Company introduction:

Zara is a Spanish clothing retailer based in Galicia, Spain. Founded by Amancio Ortega in 1975,
it is the flagship chain store of the Inditex group, the world's largest apparel retailer. Zara is
regarded as one of the main clothing and accessory retailers that is based in Spain. They are
focused mainly on new, trendy along with cutting edge fashion for both men and women.
Currently it used to operate in 88 different markets throughout the world, their main distributors
are in Madrid as well as Zaragoza.

Supply Chain Operates:

Zara is specially well known for its energy saving efforts and techniques, along with their
minimization and efficient waste management. They used environmentally friendly fabrics such
as organic cotton amongst others, in their fabric. Their textile production used to come from
Spain, the Far East, India as well as Morocco. For transportation of their products, biodiesel fuel
is used for conformance to their environmental policies. They are having a great concern for the
purpose of animal treatment and they never use animal products that come from animals that
were not treated ethically or sacrificed for the purpose of commercializing their leather, skin,
horns, feathers, etc. When other retailers uses production of third-party, Zara produces uses
almost 60% of the fabrics and uses cutting-edge technology in order to cut as well as measure the
handling of fabric which is done in a precise and effective way, thus overall waste can be
reduced.

Importance of supply chain management:

 Improved customer satisfaction: Customers expect right products delivered to
them at right time. For that to happen, an effective supply chain management is
important.
  Reduced operating costs: Proper supply chain management reduces purchasing cost
and production cost, eventually reduces the overall operating costs that helps in
making more profits.

 Improved cash flow: A properly designed and managed supply chain speed up
product flows to customers which helps in improving the cash flow.

 Better inventory management: The primary objective of supply chain

management is delivering the right product at right time to the customers. When this
happens, it eventually enables better inventory management.

 Competitive advantage in the market: When customers get the products at the

right time at their desired place, the customer satisfaction improves, which in turn
increases a customer life time value as well. That means more customers will stay and
you gain a competitive advantage in the market.

Procurement Process and Strategies:

Acquisition Methodology:  Zara's Procurement group doesn't work on the quantity of
completed garments however on the amount of crude materials expected to fabricate the
garments. This decreases squander, as you can re-use texture yet not exchange a garment that
didn't meet the desires.

Profound Collaboration: Supplier connections are vital and providers are for the most part near
Zara production lines and work together firmly, so Zara can arrange on an ordinary need
premise. 

Creation Feedback: Everyday, head supervisors give client input to the market trained
professionals, who at that point give the data to creation and configuration groups. This fast
criticism circle empowers a snappy and spry reaction to the market. 

Nearby Manufacturing: Zara presents a radically unexpected methodology in comparison to its

rivals. Rather than re-appropriating the entirety of its creation to Asia or Eastern Europe, it chose
to fabricate its items in Galicia for things with a more instable demand. While cheaper creation
could be accomplished in different locales, the quicker an ideal opportunity to advertise,
diminished transportation expenses and low introduction to changing duties and governmental
issues exceed that one factor

Save Capacity: Zara willfully keeps up to 85% of its plants inert, to streamline the reaction to
request changes all around the globe. Another intriguing methodology, very unique to contenders
that attempt to boost usage. 

Request Forecasting: Zara receives the rewards of proficient stock administration models that
assist them with deciding the specific amount of things required for each store. They transport
little bunches double seven days.

Feedback for the supply chain of ZARA:

Zara is a major corporate, with an association that is being consider as truly outstanding on the
planet, an inventory network improvement that is quick and subjective at the same time. I
imagine that is Zara can improve some connection in the corporate. Like I stated, Zara could
utilize more programming of new age, another exploration show that they work with MIT to
improve request conjecture. I profoundly prescribe Zara to go further in the profound learning
machine and the I.A to gather information and adventure them in the better manner.  In addition,
utilizing IOT could improve likewise the information assortment on the gauge yet additionally
on the store conveyance two times per week. I believe that Zara could execute associated sales
register machine. Utilizing this sort of IOT item could assist Zara with gathering information
considerably quicker than previously and continuously

Particular issues or Failures:

 Zara doesn’t rely on advertisements that can be used by their competitors to get an edge
over them. 
 If there are any logistics problems it can affect their sales drastically. 

 During the situation of a pandemic where people would avoid coming to physical stores
which would decline their sales. 

 The main distribution centre of Zara is only in Spain; it would hamper the demands of
international costumes. 

 Lack of skilled individuals for the company to expand the market. 

 Claims of imitation have hampered the reputation of the organization and also affected
the customer base.

Due to coronavirus, the sales of Zara have taken a hit; it had a quarterly loss as due to lockdown
90 % of their retail outlets were closed. The owner of Zara has decided to close about 1,200
stores across the world due to the fall in sales. They have now set up an ambitious target to
increase online sales from 14% to 25% by 2022.

Zara Success supply chain:

Zara’s success relies on keeping a significant amount of its production in-house and making sure
that its own factories reserve 85 percent of their capacity for in-season adjustments. In-house
production allows the organization to be flexible in the amount, frequency, and variety of new
products to be launched. The company often relies heavily on sophisticated fabric sourcing,
cutting, and sewing facilities nearer to its design headquarters in Spain. The wages of these
European workers are higher than those of their developing-world counterparts, but the
turnaround time is miraculous. Zara also commits six months in advance to only 15 to 25 percent
of a season’s line. And it only locks in 50 to 60 percent of its line by the start of the season,
meaning that up to 50 percent of its clothes are designed and manufactured smack in the middle
of the season.