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    Assignment 1: Adji Candra Kurniawan Harummi Sekar Amarilis

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    Faymi Chairunisa
    Zara is a fashion retailer owned by Inditex, the largest apparel company in Spain. Zara uses a highly responsive supply chain strategy to introduce new designs weekly and change store displays every 3-4 weeks based on customer preferences. This allows Zara to sell most products at full price and have half the markdowns of competitors. Zara manufactures in Europe and Asia, with 40% production in-house and the rest outsourced. More than 40% of finished goods and most in-house production occur after the sales season starts. Zara's strategy allows it to reduce inventory and forecast errors through frequent replenishment of stores multiple times a week.

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    Assignment 1: Adji Candra Kurniawan Harummi Sekar Amarilis

    Uploaded by

    Faymi Chairunisa
    22 views6 pages
    Zara is a fashion retailer owned by Inditex, the largest apparel company in Spain. Zara uses a highly responsive supply chain strategy to introduce new designs weekly and change store displays every 3-4 weeks based on customer preferences. This allows Zara to sell most products at full price and have half the markdowns of competitors. Zara manufactures in Europe and Asia, with 40% production in-house and the rest outsourced. More than 40% of finished goods and most in-house production occur after the sales season starts. Zara's strategy allows it to reduce inventory and forecast errors through frequent replenishment of stores multiple times a week.

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    Zara is a fashion retailer owned by Inditex, the largest apparel company in Spain. Zara uses a highly responsive supply chain strategy to introduce new designs weekly and change store displays every 3-4 weeks based on customer preferences. This allows Zara to sell most products at full price and have half the markdowns of competitors. Zara manufactures in Europe and Asia, with 40% production in-house and the rest outsourced. More than 40% of finished goods and most in-house production occur after the sales season starts. Zara's strategy allows it to reduce inventory and forecast errors through frequent replenishment of stores multiple times a week.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    22 views6 pages

    Assignment 1: Adji Candra Kurniawan Harummi Sekar Amarilis

    Uploaded by

    Faymi Chairunisa
    Zara is a fashion retailer owned by Inditex, the largest apparel company in Spain. Zara uses a highly responsive supply chain strategy to introduce new designs weekly and change store displays every 3-4 weeks based on customer preferences. This allows Zara to sell most products at full price and have half the markdowns of competitors. Zara manufactures in Europe and Asia, with 40% production in-house and the rest outsourced. More than 40% of finished goods and most in-house production occur after the sales season starts. Zara's strategy allows it to reduce inventory and forecast errors through frequent replenishment of stores multiple times a week.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 6

    Assignment 1

    Adji Candra Kurniawan


    Harummi Sekar Amarilis
    Example of Supply Chain
    Zara: Apparel manufacturing and retail
    • Zara is a certain of fashion stores owned by Inditex, Spain’s largest apparel
    manufacturing and retailer. In 2012, Inditex reported sales of about 16 billion euros
    from more than 6.000 retail outlets in about 86 countries. In an industry in which
    demand is fickle, Zara has grown rapidly with strategy to highly responsive to
    changing trends with affordable prices. Whereas design-to-sales cycle time in apparel
    industry have traditionally averaged more than six months, Zara has achieved cycle
    time of four to six weeks. This speed allows Zara to introduce new design every week
    and to change 75 percent of its merchandise display every three or four weeks. Thus,
    Zara’s products on display match customer preferences much more closely than those
    of the competition. The result is that Zara sells most of its products at full price and
    has about half the markdown in its store compared with the competition.
    Cont.
    • Zara manufactures its apparel using a combination of flexible and quick sources in
    Europe (mostly Portugal and Spain) and low-cost in Asia. This contrast with most
    apparel manufactures, who have moved most of their manufacturing to Asia. About
    40 percent of the manufacturing capacity is owned by Inditex, with the rest
    outsourced. Products with highly uncertain demand are sourced out Europe,
    whereas product that are more predictable are sourced from its Asian location.
    More than 40 percent finished good purchases and most of its in-house production
    occur after the sales season starts. This compares with less than 20 percent
    production after start of a sales season for typical retailer. This responsiveness,
    along with the postponement of decision until trends known, allow Zara to
    reducing inventory and forecast error. Zara has also invested heavily in information
    technology to ensure that the latest sales data are available to derive replenishment
    and production decision
    Cont.
    • In 2012, Inditex distributed to stores all over the world from eight
    distribution-centers located in Spain. The group claimed an average
    delivery time of 24 to 36 hours for European stores and up to a
    maximum of 48 hours for stores in America and Asia from the time the
    order received in the distribution center (DC) to the time it was
    delivered to the stores. Shipments from the DCs to stores were made
    several times a week. This allowed store inventory to closely math
    customer demand.
    Cont.
    The following questions raise supply chain issues that are central to Zara’s strategy and
    success:
    • What advantage does Zara gain against competitor by having a very responsive strategy?
    • Why has Inditex chosen to have both in-house manufacturing and outsourced
    manufacturing? Why Inditex maintained manufacturing in Europe even though
    manufacturing in Asia is more cheaper?
    • Why does Zara source product with uncertain demand from local manufacturers and
    product with predictable demand from Asia?
    • What advantage does Zara gain from replenishing its stores multiple times a week
    compared with a less frequent schedule?
    • Do you think Zara’s responsive replenishment infrastructure is better suited for online
    sales or retail sales?
    Petunjuk
    • Tugas dilaksanakan secara berkelompok, dikumpulkan dalam bentuk
    PPT
    • Jangan lupa sertakan nama dan NIM pada slide awal
    • Deadline pengumpulan 29-09-2021, Pukul 16.00
    • Pengumpulan cukup dilakukan 1 orang per kelompok

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