Assessment 1 (Operations Management)

Module: 5BU012 – Operations and Supply Management

Year: 2 Level: 5
Assessment Number/Sequence: Assessment
Due Date: 16th May 2021
1
Module Leader: Michael Ogunseyin Module Tutor: Jyoti Prasad Dhital
Assessment Type: Groupwork Word Count (if any):
Course Title: International Business Management at Merryland College Biratnagar,
Nepal (MCB)

Submitted to: Michael Ogunseyin, University of Wolverhampton

Submitted by:

Submission Date: 16th May 2021

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Date: 16th May 2021

Introduction
Zara is a Spanish clothing retailer
based in Galicia, Spain. Founded
by Amancio Ortega in 1975, it is
the leading outlet of the Inditex
group, the world's largest attire
vender. The fashion group also
owns brands such as Pull&Bear,
Massimo Dutti, Bershka,
Stradivarius, Oysho. The company
operates over 2,220 stores and is
present in 88 countries. Zara has
consistently acted as a pioneer in
fast fashion based in a highly
responsive supply chain.[ CITATION
Bus21 \l 1033 ]

Objective of writing about Zara is to know detail information about the organization,
to understand the 4vs within the organization. To appreciate the type of process
used in the organization. Zara is a well-known attire vender, known for producing
high quality of products including clothing, accessories, shoes, swimwear, beauty,
and perfumes. Operation management, 4vs of an organization and types of process
are been described and demonstrated.
Chapter 2: Review of Chosen Topic
Operation management refers to the management of best business practices to
maximize efficiency in the use of corporate resources. This includes proper
materials, machines, technology and work management for the manufacture of high-
quality products and services to the company. Operations managers must be able to
function effectively and productively to increase profits, which are the key
determinants of company survival, in order to succeed in an ever-changing market.
https://www.hashmicro.com/blog/operations-management/
The company must measure the operation quality of a company to determine
effective operation.

5 performance objectives

Speed Flexibility Cost Quality Dependability

1. Speed
The greatest competitive advantage is when a company can deliver a service or
product quicker than other companies without sacrificing quality. Consumers are
happier when a company delivers product or services on offered time by them.
2. Flexibility
Flexibility refers to the ability to change an operation to meet the needs of
customers. Because of their greater range, businesses that are versatile will gain a
competitive advantage. Product, mix, volume, delivery are some flexibilities that
customers want frequently.
3. Cost
Cost is the main aspect of any business organization. Minimization of costs is
equally critical in order to free up capital to invest in other areas of the market. The
lower a company's manufacturing costs are, the lower its customer-facing rates can
be.
4. Quality
Quality can lead to better facilities and goods, which can save money in the long run.
Quality is a visual measure of how well an operation is performed, and quality is
where consumers and employees base their perceptions.
5. Dependability
Customers' dependability refers to their belief in the organization's ability to deliver
goods and/or services on time. It determines whether a customer will return to make
a future purchase or will recommend your company to others.
https://www.peoplegoal.com/blog/what-are-the-five-performance-objectives

"Four V's"

Volume Variety Variation Visibility

Volume
It explains the management process of the output volume. In simple words It refers
to the amount of production required for a certain product in order to meet its overall
market demand. If large volumes are met, the uniform result with custom-designed
equipment will ultimately lead to lower unit costs.
Variety
Selling a wide range of goods or services allows businesses to expand their revenue
and profit opportunities while reducing their reliance on only one or two products. It
involves a wide range of process inputs and the additional difficulty of matching
customer demands with products or services.
Variation
It refers to how much demand fluctuates over time as a result of external factors
such as Covid-19 which threw the whole planet into disarray in all aspects of life. The
prediction of variation is known to be difficult due to various variables.
Visibility
It refers to the degree of company's operation influenced by the consumer. In simple
words, it refers to value of a company that customers need to experience. such as
the service industries have a high degree of exposure to their clients, while the
manufacturing sector has little to none.
https://www.google.com/amp/s/www.financialexpress.com/opinion/understanding-
the-four-vs-of-operations-management-volume-variety-variation-and-
visibility/2231160/lite/
Chapter 3: Application to Zara
Zara has been implementing performance objectives efficiently. The evaluation of
performance objectives in Zara is explained below.
1. Speed
Every day, the brand keeps a close eye on how fashion changes and evolves around
the world. It produces new concepts based on the latest models and patterns and
gets them into stores in a week or two. Zara also has an online presence, making it
easier for consumers to choose, order, and receive products on time.
https://martinroll.com/resources/articles/strategy/the-secret-of-zaras-success-a-
culture-of-customer-co-creation/
2. Flexibility
Zara is always on the lookout for the latest fashion trends. It has a variety of beauty
items, including lipsticks and makeup equipment. Zara has a variety of summer and
winter collections, as well as party and formal, casual and fancy. Zara is still at the
top of the list when it comes to offering consumers versatile goods.
https://www.worldfinance.com/infrastructure-investment/what-makes-zara-so-
good#:~:text=Zara%27s%20supply%20chain%20is%20responsive,and%20distribute
%20new%20designs%20constantly.
3. Cost
Zara not only limits its exposure to any specific commodity but also creates artificial
scarcity by reducing the quantity produced for a particular style. This makes an
item's price a little higher, but the item is still worth it. It also offers low-cost items by
reducing inventory and promotional costs, Zara aims to sell fancy dresses at a lower
price than other brands.
https://martinroll.com/resources/articles/strategy/the-secret-of-zaras-success-a-
culture-of-customer-co-creation
4. Quality
Zara uses high-quality fabrics in their clothing and has gained skills in areas such as
fiber coloring. Many inspection methods are used in the manufacturing process to
ensure that goods are of consistent quality. The outlets are also identical all over the
world to ensure that every customer receives the same high-quality service.
5. Dependability
Zara schedules delivery to their stores so that the most recent models can be sold as
quickly as possible. Most suppliers have Zara as their sole or main customer, which
allows them to keep track of time and synchronize the various phases of new model
growth.
https://graduateway.com/zara-operations-strategy-matrix/

"Four V's" are included in the overall development of the operation process of Zara
are:
Volume:
Since Zara introduces a new model for its apparels every two or three weeks, it
seems that the unit cost are high; however, because of low qualities of products, it is
easier for retailers to replace unsold products. On the other hand, new products
absorb more customers which increases the number of sales. Because of high rate
of production, the total volume is considered as low.
Variety:
Because of volatile demand for apparel due to the seasonal needs, Zara must
provide seasonal clothing design to fulfill its customers needs. In addition, the high
rate of new products introduction leads to high range of products diversity which
contributes to a high variety.
https://www.academia.edu/21680378/Process_and_Facility_Design_and_Improvem
ent_A_Case_Study_on_the_Lean_Production_Management_of_the_Spanish_Fashi
on_Retailer_Zara
Variation:
Zara is one of the well-known retailers in the fashion industry; therefore, it always
tries to align its objectives based on customers needs. In other words, because of
seasonal demand of apparels and because of first production of new products, it is
able to satisfy customers needs. And even tries to increase customer visits by
implementing continuous change. In this case, it can be said that the variation in
demand is high.
Visibility:
Since customers can walk around the store to find their considered product, the level
of visibility is high at Zara. This creates a high unit cost for Zara because it has to
provide large areas to show its products; however, the company needs to do since it
is a must in the apparel industry and Zara can overcome the high unit cost regarding
its efficient supply chain.

https://www.coursehero.com/file/p7rt9oo2/The-4Vs-According-to-Slack-et-al-2010-
every-operation-has-four-elements-which/
Process and layout

Zara uses plant and office layout that ensures free flow of information. The layout
design used by the company eliminates layers of bureaucracy between departments
and workers. The layout design also ensures efficient operational procedures and
effective performance mechanisms. The layout enables the inclusion of the workers
in the production processes.

It also ensures success of the quick response strategy that the company adopted.
Hence, the layout of the production facilities and the offices of Zara have enabled the
company to attain competitive advantages over its competitors.

https://ivypanda.com/essays/case-operations-at-zara/

Conclusion
References
Business of Fashion, 2021. BOf careers. [Online]
Available at: https://www.businessoffashion.com/organisations/zara
[Accessed 07 05 2021].