We have been talking a lot about what are some of the qualities of efficient supply chains, and how Zara has managed to create such an efficient supply chain so that it serves as a competitive advantage for the company. I started digging a little deeper to find out, what exactly is the secret to this superior supply chain that Zara has.

According to a case study: “Zara’s Secret for Fast Fashion” written by Ferdows et al. Zara’s efficient supply chain is a sum of many well prepared and managed functions, one of the most important ones being the free flow of communication. The Zara retail stores are designed in a away that maximizes the possibility for consumers, sales associates and managers to communicate with each other. Zara has also decided to have its head design offices and manufacturing plants located next to each other in a small Spanish town. This way designers, marketers and manufacturers can exchange ideas and communicate in an effortless manner.

Zara also applies a just-in-time inventory system where small batches of inventory are delivered to the retail stores frequently. This does not only reduce inventory costs but it also boosts up sales; when customers see only one of their favorite garments hanging on the racks they know they will have to buy it there and then or someone else will.

Zara is very much vertically integrated in its supply chain by owning all of its retail stores, manufacturing plants and most of their fabric plants. This way Zara can get their products where they want them, and when they want them without having to negotiate with many intermediaries.

All of these factors allow Zara designers to watch these to die for Isabel Marant red leather pants walk down the catwalk in Paris fashion week, and have these copy cats hanging on the racks in no more than 6 weeks. Genius!

Until next time,

Roosa xxx

Sources: http://hbswk.hbs.edu/archive/4652.html , pictures google