Reasons of Zaras Success Driving Essay Example | Topics and Well Written Essays - 3500 words

Reasons of Zaras Success Driving - Essay ExampleZaras success is in general the result of their supply chain innovation, which means that unlike their competitors who often have to forecast the seasons fashion trends and then wait an some other five months to sell them, Zara can deliver new styles and fashions in three to six weeks.This supply chain innovation was essential as the industry was prone to risks in mismatches of supply and demand, and this would result in disruption, longer waiting times and smaller margins of error (Kleindorfer 2004). To negate these set up Zara produces 50% of its products in-house, instead of outsourcing all manufacturing and production related processes. This has largely been made possible by Zaras background, as Zara started life as a manufacturer. When Zara, as a manufacturer decided to compete in the retail sector, they became a retailer with manufacturing susceptibility (AI 2004). Instead of getting rid of this capacity, Zara identified this a s an opportunity. This capacity also means that Zara is in possession of 18 manufacturing plants that are responsible for producing their fashion garments (AI 2004). Whilst other retailers are outsourcing to Asia and the Far East, Zara has integrated their manufacturing and retail aspects to minimise the uncertainties associated with long lead times, and predicting fashion trends months in advance. By outsourcing to right(prenominal) the European continent or their home countries, Zaras competitors are also introducing delays and errors in their business, as unreasonable fashion predictions, could result in a massive loss of profits through dozens of unsold clothing. Clothing also needs to be stored, and as their competitors store large quantities, they have to store them in warehouses which add additional costs on the organisation. The risks of storing clothes in warehouses were recently highlighted by two pick out cases in the media. In one case, fire gutted a warehouse used t o store clothing for Primark and other retailers, and in another separate case, the European Union (EU) had placed quotas on clothing coming from China, which is were approximately retailers had outsourced their manufacturing and production.