Outline:1. History and Background2. Foretelling of Fashion3. Production Planning4. Procurement5. Market- Logistics Decision6. Company’s Success7. Zara’s Store Worldwide8. Online Presence9. Website10.Questions11.Disclaimer

History & Background of ZARA

ZARA is a Spanish clothing and accessories retailer based in Arteixo, Galicia.

Founded in 24 May ,1975 by Amancio Ortega and Rosalía Mera.

Zara was described by Louis Vuitton Fashion Director Daniel Piette as "possibly the most innovative and devastating retailer in the world.

Zara needs just two weeks to develop a new product and get it to stores, compared to the six-month industry average, and launches around 10,000 new designs each year.

1763 stores , 78 countries worldwide. Zara’s mission is to provide fast and affordable

fashionable items. Zara welcomes shoppers in 86 countries to its

network of 1.763 stores in upscale locations in the world's largest cities.

Zara's approach to design is closely linked to their customers.

Foretelling of FashionThey do Extensive Market

Research.

Bring Frequent new Styles.

To Improve Products and reduce errors, They keep Product life short.

Continuous Customer Feedback.

Production Planning Have a Centralized Design and

Production Centre. Produces only small Quantity of

each collection and is willing to experience occasional shortages to preserve an image of exclusivity.

Factories operate on a single-shift mentality, and can change quickly according to unforeseen demands

Have a constant flow of data throughout the supply chain

Procurement Separate Procurement Staff for each

Clothing line. It stores half of production in House. Zara sources fabric, other inputs and

finished products from external suppliers

Uncomplicated items are outsourced to China

It also owned 20 other factories for internal manufacturing .

Market- Logistics Decisions1. How Should we handle Orders (Order Processing) ?

Online Store deliveries take 2 to 3 working

days, standard deliveries, 2 to 3 working days and express deliveries, between 1 and 2 working days.

Delivers to the address of costumer or to the nearest ZARA Store.

Only delivers in UK Mainland.

2. Where should we locate our Stock (Warehousing) ? Zara's warehouse is 5 million square feet . “High-velocity” shipping. Merchandise is selected, sorted, and routed to

the “lungs” of the warehouse. Merchandise is delivered, Retailers hold

products in local distribution centers or in retail store stockrooms

Electronically linked store to the company’s headquarters

Focus on : speed and flexibility.

3. How much stock should we hold (Inventory) ? Zara is fully aware of the saying, “inventory =

death”. It avoids piling up inventory in any part of its

supply chain from raw materials to finished products.

Inventory optimization models are put in place to help the company to determine the quantity that should be delivered to every single one of its retail stores.

The stock delivered is strictly limited, ensuring that each store only receives just want they need.

Focus on reducing response time. Launched approximately 11,000 new items per

year, compared to 2,000 - 4,000 for H&M and Gap .

The batch is small, so there’s not a ton of unsold inventory to get rid of.

4. How should we ship goods (Transportation) ?

Route and schedule optimization. Effective and efficient transportation

network. Queue management systems for

turnaround and waiting period of the ships at the docks.

Air Travel (Main Costs) – Optimize routs to minimize cost and travel time.

Coordinates with all aspects of logistics

Inventory Management. Ability to distribute merchandise

within 2 weeks.

Company’s Success

1. Design and Production.

It lies within Four key strategic elements :

2. Logistics

3. Customers 4. Stores

Zara Stores World Wide By Region.

By Number of Stores.

Online Presence: YouTube :https://www.youtube.com/user/zara

Facebook : https://www.facebook.com/Zara

ZARA’S WEBSITEhttp://www.zara.com/

Features of Website :1.Products are categorically

divided for: 1. Men 2. Women 3. Kids2. Kids category is further divided further for kids of different ages.3. Variety of Products.4. Special TRF category.

Questions :1. Would Zara's model work for other retailers? Why or Why not?No, Zara’s model work will not work for other retailers because :1. More distinctive compared to others2. They keep small of clothes 3. Factory based in Europe4. Not waiting for new inventory5. Distribution cost is less6. Creates value to customer -new clothes -pricing according to location7. Competitive advantage is products being "fresh"

2. How is Zara going to expand successfully all over the world with the same level of speed and instant fashion?1. Zara would have to get the best designers to work for them to spread all over the world.2. They ship fast, they sell to the consumer style demands.3. Zara employees help forecast fashion trends instantly giving Zara a competitive advantage in speed. 4. Create production and distribution hubs in strategic regions to serve the stores or outlets in neighboring countries. Production and distribution shall be done in each hub.5. Outsource the distribution for fast delivery of stocks to stores in other countries, but retain their production center in Spain, and strengthening the communication facilities

DISCLAIMER:Created by Sudhanshu Jaiswal, IIITD & M Kancheepuram, during a marketing internship by Prof. Sameer Mathur, IIM Lucknow