positioning: Zara’s quick response operating strategy puts them in Competitive
Advantage with rest of it counterparts, they fancy themselves in innovation
with Fast changing trends in a fashion industry which keeps themselves aligned with
the competitors not only in European markets but also the Italian giants like
United colors of Benetton.
Sensitive Strategy: Zara’s have a Design team that takes care of Latest
International fashion trends and are responsible for Initial Delineate colors
and prints etc. which is then checked by their Commercial team on the stringent
parameters of commercially viability, Allocation Suppliers of raw materials .and
fixation of cross currency price positions of the Garments. The whole process
of Restocking and design modifications only takes around 14 days to complete ,in
order to minimize the Bull whip effect they keep the Production Batch small so
that they are not left with big unsold inventory of the experimented designs that
they have to produce in order to cope up
with the changing trends
Integrated Supply Chain: All the merchandise manufactured in Zara’s are in
house by their own highly Automated Factories with Suppliers are all close to their
Factories and order is only placed on when its needed hence no holding of inventory,
the material is only purchased in few colors which dyed by their own subsidiary
reducing the turnaround time to as low as 1 week. All the other finishing
processes are completed by specialized sub-contractors working exclusively for Zara’s.
Clothes are ironed in Advance and packed on hangers, with security and price
tags affixed. overnight trucks are used to deliver to European stores and air freights
is used to ship to the other countries. The whole process of vertical integration
of production system allows Zara’s to place a garment in any store around the
world in a period between two to three weeks only.
Lead times: Company focuses on Under supply policy, productions are always kept
lower than the expected sales in order to reduce the Stock obsolesce and stock piling,
the design to production Cycle completes in approx. 14 days only in comparison
to the industry where lead times of Many months are usual.