Department of Fashion Management Studies National Institute of

Fashion Technology (Ministry of Textiles, Govt. of India)

Topic: Emerging technological developments in the field of Supply and Value Chain Management of ZARA

Fashion Production and Quality Management

End Term Jury

Submitted By:

Aastha Tomar
Bandhavi Punna
Meghna Roy
Nikita Birari
Shradhanjali Borah
INTRODUCTION
• Zara, founded in 1975 by Amancio Ortega and Rosalía
Mera in Spain.
• It is always looking to meet the needs of its customers
and following the newest fashion trends in the market
with over 2,000 stores in 96 countries.
• Zara is a Spanish fast fashion retailer brand focused on
design, production, distribution, and sales through its
extensive retail network.
• Zara’s products range from clothing, accessories,
shoes, swimwear, beauty, and perfumes.
• Zara is the main brand of the Inditex group, the
world’s largest apparel retailer with revenue of
approximately 31 billion U.S. dollars in 2022.
• The famous fast-fashion company has proven the
reliability of its widely acclaimed business model,
built on technology innovation and customer
experience.
 IDENTIFYING MARKET
TO GIVE CUSTOMERS WHAT PREFERENCES
MISSION THEY WANT AND GET TO THEM
FASTER THAN ANYONE ELSE
FAST FASHION STRATEGY

ZARA MISSION AND CONTRIBUTE TO THE

VISION STATEMENT SUSTAINABLE DEVELOPMENT SOCIAL DEVELOPMENT
ANALYSIS OF SOCIETY AND THAT OF THE
VISION
ENVIRONMENT WITH WHICH
THEY INTERACT ENVIRONMENT
SUSTAINABILITY

CREATIVITY
CORE VALUES
ADAPTABILITY

LEADERSHIP

PASSION

CREATIVITY ABOVE
EVERYTHING ELSE

QUALITY ABOVE QUANTITY

 SUPPLY CHAIN OF ZARA
Supply Chain of ZARA

RAW MATERIALS SUPPLIERS MANUFACTURING DISTRIBUTION RETAIL

• Fabric Manufacturing %: • Centralized • Zara offers newly

Spain
distribution system- designed and fresh
• Thread Hong Kong • 50% - Spain. minimizes lead time styles garments and
• Zip • 26% - Europe of goods. accessories every 2
China • On an average: weeks.
• Accessories Poland • 24% - Asia • 24 hours- delivery • It mainly targets
• Trims and Africa. within Europe fashion forward
• 48 hours- delivery in millenial and Gen
America or Asia. Z.
TECHNOLOGY USED IN THE SUPPLY CHAIN OF
ZARA
JIT (Just in Time)
• Zara invested in a sophisticated telecommunication system,
improving the information flow between headquarters and supply,
production and sales sites and avoiding any type of bureaucratic
structure.
• This system allows Zara to take appropriate and quicker decisions
due to the information flow being very fluent. The JIT system
allows Zara to improve quality, to diminish manufacturing time,
to eliminate waste, to increase productivity and to have better
relationships between suppliers, thus improving its overall
responsiveness.
• The use of a consumption information system linking together the
merchandising and the back-end processes is an original technique
used by Zara that permits designing teams to possess relevant
information about customers’ preferences.
• This technology contributes to the responsiveness of Zara and the
data gathered by this system allow teams to propose new designs
that match consumers’ expectations, and in a timely manner.
 PDA (Personal Digital Assistant)
Zara makes use of human intelligence and information technology like PDA (Personal Digital Assistant)
devices to form a hybrid model for flow of information from stores to the headquarters. Managers use devices
to send formalized information concerning feedback from customers and ordering needs straight to in-house
designers. This technique also provides details on less-desirable products and results into well managed
inventories, reduced costs from obsolete products, linkages between supply and demand.

Inventory Management Communication Warehouse Management:

• Stock counting, • Efficient communication and
• stock level updates collaboration among supply
chain teams.
• product location tracking.
• Exchange of information,
• Scan barcodes or RFID tags on receive notifications, and
products, updating inventory records
coordinate activities for
• Maintaining accurate stock levels smooth operations and timely
across warehouses and distribution decision-making.
centers.
• Optimize and streamline
warehouse operations
• Barcode scan on incoming
and outgoing products
• Update inventory records
• Facilitate efficient picking,
packing, and loading
processes.
Robotics
• BOPIS (Buy Online, Pick up in store) process with
automation.
• AI Robots fetch products from the back of the automated retail
stores.
• Purchasers who have placed the products’ orders through
online enter or scan code at the collection point in store.
• AI Robot searches for the requested order and takes it to the
drop box where consumers collect it.
• System designed around an optical barcode reader which scans
the QR code or accepts the PIN codes of orders placed online.
• After scanning the code, robot moves through the warehouse
and delivers the product where the shopper can collect it.
• Capacity to handle 2,400 packages simultaneously.

Partners: Fetch Robotics, Intel, Jetlore, El Arte de Medir

 Transportation

Fleet Management Systems Transportation Management GPS and Telematics: Electronic Data
Systems (TMS) Interchange (EDI)
• Tracks and manages • Optimize transportation • Tracks movement of • Facilitates exchange of
transportation vehicles. operations by managing shipments. business documents and
• Provides real-time visibility orders, planning routes, and • Allows for real-time data electronically
into vehicle location, routes, consolidating shipments. tracking, route between Zara and
monitor fuel consumption, optimization, and transportation partners.
and efficient vehicle • Enables streamlining accurate delivery
maintenance. transportation processes, estimations. • Seamless communication,
reduce costs, and enhance automates order
overall efficiency. processing, and reduces
paperwork.

Partners: DHL, FedEx, UPS, Maersk

Cloud Computing

• Cloud computing helps optimize supply chain by exchanging notes

via customized handheld computers.
• This data is then transferred, using cloud computing, to the designers.
• The designers then update the product and send the final draft to
different manufacturers. And within weeks a new product is on the
shelves.
• The product is improved and is possible because of the IT
Infrastructure. Daily sales numbers, delivered to systems using cloud
computing, show the designers what and what isn’t selling enabling
them to be agile.
• Zara’s customer service policy is highly focused on this process. Zara
is able to replenish its clothing collections in just three weeks, as
compared to the average of nine months it takes for its competition.
• Advantage- warehousing costs are reduced, as stores sell only what
people are looking for at all times.
RFID (Radio Frequency Identification)

• Inditex uses the RFID solution for identification of each

item of Zara clothing through radio frequency.
• The RFID system encodes each garment at
manufacturing and after that, it is able to identify where
each item is during all the stages of the supply chain.
• RFID technology also allows customers to check if an
item is in stock at their local store to guarantee their
purchase
• RFID tags inside anti-theft sensors. The security tag
case protects the chip and allows to remove it at check
out. As tags are in store the retailer recycles them,
testing and sending them back to the manufacturing
stage.
• From feedback, questionnaire or personal assistant and
most importantly RFID tag Zara gathers all data and
analyzes performance of features of different SKUs
 Big Data

• Zara collects structured and unstructured data, such as customer

feedback and purchase data, to improve their designs and
customer experience
• RFID tags are used to track the movement of merchandise from
warehouse to stores, and to monitor which products are selling
well and need restocking
• Inditex, Zara's parent company, has a central data processing unit
that monitors the movement of merchandise outlets and applies
big data analytics to make sense of the data
• Sales professionals use the analytics to identify likes and dislikes,
which designers then use to adjust their designs accordingly
• Zara's factories are located in Europe and North Africa, close to
their business, which helps to shorten shipment time to stores
within 2-3 weeks
• Zara does not sell items at discounts as they do not overdo the
manufacturing process
 Flow Time Analysis
Step 1 Step 2
Design of the new collection – around 1 week Contacting suppliers to order needed garment

Step 4 Step 3
Automated manufacturing of the new Delivery of ordered garments to manufacturing
collection – up to one week facilities

Step 5 Step 6
Delivery of the new collection from
manufacturing facilities around the globe to Inspecting and sorting finished clothing
distribution center in Spain.
Step 7
Step 8
Distribution of the sorted clothing to stores around
Selling apparel either online or in stores the globe – 10 to 15 days
 Value chain of Zara
Firm Infrastructure:
Secondary Activities

Planning, Outsourcing, Financing, Suppliers Relationships, Operational Contractors, Warehouses And Owned
Factories.

Managing Sourcing Procurement And product Planning:

Monitoring Inventories, Allocating Production, Tracking Shortages And Oversupplies.

Technology Development:

Profit margin
Direct Communication From Physical Stores To HQ, CAD System, Hardware & software In Warehouse

Human Resource Management:

Planning, Outsourcing, financing, Suppliers Relationships, designers, operational Contractors, warehouses And
Owned Factories.
Primary Activities

Inbound Logistics Operations Outbound Marketing And Service

IT Enabled Information System Logistics Sales Customer
Jit Support Decisions Distribution Limited Inventory Feedback
Centers And Reach Returns/
Stores Exchange
TECHNOLOGY USED IN THE VALUE CHAIN OF
ZARA
 RFID
• Retailers and buyers can determine whether
clothing in a certain size is available by choosing
products online, in-store, or shipping from
distribution centers.
• Effective product distribution, accurate in-store
product management, quick stock replenishment,
precise and agile product intake, improved security
controls, reliable inventory counts, and improved
customer experiences.
AUTOMATED WAREHOUSE
• The automated warehouse system at Zara is known
as the "MFC" (Manhattan Fashion Center) located
in its distribution center in Zaragoza, Spain - a
highly automated system that uses robots to move
clothing items around the warehouse and fulfill
orders.
• The MFC has enabled Zara to improve its logistics
and supply chain management, reduce lead time,
and increase the speed of its delivery to customers.
 3D PRINTING
• 3D printing technology allows to create
prototypes of new clothing designs and enables
designers to quickly create and test new designs
before sending them to production, reducing the
time and cost required for prototyping.
• Cheaper and makes product more visible to all
kind of costumers, also helps with quick
adaption of global trends.
AI TECHNOLOGY
• AI technology analyzes customer data and
identify trends in fashion and consumer behavior
and helps in design and production decisions ,
improving the overall customer experience.
• It helps with Demand forecasting and Inventory
management with the help of AI with sensors and
real-time data to monitor inventory levels, track
sales, and restock items as needed.
 AR TECHNOLOGY ONLINE STORE
• AR technology allows customers to use their
• Zara's online store is a popular destination for
smartphones to view virtual models wearing Zara
fashion-forward individuals looking for
clothing items enabling the customers to see how the
affordable, trendy clothing options from a
clothing looks on a model before making a purchase.
reliable and convenient online retailer enabling
• The AR features include showing models wearing
the customer to directly purchase from online.
selected looks from its ranges when a mobile phone is
• This technology allows Zara to reach a wider
held up to a sensor within a store or designated shop
customer base and provide a seamless shopping
windows and allows customers to click through to
experience across multiple channels.
buy the clothes.
CONCLUSION

• The value and supply chain of Zara have been crucial for the
growth of the company and its success in the fashion
sector. The core of Zara's value offer is its commitment to
giving customers fashionable, budget-friendly solutions that
are consistently updated to reflect newest trends.
• The success of Zara is greatly influenced by its supply chain.
The business has a vertically integrated supply chain, which
has complete control over every stage of production, from
design to manufacture to distribution.
• Additionally, Zara's supply chain enables to conduct business
in a more ethical and sustainable manner. Zara guarantees that
its goods are created with environmentally sustainable
materials and that its employees are treated fairly.
• With technological development in the supply chain and value
chain Zara is one step ahead as these technologies help the
brand to run its operation smoothly.
THANK
YOU
 REFRENCES

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