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1 - ZARA Solution
1 - ZARA Solution
1 - ZARA Solution
• They can introduce new design every week and thus change 75%
display every 3-4 weeks.
• Reduce inventory overhead and forecast errors.
• Sell most products at full price and only half the markdowns in stores
compared to competition.
• Multiple weekly shipments allow close match to demand.
1) What advantage does Zara gain against the Competition
by having a very responsive supply Chain?
More
Low Profits
Inventory
Match and Higher
Demand Price
Introduce
New Fast
2a) Why has Inditex chosen both In-house and outsourced
manufacturing?
Quick Cheap
• The frequency of replenishment has made ZARA increase the size and
also centralize its distribution design by handling its global operations
through 8 Distribution canters based in Spain.
• This centralized structure means that products can be distributed
rapidly from in house manufacturing in order to meet worldwide
demands in as little time as possible.
5), Do you think Zara’s responsive replenishment
infrastructure is better suited for online
sales or retail sales?
• Whilst its quick distribution system allows ZARA to respond to trends
very quickly its lack of decentralized distribution means that it is better
suited to retail as online sales tend to have more a diverse product
demand and customers expect quicker delivery times.
• Companies such as Amazon are able to respond quicker to online sales
due to the fact that they have distribution centers all around the world
and can offer same day delivery. ZARA’s 24 hour delivery times from
Spain to outlets all around the world may not be as efficient with online
sales as it is with retail sales.
• Reiterating it in the online sales will be extremely challenging as the
Point-of-Sale is different