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Case Study Analysis – Zara

Word count: 3800

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Zara follows a just-in-time industrialized method (Crofton & Dopico, 2007) and all departments like supply chain, production, including sales sites all are remain in close connection with the corporate headquarter in Arteixo, outside La Coruña, including a 130,000-square-meter warehouse (Dess et al., 2009) in proximity of headquarter through a highly developed telecommunications arrangement.

The business structure of Zara (as shown in Figure 1)  is significant in a way that the productions of its most fashion-insightful products take place internally, though other chains of Inditex do not follow any such strategy. The immense priority is given by Zara to the tracking system regarding the preferences of customers and it is carried out incessantly and intensively by Zara’s designers before giving orders to internal and external suppliers. Throughout the year approximately 11,000 distinctive products (Lopez & Fan, 2009) are created including numerous hundred thousand SKUs in the various dye, material, and volume in comparison to 2,000–4,000 products of main market rivals. The manufacturing of nearly all the time-sensitive products is done through vertical integration (Mihm, 2010) and the production process compromises of small batches. Zara’s central delivery center is the hub of all kinds of products either produced in-house or outside. From here, items are then sent off two times in a week straightaway to the well-situated and appealing stores which consequently reduced the inventories keeping and requirement of warehouses.

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