is they are over-priced. If I can clean my model up they will regret making the trip Down Under.” Given what you know of Zara from this case, why is this statement surprising?
* What do you see as the limitations of Zara’s supply chain model? What is your reasoning?
* How do you think Zara will need to improve or change to maintain its competitive advantages?
