ZARA SUPPLY CHAIN MODEL

The company, Inditex, has two dozen manufacturing plants in Spain and more than
1,160 stores in 34 countries from the United States to Japan.
Zara developed a business model that incorporated the following three
goals for operations:
Develop a system the requires short lead times,
Decrease quantities produced to decrease inventory risk
Increase the number of available styles and/or choice
ZARA has 3 sales formule:-
short lead time =more fashionable clothes
lower quantities= scare supply
more styles=more choice &more chance of hitting it right

50% of the products Zara sells are manufactured in Spain, 26% in the rest of Europe,
and 24% in Asian and African countries and the rest of the world..The company can
design a new product and have finished goods in its stores in four to five weeks.It can
modify existing items in as little as two weeks. Shortening the product life cycle means
greater success in meeting consumer preferences..Zara maintains a design team of 200
people, all of which produce approximately 12,000 new styles per year for Zara.

SHORT LEAD TIMES:keeping up with fashion
by focusing on shorter response times,zara can quickly identify and catch a
winning fashion trend.
Trend identification comes through constant research not just traditional
consumer market research ,but a daily stream of emails and phone calls from
stores to head office.
Zaras machinery can produce a response in terms of a new style or modification
within 2-4 weeks.
REDUCING RISKS
Zara not only reduces its exposure to any single product but also creats an
artificial scarcity to reduce the quantity manufactured in each style
The result is that Zara discount only about 18 per cent of its products.
LEADERSHIP IN NUMBERS
zara produced more style,roughly 12,000 a year that enables them to offer
choices in more current fashions than many of its competitors.
Zara core competitive advantage
High products turnover
Low level of inventory due to fast supply chain
Efficient distribution system
Commitment of its employees
Scanning of the fashion and market trends, and meeting the consumer demand
relating to fashionable clothes
Flexible production system

ZARA GARMENT SUPPLY CHAIN

DESGIGN PURCHASING PRODUCTION
DISTRIBUTION RETAILING

ZARA SUPPLY
ZARA obtains 40% of its fabrics supply from another Inditex owned subsidiary.
50% of the fabrics are produced undyed
60% of the fabrics come from a range of 260 other suppliers
OWNERSHIP AND CONTROL OF PRODUCTION
ZARA manufactures 50% of its products in its own network of 22 Spanish
factories
18 of which are located in and around the La Coruna complex
These factories use 500 sewing sub-contractors in very close proximity to La
Coruna
The other half of its products are produced from 400 outside suppliers, 70% are
in Europe.
KEEPING COST DOWN
ZARA Relies more on having prime retail location than on advertising for
attracting costumers
ZARA spends 0.3% of its sales on advertising compared to an average 3.5% of
competitors
Only about 18% of ZARA clothing doesnt work with its costumers and has to be
discounted, thats half of the industrys average which is 35%.