Group 6

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 Outline..

 Company Profile
 Supply Chain & It’s Partners
 Structure of ZARA’s SC Drivers
 Performance Measurement
 SWOT Analysis of ZARA’s SC
 Recommendation

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1. Company Profile..

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 Company Background..
 Founded by Amancio Ortega Gaona and Rosalia Mera at 1975

 Major selling brands of INDITEX

 Available in 86 countries with total of 1763 stores

 1st store in A Coruna, Spain

 Offers fashionable designs for men, women, and kids and also
sell accessories

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 Vision and Mission..
 Vision

 Zara is committed to satisfying the desires of our customers.

As a result we pledge to continuously innovate our business
to improve your experience. We promise to provide new
designs made from quality materials that are affordable

Mission

 Through Zara’s business model, we aim to contribute to the

sustainable development of society and that of the
environment with which we interacts

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Zara’s strategy??

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 Values..
 Fashionable, affordable clothes
 Large choice of styles
 Scarcity
 Prime locations
 Attractive prices
 Up to date design
 Creating sense of exclusivity
 Fast delivery of new products and trends

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 Business strategy??
Differentiation

 increasing the number of available styles and decreasing

qualities
 Producing low quantities cause to save in inventory cost

Cost Leadership

 Imitates the latest designs and makes similar products with

cheap materials

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2. Supply Chain & It’s Partners..

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 Supply Chain Components..
For ZARA stores to be able to offer cutting edge fashion at
affordable prices requires the firm to exert a strong influence
over almost the entire garment supply chain.
 Design
 Production
 Distribution &
 Retailing

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Competencies business strategy??
Core competencies are resources and capabilities that create
the firms competitive advantage

Core competencies of Zara

* Fast and powerful design team
* Fast fashion brand image
* Quick production process
* Frequent new products
* Low cost

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 ZARA’s Supply Chain Partners..

 Supplier
 Factory
 Inventory
 Transport
 Distributor
 Customer
 Shopper

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Value Chain of ZARA..

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 Conclusion..
ZARA is an example of how a firm can design and manage its
supply chain to gain competitive advantage.
The retailing success of ZARA can be partly attribute ted to its
excellent supply chain management. ZARA makes sure that each
element of the supply chain network adds value to the entire
operation. ZARA make sure that it streamline its supply chain,
removing steps that does not contribute to the achievement of the
company’s goals and developing those elements that add value.

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3. Structure of ZARA’s SC Drivers..

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 Facilities..
 Their main factory is located in a city called La coruna ,Spain. It is
the city which has the cheapest labor in the country.
 Other factories located in Europe, Asian, African countries and the
rest of the world
 It offers flexibility and agility to push new design to the final selling
point fast.
 They reach their target market by locating their own over 2000
stores in prime town-centre locations.
 Zara tends to use franchisee and joint ventures in countries

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 Inventory..
 Stores place orders twice per week and the supply of
finished goods is matched to store demand.

 Production is then increased or decreased in the flexible

production facilities.

 Demand based production means there is very little

inventory in Zara’s supply chain, which results in much
lower working capital requirements.

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 Transportation..
 Based on software designed by the company’s own teams

 Time between receiving an order at the distribution centre to the

delivery of the goods in the store is lower

 Use ships, trucks, Air cargo for transportation

 Logistics centers including the introduction of biodiesel for the

firm’s trucking fleet.

 They did not handle the raw material transportation, it is handled

by the parent company.

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 Information..
 Close relationship with customers

 Real time data update regularly to the data base

 PDA are provided to store managers

 Designers always keep in touch with the real time

information

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 Sourcing..
 50% of the production is done in Spain rather than low cost Asian
countries.

 More flexibility and control

 45% of raw material handling is manage by Comditel,100% Inditex

owned company.

 Fabric cutting is done by robots in 23 factories in Spain

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 Pricing..
 Price = Cost + Target Margin

 Offer unique clothing at affordable price

 Price are shown in different currencies in same tag

 Price of the same product can be changed according to the

characteristics of the region

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4. Performance Measurement..

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How to measure performances of SC
partners..

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Cont..

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5. SWOT Analysis of ZARA’s SC..

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 strengths weaknesses

opportunities threats

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6. Recommendation..

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Areas for improvement of ZARA

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 Group Members..
Name Index No:
J.M.W. Lanka 121437X

A. Vanniyasingam 121404U

W.M.S.B. Wanasinghe 121472A

M.D.L.B. Ariyarathne 121487A

S.D.P.P. Dissanayaka 121496B

B.M.S.M. Balasuriya 121489G

M.N. Nufail 121451J

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Thank you..

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