The retailer Zara is mentioned in chapter 18 of the Schroeder textbook as an example of...

The retailer Zara is mentioned in chapter 18 of the Schroeder textbook as an example of global logistics. What is unique about Zara's logistics strategy and in what ways has it made them successful?

Expert Solution

Owned by distribution group Intidex, Zara as a brand is known for its responsiveness with respect to the current trends in the industry. The biggest success of Zara is its supply chain. Here’s how:-

In-House Production:- Zara performs a majority of its production in-house which allows the company to determine the speed, frequency, variety and quantity required for a particular season. 50% of its clothes are manufactured before a particular season starts which means that the rest of the 50% production takes places during the season.
Inventory Management:- Zara has developed their own inventory optimization model which determines the quantity that needs to be delivered to each and every store via shipment twice in a week. The shipments contain the exact quantity which the store needs. They are a brand known for not stocking up piles of unwanted inventory in their stores.
Effective Distribution System:- Competing with its own speed every time, their strong distribution network helps the company to supply products to stores in Europe within 24hrs and takes 40 hours to deliver in stores located in America and Asia.
Coordination Between Operations and Business Strategy:- The combination of cross-functional operations strategy, fast-paced production capacity, well-managed inventory system and their idea of ‘fast fashion’ delivers value to all its customers across the board. Its a near perfect synergy across all department.

To ensure that it is still best in the business, Zara controls its manufacturing and supply chain better than most of its competitors.

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