Supply and Demand’ is a inseparable phrase, one interrelated to the other. As there is never a definite and stable market, it is challenging for a company to manage its inventory while varying its types of products to cope with the volatile customers’ taste , and hopefully to create and sustain profits.
A case that I recent studied in my business fundamental class is about the success of Zara, a current leader in fashion industry. One thing that caught my eye was their human chain of raw data collection. I am surprised that Zara does not rely much on the MIS or technology to record and update sales (which contrast to the high reliance on MIS in Dell the computer company, whose chain from design to production is all based on communication between its suppliers, factories and delivers of products to cusotmers).Instead, they rely on their store managers to frequently check with the stores’ inventories and evaluate with their salesmen about unsold items. Managers even have the rights to pick what to put in the store, be involved in the design team, and directly communicate to country managers. Health competitions and rewards are also create within teams in its production branch.
This unique (flatten) organizational structure creates feedback system, empowerment of employees, and tighten the relationship between company and employees (which shorten the chain of command and creates motivation for employees to work hard as their opinions are recognized). And this also accounts for Zara’s efficiency and flexibility in collecting raw data that advance its production line and accuracy in adjusting its supply.