It studies how it can be improved and gives recommendations. Since Zara is one of the industry leaders and has one of the best supply chains, it required fewer recommendations for improvement. Finally, the paper analyzes the location of the company’s plants and distribution centers to see whether they are optimal. In Zara’s case, they are in the short run but may cause problems in the long run.
Zara is a Spanish flagship store of the Inditex Group and a key player in the European fashion retail market. It started operations in 1975 by opening its first store in La Coruna and since then has been operating as a fast fashion company. It is one of the largest brands, by the Inditex Fashion Retail Group, that has 723 stores in 56 countries making sales of Euro 3.8 billion (India Supply Chain Council, 2006).
Its business model is simple; it imitates fashion off the runway and distributes it to the customers in the shortest time possible, even before designers themselves can reach the customers. Therefore, it has shorter lead times, more styles but scarce supply of these styles. To manage this kind of efficiency, Zara’s supply chain management must be efficient and that, it is. Zara uses a vertical supply chain management system, one of the best in the industry that allows it to implement its business model of fast fashion effectively.
Zara’s position is an industry leader in the fashion retail market. It has a very high product turnover – it produces more than 11,000 products annually. It caters to the trendy, middle class man and woman of ages 14 to 35. The mother buys Zara because it is affordable and the daughter buys from Zara because it is trendy (Dutta, 2002).
This paper will study Zara in the light of its Logistics and Supply Chain Management. It will be broken down into four main parts. First of all, the importance of measuring the performance of Zara’s Supply Chain will be analyzed. Secondly, key performance indicators or KPIs will