The Agile Supply Chain: Competing in Volatile Markets. The design and distribution cycle of the company takes just 10-15days in the whole process. Excellent management team and operations; Where can I find Zara case study answers? Store managers to market specialists to production and design teams; this information passing loop is quick and agile that helps in delivering responses of the market at a faster rate. Case Study: Operations management at Zara. Study Analysis- Zara ABSTRACT This paper is based on case study on operation management and positioning strategy of Zara, one of the world’s fastest growing manufacturers of fashion clothing. While it takes a cycle of six months for other fashion brands to penetrate new designs into the … The cross-functional teams can examine prototypes in the hall, choose a design, and commit resources for its production and introduction in a few hours, if necessary. … Many companies are successful in the market, for instance, Zara, IKEA, Dell, and Zipcare among many. 232-234). Case Study Analysis- Zara ABSTRACT This paper is based on case study on operation management and positioning strategy of Zara, one of the world’s fastest growing manufacturers of fashion clothing. Using theoretical concepts from The approach to analysis includes looking, logistics management of fashion related Retailer Company named Zara which is expected to boost the value of customers and sustainability concept is considered to be added benefit to the Zara Company. Inditex’s operations use a vertical supply chain which is considered a very different and unique strategy in the fashion industry. Abstract 3 With a large name in the fashion industry, besides that, Zara faces tough competition internationally, ZARA’S OPERATIONS STATEGY, A CRITIQUE OF A BUSINESS CASE. Putting an incredible pressure on price, as often is the critical competitive variable. - Introduction 4 (2009, June 04). Slack, N., & Lewis, M. (2008). It should not be too complicated for the employees to operate. The presentations for … Enjoy the videos and music you love, upload original content, and share it all with friends, family, and the world on YouTube. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. Procurement and production planners make preliminary, but crucial, estimates of manufacturing costs and available capacity. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. The associated differences market their differences in the level of being successful in the market. A. 1.Excecutive summary. This case paper presents the business analysis of Zara, the leading and the profitable brand of Inditex. As described in a case study of Zaras supply chain, the company is vertically integrated, controlling most of the processes in its supply chain. ZARA gaining competitive advantage using SCM 10 Zara Operations Management Assignment On Decision Making Models. ZARA: Fashion Follower, Industry Leader. In order to survive in today’s challenging business world, every organization has to be confronted with highly competitive pressure to bring out more effectiveness and efficiency when running a business. Appendix 1: Mintzberg’s Concept of Emergent Strategy, Appendix 3: Zara’s Capacity utilization (Ferdows, Lewis, & Machuca, 2005), 123helpme.com. As part of its vertical integration, Zara maintains a very high control of its supply networks as a strategy in achieving fast response. These computers process data on orders, sales trends and consumer reactions to products in stores. Figure 2: Improvement, Design, Planning and Control. FT/Prentice Hall. Nowadays buyers want to see a new trends quickly. If you need assistance with writing your essay, our professional essay writing service is here to help! Inventory costs are higher for competitors because orders are placed for a whole season well in advance and then held in distribution facilities until periodic shipment to stores. Dik, R. W., & Lewinski, H. V. (2002, July). In that case, Zara have to manage 3 criteria : 1)decreasing inventory 2) increasing resource that we used 3) time … The business related strategies and management of supply, systems relate to the way Zara runs its business. Operations management is in regard to all operations within the organization responsible for creating goods and services that organizations pass to their customers. This function is at the heart of all organizations, giving the means of achieving their aims and reason for their existence. B. Johnson, Operations and Process Management (pp. Information Technology has helped Zara to minimize production volatility that may arise from the bull-whip effect, hence bringing about a highly positive correlation in the demand and supply of products. Executive Summary View Zara Case Study - Operations Management.docx from MBA BSAD at Valley View University. It shows that operation management is one of major activities for Zara to support its fast fashion system. In contrast to Zara, Express, a US traditional retailer owned by Limited Brands outsources all of its production while focusing on distributing and retailing those goods. The advantage is mainly because of Zara company’s designing models that are related with business and they are compared with benefits and disadvantages with other companies which have seen success and also highlight on companies that are not successful. No plagiarism, guaranteed! The case “Zara: IT for fast fashion” which from Harvard Business Review analyzed ore details about the basic model of Zara business, the operation process, and IT development. Professor Moses Niwe Also, it will be shown how the ideas of operations management are put into action at ZARA. Though there is a cost advantage in their approach in regards to labour, the lack of flexibility in changing orders based on current trends hinders their operational efficiencies. : http://www.123helpme.com/view.asp?id=97642. In today’s highly competitive and global marketplace, the pressure on organizations to find new ways to create and deliver value to the customers grows even stronger. Zara Case Operation Management Harvard Case Study Solution and Analysis of Harvard Business Case Studies Solutions – Assignment HelpIn most courses studied at Harvard Business schools, students are provided with a case study. They are the third largest brand in the garment industry and are a unit of Inditex. A greatdeal of focus is on efficiency and effectiveness of such … 29-93). Speed and responsiveness to Market, Zara has changed the way clothing industry works where deigning, production and delivery to the retailers requires period of six months. In Search of the Bullwhip Effect. It provides the basic information of these organizations and how the operation strategy Zara is the clothing retailer the best known as a brand of Spanish holding group Inditex (Industrias de Diseno Textil). - Zara information system, activities, handles the market and how it values or focuses on having a good future. On the average, 50% of its products are manufactured in Spain, 26% in the rest of Europe and 24% in Asian countries. The process of obtaining market information and relaying it to design and production teams expedites product development by shortening the throughput time of their products from design to store. Looking for a flexible role? In particular, we will focus on supply chain management the relation, 1. Zara - case study -- 1. Retrieved August 15, 2010, from Global research and Insights: http://www.accenture.com/Global/Research_and_Insights/Outlook/By_Alphabet/WhyMore.htm. This typically can be said to be an emergent strategy as the Zara store today was not an intended strategy. Founded in 24 May ,1975 by Amancio Ortega and Rosalía Mera. As a result, the company is able to adjust its resources to match the demands as appropriate. Comments (0) Add to wishlist Delete from wishlist. A case study on Zara’s Operation Management Strategy 1 Mohammed Mansur Rashid MBA Term –V (weekend batch) ZERO TO... 2. Case Study Analysis- Zara ABSTRACT This paper is based on case study on operation management and positioning strategy of Zara, one of the world’s fastest growing manufacturers of fashion clothing. Do you have a 2:1 degree or higher? Using the framework in fig 3, Zara’s operations along its value chain is analysed as follows: Zara employs a chase demand capacity management [5] in its operations. CMP 570 Enterprise Information Systems Another bottom-up strategy was that its store managers could report directly to the Zara headquarters, the feedback on preferences from their customers. Introduction 3 As described by Inditex CEO, Jose Maria Castellano, “the fashion world is in constant flux and is driven not by supply but by customer demand. Ratchanobon Kamdecha As a fashion imitator, Zara ‘s priority was to focus its attention on understanding the dynamic fashion trends, aligning these changes to meet its customers’ wants rather than on promoting predicted season’s trends via fashion shows and similar channels of influence, which the fashion industry traditionally used. Zara’s Secret for Fast Fashion. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. (2004). From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. Zara is a clothing company that was founded in 1975 and came from Spain. SCM tools and techniques 4 This is a key driver of competitive advantage through constant innovation to develop new-products that provide customers with new perceived benefits. Also a … In 2004, a University of Philadelphia article by Craig et al (Craig, Jones, & Nieto, 2004) identified Zara’s strategy as ‘internalization’ whereby majority of the processes in its operations are handled by the company while outsourcing only labour intensive tasks has set Zara milestones ahead of its competitors in the apparel chain. (Grant, Lambert, Stock, & Ellram, 2006) This aligned Zara operations with its business strategy, ensuring comprehensiveness, correspondence and coherence to achieve its mark in the garment industry as a world leader today. Zara’s strategy qualifies its operations as a ‘Type A’ Product-Process Mix, with high flexibility, low inventory volumes and high variety as in Figure 4 below: As further described by Ferdows et al in their article, Zara’s Secret for Fast Fashion, Zara’s development and organization facilitated an easy flow of information from customers to store managers, from store managers to market specialists and designers, from designers to production staff, from buyers to subcontractors, from warehouse managers to distributors, and so on. Retrieved April 05, 2010, from Zara’s Business Model, Information and Communication Technologies, and Competitive Analysis. Introduction. Supply Chain Vs Supply Chain: The Hype and The Reality. Fundamentals of logistics management. Havard Business School Working Knowledge . Stores have little autonomy in deciding which products to display or put on sale because Headquarters plans accordingly and ships quantities as forecasted. The management of Zara provides a perfect example of successful operations management. Zara owned many of the fabric dying, processing and cutting equipment that provided Zara added control and flexibility to adopt new trends on demand. Zara Case Analysis. [2], As described in a case study of Zara’s supply chain, the company is vertically integrated, controlling most of the processes in its supply chain. This is due to the fact that the global apparel industry is highly labour-intensive” rather than capital-intensive and most competitors seek to cut costs in production as a profit boosting measure than explore other strategies as Zara has done. The first idea came up with Zara business is get the information or request from the customer, and then link with the design center and … It does this as well as, or even more effectively than, it’s internationally acclaimed rivals such as Benetton or Gap, with one of the most effective quick-response systems in its industry.’. Retrieved April 6, 2010, from OPPapers.com: http://www.oppapers.com/essays/Zara-Case-Analysis/200153. 1 (Slack & Lewis, Operations Strategy, 2008, p. 2): Zara boosted its innovation in a fast changing market by adapting the bottom up perspective of strategy in its operations. Another Quality advantage is the added sense of quality to the product as the tags would be labelled with “made in Europe” rather than “made in China” due to Zara’s trade-off between Low labour costs in Asia and operational efficiency. On the average, 50% of its products are manufactured in Spain, 26% in the rest of Europe and 24% in Asian countries. In an article written by John Fernie and Leigh Sparks, (Zara: Time-Based Competition in a Fashion Market, 2004) they described Zara as: ‘A company with rapid growth and ongoing success in a fiercely competitive environment. Copyright © 2003 - 2021 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. This case study is about Zara, large international, Operations management are all those operations concerned of the association related exercises that includes overseeing buys, stock control, quality controller, stockpiling and logistics. Rice, J. This paper uses the models and frameworks of the Operations Strategy module to describe & analyze how Zara’s operations strategy led to a sustainable competitive advantage in the global apparel industry. Figure 3: Summary of business and operation strategies. The management has taken some daring entrepreneurial decisions that lead to the success and wide acceptance of the brand. relate to the way Zara runs its business. Therefore, they can generate useful and accurate information from mangers and designer’s team can design product that meet customers’ demand. Therefore, the strategy of “fast fashion” make Zara successful and their operation management and supply chain are their competitive advantages. The company is a true pioneer in providing exceptional MBA case study writing … Zara did not only depend on the fashion trends in the industry but leveraged word-of-mouth information to create clothing that will appeal to its customers. Grant, D. B., Lambert, D. M., Stock, J. R., & Ellram, L. M. (2006). - History 4 Industrial Marketing Management , 29 (1), 37-44. Spare manufacturing capacity is mirrored in the company’s storage function, where up to 400 extra staff can be drafted in during busty periods. ZARA. On the average, 50% of its products are manufactured in Spain, 26% in the rest of Europe and 24% in Asian countries. Zara’s operational goals to achieve short lead times, lower inventory and increase variety of styles/choice, together with its focus on creativity and quality is a key driver of the sustainable competitive advantage that it enjoys in the industry today. (Dik & Lewinski, 2002), (Ferdows, Lewis, & Machuca, 2005). It supplies products to its 650 retail stores twice per week (Rice & Hoppe, 2001) in strictly limited quantities of stock. This adaptive model rather than traditional merchandising is very different from its competitors. it is effective solution to connect all of Zara’s operations worldwide network and automating processes. Zara case operation management 3739 Words | 15 Pages. - Production 4 1- Executive Summary Operations management is in regard to all operations within the organization related activitiesincluding managing purchases, inventory control, quality control, storage and logistics. No one delivers better case studies to help services in Australia other than MyAssignmenthelp.com. The fashion market is a fast changing one characterized by quick shifts in consumer demands. MANUFACTURING & SERVICE OPERATIONS MANAGEMENT JOURNAL , 9, 457-479. Philadelphia, USA. Compared to their competitors, they outsource very little to Asia [6] . Advanced concepts and Future trends of SCM 6 Zara continues to beat the competitors by introducing new designs into the stores within a week or two. From only a single apparel store in La Coruña, Zara domain has since extended to more, Supply Chain Management (SCM) System Zara … This capability allows Zara to achieve their strategy of expedited response to consumer demand. (Slack & Lewis, Operations Strategy, 2008). Ferdows, K., Lewis, M. A., & Machuca, J. Published: November 4, 2015 Words: 2714 Zara is the largest division and flagship brand of the Spanish retail group Inditex [1] . Due to the supply chain management strategy customers are suggeste… ... Operations Management: Fashion Retailer Zara - Case Study Example. Zara produces most of its products in Europe. A great deal of focus in operations. London & Sterling: Kogan Page. Zara outsources products of high labour intensive processes but maintains in-house capital intensive processes, protecting knowledge and know-how. ‘the phenomenon of increasing demand variability in the supply chain from downstream echelons (retail) to upstream echelons (manufacturing)’. - Distribution and Procurement 5 Seek our Zara operations management case study to look into how our experts add perfection to your work. This case study and supply chain simulation will give you an appreciation of what that job is like. This strategy is embraced to focus on the operations which can enhance cost efficiency while boosting service delivery and value proposition. Case study Zara 1. The aim of this case study is to analyze how ZARA has achieved its success through various business strategies. Operations management challenges for wools worth: Challenges faced by human resource managers because of technical challenges: As human resource department is responsible as they manages the organization and the persons those who are working there.As the technology advances, it creates technical changes … It was first step and strong foundation to his success. Study for free with our range of university lectures! Many organizations in the textile industry manufacture clothes in bulk and offer low prices for their products. ZARA is a Spanish clothing and accessories retailer based in Arteixo, Galicia. Managing global supply chain 12 Retrieved September 10, 2010, from Scribd: http://www.scribd.com/doc/37281774/Zara. 3.Production feedback. From the above illustration in Figure 2, we can deduce that operation’s strategy is concerned with the reconciliation of market requirements and operations resources. Concerning Zara case study, the transformed resourced refers to the raw materials . *You can also browse our support articles here >. What types of systems are the most essential for this company in its current environment? B., & Hoppe, R. M. (2001). October 22, 2014 purchased (ie. First Zara store was opened in 1975,in Spain by Inditex father and founder Amancio Ortegas Gaona. Zara has demonstrated this characteristic of by its flexibility. The business model, of the clothing retailer ZARA and discuss how the five operations performance objectives support Zara’s corporate strategy. Other production activities are completed via a network of about 500 subcontractors in close proximity to Zara’s operations at La Coruna. Declaration: 1 Zara: Time-Based Competition in a Fashion Market. Assessment brief: Individual students will participate in the development of an on-line discussion forum where they will provide their reflection and evaluation of the content of two (2) of the other groups’ presentations. Though the cost of production in Spain is 17-20% more expensive than Asia, Zara does have a competitive advantage over its competitors in regards to operations. Zara is a company that defines what the fashion industry has termed “fast fashion.” The flagship specialty chain of Spain-based clothing conglomerate, Inditex, Zara has built an information and distribution system that allows it to put the latest runway fashions in its stores in a matter of … All work is written to order. Institute of Logistics and Transport. Imagine you are in charge of Zara’s supply chain operations. Case Study: Supplying Fast Fashion. Zara became most successful brand, supply chain case study (OPPapers.com, 2009). Market development combined with new sources of global competition has led to over-capacity in many industries. This effect is defined by Cachon et al (Cachon, Randall, & Schmidt, In Search of the Bullwhip Effect, 2007) as. Zara operation management, A business case! Bibliography / References 12 (2005). The present essay deals with the operations management of ZARA, a Spanish chain store. The vertical Integration advantage can be seen in Zara’s centralized logistics and distribution. (2008). In an industry that traditionally allows retailers to change a maximum of 20 percent of their orders once the season has started, Zara lets them adjust 40 percent to 50 percent. Since the company chooses to hand the process of design, production, and distribution all in-house its retail stores are then able to react much faster to the changing trends in fashion in comparison to their competitors. This in itself provides additional value to stakeholders, customers, and stores in producing quality clothing at affordable prices. These are based on the dual objectives of working without stocks and responding quickly to market needs. It sells up-to-the-minute ‘fashionability’ at low prices, in stores that are clearly focused on one particular market. Zara brand has been said to be ‘synonymous with the cutting edge of fashion at affordable prices.’ (123helpme.com, 2008). The concept of sustainability and competitive advantage is considered with other business models and compared with successful and unsuccessful company. Upadhyay, S. (2009, August 21). The first store opened by accident in 1975 due to a large pyjamas order cancellation. Our academic experts are ready and waiting to assist with any writing project you may have. Christopher, M. (2000). Majo Published: 1st Jan 2015 in Also a world leading fashion retailer brand of Inditex. This detailed case study will provide the complete knowledge of Operation management and its criteria’s. Many competitors rely on a small elite design team that plans both design and production needs well in advance. Project Management-Zara POS system Case Study. Key drivers of this reconciliation are the importance of setting appropriate performance objectives and understanding the decision areas that determine resource deployment. This case discusses the unique supply chain management practices of Spanish garments retailer Zara, which enabled it to gain competitive advantage over other fashion retailers in the world. Registered Data Controller No: Z1821391. In this exercise your mental model of Zara’s supply chain will expand and your understanding of how this supply chain works will deepen. (Slack, Chambers, Betts, & Johnson, 2006). Due to Zara’s ownership and control of production, they ensure timely delivery and service. The proximity of their manufacturing and operational processes allows Zara to maintain the flexibility necessary to design and produce over 12000 new items annually. Figure 1: Operations Management, Input-Output. - The value chain of Zara 8 Just as there is no consensus on the definition of ‘strategy’ means, ‘operations strategy’ cannot be explicitly defined. 123HelpMe.com. (Zara’s Secret for Fast Fashion, 2005). VAT Registration No: 842417633. Zara tend to sending designer to other countries to search of new trends. Through these means, sales forecasts were pragmatic and product launches were swift as Zara was equipped with the information needed to be competitively agile in copying and launching products to align with emerging trends in the fashion industry. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! For example, in Zara stores, Salgado should evaluate the new system so as to determine whether the commercials and the management … Operations management is a vital part of an organization to achieve success because . Zara grew very fast and currently in 2012 has 1,617 stores worldwide. Although most of their stores run out of stock, signifying that they have low dependability in terms of product availability, another perspective of dependability in terms of keeping to date with fashion is achieved. Lower inventory cost is a key sustainable advantage as it enables Zara to manufacture and sell its products at cheaper prices. Adapting the Slack & Lewis Strategy Matrix (Nigel Slack, 2008) for Zara, The supply networks, capacity and Process technology’s speed is critical to the organization’s performance as shown in Fig 5. OPPapers.com. Ease of operation: When upgrading the system, it should be ensured that the new system is easy to operate. 1. This ensures Zara’s brand promise to customers of exclusivity and design freshness, thereby minimising inventory of old stock in any part of its supply chain from raw materials to end user. EMMANUEL COBBLAH GH19007 Zara – The world’s largest fashion retailer 1. Virginia International University These activities include: managing purchases, inventory control, quality control, storage and logistics. Zara’s Business Model is one of the finest the fashion retail industry has ever seen. [3], Mr. Ortega the CEO of the Inditex, the parent company of Zara, once said that the secret to retail success is to ‘have five fingers touching the factory and five touching the customer’. Zara needs just two weeks to develop a new product and get it to stores, compared to the six-month industry average, and launches around 10,000 new designs each year. zara case solution The most serious issue with maintaining the current IT framework is that Zara will not grow rapidly as most vendors are changing their machines and even though, one seller guaranteed that he will keep furnishing Zara with DOS framework,however the risk connected with the customer is high in light of the fact that Zara … The added flexibility helped Zara on two fronts: shorter lead times and fewer inventories. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. This report “Operations Management: Fashion Retailer – Zara” identifies why outsourcing has not been pursued by Zara and offers recommendations based on. Cachon, G. P., Randall, T., & Schmidt, G. M. (2007). Zara's vertically integrated supply chain system enabled the company to place the latest designs in any store across the world … Free resources to assist you with your university studies! It concludes by providing recommendations for updating the current OS along with its advantages. In their book, Operations Strategy, Nigel Slack and Mike Lewis described the four distinct perspectives on operations strategy, that have emerged, as illustrated in Fig. ZARA’S CASE STUDY The Strategy of the Fast Fashion Pioneer Ana Mafalda Ricardo Morgado Costa Case study submitted as partial requirement for the conferral of Master in Management Supervisor: Prof. Mónica Ferreira, Invited Professor, ISCTE Business School, Marketing, Operations and General Management Department … ... Zara employs a chase demand capacity management [5] in its operations. In this case study about three organizations that are Benetton, H&M and Zara, the garment organizations. In J. Fernie, & L. Sparks, LOGISTICS & RETAIL MANAGEMENT: Insights into Current Practice and Trends from Leading Experts (pp. Supply Chain Management Review . The case study outlines how Zara transforms from a local clothing … The supply chain of Zara 6 Kellogg's® Special K® Target Market Report, The Implementation Of The Management Functions In A Workplace. Slack, N., Chambers, S., Betts, A., & Johnson, R. (2006). Zara use such system to differ substantially … 2 3. Operations Strategy. It their flagship range of chain stores and are headquartered in Spain. We need to give consumers what they want, and if I go to South America or Asia to make clothes, I simply can’t move fast enough.” [4] (123helpme.com, 2008). Whatever the operations strategy of an organization, it must in some way reflect the requirements of the organization’s market. (Ferdows Kasra, 2005). Different companies apply different principles in their supply chain, and their logistic management strategies are different. Question. ZARA Zara is … What types of systems are the most essential for this company in its current environment? Linking theoritical concepts and real life SCM 9 In 2002, Accenture (a global management consulting, technology services and outsourcing company) published an article by Roger W. Dik and Hans Von Lewinski on its website on how Zara reconstructed its supply chain so that daily sales data are immediately shared with its stores, its headquarters and its concentrated production network by providing the shops with the necessary technology such as customized handheld computers and logistics capabilities to collaborate with other partners in the company’s supply chain. Designers (of average age 26) draw the design sketches then discuss it with market specials and planning & procurement staff illustrating a flexibility of ideas generation and on the other hand the huge number of designs reflects the ability to meet almost all the fashion requirements by customers of all ages (up to 55). Zara’s success can be attributed to its unusual operations management and supply chain strategies. Accenture. Company Registration No: 4964706. We're here to answer any questions you have about our services. Table of Contents: Also, as fashion is a fast forward industry, designer plays an important part of company. Info: 3298 words (13 pages) Essay However, the innovativeness of the company matters in its success level. When majority of the large retailers like GAP and all are struggling in many operational countries, business model of zara is giving them handsome returns in the form of a 20% yoy growth in majority of the segments (Store vs Store, QoQ etc).