Operations Management

Submitted by: Group 11

Shiv Shankar Srinivasan 44306 Soham Das 44318
Shreyanshi Agarwal 44309 Soni Zubin Vikas 44320
Shubhada Vyawhare 44312 Sourabh Malviya 44322
Shubham Regmi 44313 Srinath Reddy 44323
Shubham Mahindrakar 44315 Supratim Chatterjee 44326
Siddharaj Sindhav 44316 Vikaskumar Thakur 44329
Introduction
In today's environment, the majority of businesses have
realised the importance of operations. The goal of operations
management is to gain a competitive edge while also
increasing customer service. It deals with a variety of strategic
challenges, including supply chain management. It also
responds to fast expansion and changes in corporate strategy.
Zara is a well-known multinational fashion business for its
strategic approach to operations. It provides a one-of-a-kind
business concept that has expanded significantly over the
years. The goal of this paper is to give a comprehensive
overview of Zara's operational efficiency as well as a critical
examination of numerous operations, such as Competitive
advantage for Zara, Sourcing challenges and benefits, Product
and service design, Facility layout in the workshop and in the
stores, Quality management, Digitization and automation &
Inventory management.
 COMPETITIVE ADVANTAGE SOURCING CHALLENGES AND BENEFITS
FOR ZARA Zara has a vertically integrated supply chain management
system in which the majority of its production line is derived
from its own factories, resulting in 85 % of the total price of its

ANALYSIS AND DISCUSSION

The firm has a competitive advantage
in the market since it sells things with clothes, compared to the industry average of 60 %. Seasonal
designs resembling high-end fashion modifications result in 85% of capacity production. This might
and designer brands at inexpensive be one of the reasons Zara has such a high ability to respond
prices. It does this through its rapid, to sales data. All of this results in inventory optimization, just-
responsive, and competent design in-time operations, and a wider range of items.
staff, which acts as its primary
competency. However, Zara INVENTORY MANAGEMENT
distinguishes itself in the business in
ZARA has a Just-In-Time manufacturing approach, which lets them
ways that go beyond that. It believes
place orders in small quantities based on seasonal patterns. Their
in a "complete cycle of life," in which
clothing seldom lasts longer than a month on the shelf. The
it develops value for its product by
organisation gathers 12 inventory turns every year, compared to the
engaging in each level of the fashion
industry average of 3-4 per year. Zara has three important formulas
industry collaboratively and ethically.
when it comes to inventory management:
As a result, its main objective is to
1. Shorter lead times result in more fashionable apparel.
bring to market high-quality 15 goods
2. Limited Quantities: Client demand rises as a result of the limited
that are ethically made at every level,
supply.
finally matching client expectations
3. Updating Market Styles: More possibilities and a higher
in-store and online.
probability of identifying the right market.
 FACILITY LAYOUT IN THE
WORKSHOP AND IN THE STORES
Zara's office layout is an operational strategy
that guarantees the organization's success.
The structuring of production centres and
ANALYSIS AND DISCUSSION
offices is referred to as plant layout. The
overarching purpose of plant and office layout
is to improve the flow of information and
materials inside a company, thereby
increasing human capital and other resource
usage. Zara employs a plant and office layout
that allows for the open flow of information. It
reduces layers of bureaucracy between
divisions and personnel. It also guarantees
that operational procedures are efficient and
that performance methods are effective. It
also enables the inclusion of the workers in
the production processes. It ensures success
of the quick response strategy that the
company adopted. Hence, the layout of the
production facilities and the offices of Zara
has enabled the company to attain
competitive advantages over its competitors.
QUALITY MANAGEMENT
ZARA aims to achieve maximum quality at every stage of the value chain,
from design through correct raw material selection, production, and
distribution methods, all the way to the end of the product life cycle. The
Kanban system is one of the most visible Lean strategies used by ZARA. The
Kanban technique stores small quantities of critical materials and only
replaces what is utilised, preventing overproduction and overordering.
DIGITIZATION AND AUTOMATION
Zara will use digitization and big data analysis in the near future to increase
sales turnover and operate with even less working capital. Every piece of
clothing is tagged with a radiofrequency identification (RFID) microchip
before leaving a centralised warehouse, enabling real-time inventory
tracking until it is purchased by a consumer at a retail outlet. As a
consequence, information regarding each store's inventory levels, as well as
the popularity and speed with which each SKU sells, is continually updated
in the Company's central data processing centre.
To solve the issue of customers waiting in long lines, the retail store is
developing a high-tech solution for its BOPIS (Buy Online, Pick-Up in Store)
or "Click and Collect" service. Artificial Intelligence Robots will gather items
from automated retail businesses' backrooms, speeding up the in-store
collecting process.
 PRODUCT AND SERVICE DESIGN
Zara's designers create over 40,000 new designs each year, of which 10,000 are chosen for manufacturing. The
designers collaborate closely with the commercial team and shop managers from across the world to understand the
most recent customer desires and only develop what is fashionable in that season. Zara's networked business models

ANALYSIS AND DISCUSSION

enable continual digital connectivity between stores and designers, and centralized distribution enables within-15-day
delivery to ensure client satisfaction. Current customers are loyal customers who visit a Zara shop 17 times per year on
average.

Raw Material Fashion

Suppliers Garment Design Designers
Bulk Fabric
Sketches

Design Reviews and

Bulk Fabric Sales Performance
Zara Global
Orders
Distribution Center
"The Cube"
Finished Graments
Finished Garments

Garment Garment Orders,

Store Orders Cut Fabric Clothing
Managers Factories
 Conclusion
Zara is a profitable and worldwide operating business. The company's operations are flexible
due to vertical integration and operations based on in-house manufacturing divisions that
manufacture goods for national and worldwide sales. To remain competitive, the company
maintains product quality while implementing new pricing strategies and differentiating
activities. More companies and franchisees have established in recent years, and income has
risen year after year.
Zara's business is centred on pricing and fashion trends that are quite responsive. Zara's
target market is significantly larger due to its ability to accommodate customised
requirements and react to new system trends. Zara has standardised its processes and
quality control procedures, allowing it to offer the same product to several foreign locations.
Zara is a sign of a tiny company's achievement in establishing its position in the global
market. Zara's success has been attributed to the implementation of best competitive
strategies, as well as the partnership of technology, quality standards, and financial stability.
 Recommendations
1. Zara can improve its e-commerce sales by better forecasting trends in best-selling
products using artificial intelligence.
2. More factories must be established in order to reduce supply chain costs.
3. With growing e-commerce zara could focus more on marketing its online sale thereby
expanding its geography without physical retail store presence.
4. Apart from the Kanban system, Zara can adapt PDCA (plan-do-check-act) for quality
control and continuous improvement.
5. Quality of apparel can be maintained by using the latest technology along with apparel
quality control tools and Six Sigma process techniques.
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