SEMESTER PROJECT

Submitted By-
Name ID
Tahmina Akter Trisha 2030423
Sajir Bin Zahir 2030721
Chaity Basak 2030866
Israt Jahan 2031165
Rezaul Islam 2120881

Group Name - Elite

Course Title - Introduction to Production and Operation
Management
Course Code - MGT330
Section - 05
Submitted to - Ms. Nahida Akhter Naiema
Semester - Autumn-2022
Date of Submission - 4th December, 2022

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 Letter of Transmittal
4th December 2022
Ms. Nahida Akhter Naiema
Lecturer
School of Business and Entrepreneurship
Independent University, Bangladesh
Bashundhara, Dhaka

Subject: Submission of semester project on supply chain management of Zara and Starbucks.

Sir,
With due respect, it is our pleasure and honor to be your students and have this opportunity to
present our report on supply chain management of Zara and Starbucks. The assignment has
been completed by the knowledge that we have gathered from the course Introduction to
Production and Operation Management. Yet if any shortcomings or flaws arise, it will be our
pleasure to answer any clarification and suggestion regarding this report.

Thank you for supervision and inspiration. Without your inspiration, this report would not
have been complete. Lastly, we would be thankful once again if you place your insightful
judgment on our effort.

Sincerely,
Group- Elite

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 Executive summary
ZARA means "Dress the World." More than just apparel, fashion is a way of life. We are
fashionistas. Zara is a member of the Spanish group INDITEX. ZARA has built stores all
over the world, including in Europe, America, the Middle East, and Asia Pacific. Of its more
than 5000 locations, 8 are in Hong Kong. The business draws influence from catwalks and
caters to the feckless, trendy young, one of the most dangerous segments of the garment
market. Part of Zara's success may be attributed to its management of the company from
concept to hanger. The chain creates all of its own clothing, produces the majority of them in
Spain, and handles all of its own distribution. Three weeks is all it takes for a Zara design to
sell.
Starbucks Corporation is a multinational coffee company and network of Italian-style cafés
with around 20,000 retail outlets in sixty countries, headquartered in Seattle, Washington
(USA). Starbucks purchases and prepares quality whole bean espressos and sells them, along
with crisp, rich-fermented espressos, style coffee drinks, frozen mixed refreshments, a
selection of premium teas, and refreshment-related accessories and equipment, mostly
through company-operated retail stores. Additionally, Starbucks develops and markets a
variety of ready-to-drink beverages and licenses the use of its brand through a variety of
channels, including approved retail locations and specific of its licensees and value investors.
Outsourcing transportation, coordination, and contract creation strategies resulted in expenses
for the stock system that ranged between 65 and 70 percent of total expenditures.

Table of Contents
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Zara.................................................................................................................................................
Introduction....................................................................................................................................
Analysis & Findings.......................................................................................................................
Conclusion......................................................................................................................................
References.......................................................................................................................................
Starbucks......................................................................................................................................
Introduction..................................................................................................................................
Analysis & Findings.....................................................................................................................
Conclusion....................................................................................................................................
References.....................................................................................................................................

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 Zara
Introduction

A Spanish multinational chain of clothes stores is called ZARA. It focuses in quick fashion
and provides apparel, footwear, accessories, cosmetics, and fragrances. The headquarters are
located in Arteixo, A Corua, Galicia. The Inditex group's largest constituent firm is this one.
Girl's name Zara means "radiance." Although the name Zara has several antecedents, its most
notable one is that it is a spelling variation of Zahrah, an Arabic name that means "blooming
flower." Zara's success depends on its capacity for swift adaptation. Contrary to many fashion
companies, whose designs are fixed for the season, Zara regularly monitors its environment
and changes its designs in a couple of weeks. While the trend is still current, the business
creates fresh looks and releases them to stores.
Traditional fashion purchasing in the apparel industry is governed by a fixed schedule of
trade fairs, fashion shows, fabric events, etc., arranged around a 2-season approach to product
ranges for Spring-Summer and Fall-Winter. Based on past sales data, product range planning,
which is forecast-driven and starts up to a year before the selling season, is done. The typical
product development/design cycle and lengthy lead times are a burden on the production
process. Traditional fashion merchants may offer a restricted range of products, but they can
take advantage of scale advantages in product manufacturing and raw material sourcing. A
regular calendar of trade fairs, fashion shows, etc. guides traditional fashion purchasing in the
garment sector.
The qualitative research approach was chosen because it can be used to the study problem in
this work in a real-world managerial setting more successfully. Case study research strategy,
a qualitative research technique, is particularly well suited to obscure, however, fashion
companies have been forced to abandon the scheduled seasonal product and embrace creating
smaller collections more frequently due to the diversity of consumer lifestyles and resulting
expectations for innovation and uniqueness. As a result, product life cycles have gotten
shorter, product variety has grown significantly, and demand forecasting has gotten less
precise. It may be claimed that companies that continue to launch anticipated seasonal
products in the conventional manner would pay significant market mediation costs, which
would have a detrimental impact on their profit margins.
Fields of research that are understudied and involve relatively recent events for which there is
no known theory or for which the theory in use does not seem to be adequate. Real-case
phenomena accurately depict the reality of a particular situation in order to gain a deeper
comprehension of the phenomenon and a better understanding of "how" and "why." Studying
organizational processes, problem-solving, and processes in general can be done using the
case research technique. The design for this study was a single-unit, single-case approach.

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 Analysis & Findings

Zara's all-encompassing strategy has considerably increased its ability to compete in the
rapidly evolving fashion apparel market. Customer satisfaction is met, and supply chain
performance goals are met as well.
Since the research problem addressed in this study can be more successfully handled in the
real-world managerial context, the qualitative research approach has been adopted. A single
unit, single-case design was employed in this study. The analysis of various published case
studies, essays, and theses, blogs, online news articles, company annual reports (2014–2017),
and the corporate website were the main data sources used to undertake this in-depth study of
one single example involving Inditex-Zara.
In 1975, Ignacio Amancio Ortega established Inditex in Galicia, Spain. Inditex's net revenues
at year's end 2016 were 23.311 billion euros, and its stock market capitalization was 95.167
billion euros. Zara, a fast fashion store, has a presence in 94 markets worldwide.
Only 15–39% of a season's line is committed to manufacturing by Zara six months in
advance. Compared to H&M, which has a 70% product assortment, it has 40% of the basic
category apparel products. Compared to the 17–20% industry average, 10% of Zara's
inventory is unsold each year.
The "offer" and "order" processes for Zara's items are produced, distributed, and carried out.
The design team sends production companies purchase information via a commercial at the
start of each season. Applications created by Zara's IT division are used to set up the
distribution of "offer" from the corporate office to retailers all over the world.
It is their duty to balance the demand for finished clothing in stores with the supply of
clothing coming from factories. They utilize two different forms of data: the overall amount
of inventory in the distribution center and the combined orders from shops.
Zara's new allocation procedure allowed it to ship particular sizes solely to locations where
they are likely to produce sales while allocating inventory where it was most needed. The
overall rise in sales was between 3 and 4%. Only when all of a product's sizes were available,
did Zara put products on display.
Zara’s Internalized Design Phase: The design center for Zara consists of large halls with
separate sections for men's, women's, and kids' apparel. Each clothing brand is operationally
separate since it has its own design, sales, purchasing, and production planning teams.
Although operating three channels costs more, the information flow for each channel is swift,
direct, and precise, greatly enhancing the responsiveness of the supply chain. The lack of
effective communication between the designer team and other supply chain participants
usually causes range planning for new collections to be delayed. They can be put near
together, allowing for excellent coordination and cross-functionality, to alleviate this

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problem. Process mapping and common frameworks can be used by the group and easily
distributed throughout the supply chain.
Design Development Process for New Products: Sales associates and department
supervisors at Zara stores pay attention to customer input on various product lines, top sellers,
and usage habits. Using specialized mobile computers, store managers may share market
data, such as sales trends split down by style, color, and size. Since they can evaluate
quantitative data and qualitative information supplied during phone conversations and
meetings to determine preferences and customer habits, each commercial-sales specialist has
a regional understanding.
Material Procurement: Zara carefully calculates the required amount of materials using
targeted quantities of combined apparel items from the fashion sector. By ordering fabric in
advance, it is possible to separate the production of clothing from the longer lead time of
fabric manufacture. Fabrics are sent to the distribution center right after an order is placed,
which takes 5 days. Comditel dyes, prints, and finishes the gray fabric and cloth used by all
of Inditex's brand.
Production Operations: Internal Manufacturing and Outsourcing: Zara's vertically
integrated production methods enable them to introduce new products to their stores in as
little as 15 days, as opposed to the customary 6 months required by premium brands. Zara can
rapidly and easily change the manufacturing volume of specific outfits because it normally
only uses a few of its plants for a single shift. Internal production is handled by 11 wholly
owned facilities, most of which are close to the Zara corporate headquarters in Arteixo,
Northern Spain. Averaging 8 euros per hour, Zara compensates its roughly 3,000 workers
who work in several factories throughout Spain. Additionally, Zara contracts with original
design manufacturers (ODM providers) in adjacent countries including Turkey, Morocco, and
Portugal, to produce its fashion-related goods.
Logistics and Distribution Operations: Inditex-Zara runs ten logistics centers in Spain,
each of which is connected to the corporate office of one of its eight brands. Zara's clothing
products are handled in a distribution center in Arteixo, A Corua, and Spain. Every Inditex
product is delivered to the specified distribution hubs for each brand in Spain, regardless of
where it is trying to reach them from or where it originates. Only the specific items required
by the retailers at the right moment are to be produced and distributed. Shipping of garments
in the precise sizes and patterns demanded by retail stores is organized within eight hours
after an order.
Northeast of Madrid in Central Spain, in Zaragoza, is where Zara's logistics center is located.
The most sophisticated and contemporary automated systems keep track of the locations of
each SKU inside the distribution facility. 65% of the products that Zara ships are folded,
compared to 35% that are shipped hanged. Because they take up more room than folded
clothing, hung apparel is more expensive to ship. The shipments are 98.9% accurate with less
than 0.5% distortion, therefore monitoring is not as necessary at this time.

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Retailing Business: Zara retains total control over its retail network by owning the majority
of its stores and using forward integration. Zara aspires to build a personal connection with its
clients as the last link in the supply chain. A centralized point-of-sale system is being put up,
and it will be able to track sales data and provide exact information on customer demand.
Inditex is able to manage its inventory through the POS terminals that are installed in each
store. Because they have access to real-time inventory statistics, they can quickly transition to
upstream processes like design, sourcing, production, and distribution. Since Zara has
developed control over its inventory, variations in customer demand have had less of an
impact thanks to information flow.

Conclusion
The following findings can be reached by using the 3A3S model to analyze Starbucks' supply
chain management: First off, a great firm should make prompt changes rather than sticking to
the original supply chain when the market or strategy alter. Second, an organization must
shift from the production link to the design link, or the demand link, i.e., brand marketing,
and the service link if it wants to advance up the value chain. Third, the capacity to spot
trends and the flexibility to alter the supply network are two essential skills for creating a
robust supply chain. Fourth, in order to create synergies, all producers in the supply chain
must cooperate.
Outstanding supply chain management can make the supply chain operate at its peak
efficiency at the lowest possible cost, make the supply chain from procurement to satisfy the
final customer of all process is including workflow, physical flow, cash flow, and information
flow, can operate effectively, put the right products at a competitive price, timely, and
precisely deliver to consumers.
Displays, and interior of every one of its locations worldwide to maintain a unified brand
image. Because it gives customers a sense of luxury, they invest the most money in
refurbishing and designing the interiors of their retail sites. They rely primarily on word-of-
mouth advertising and invest significantly more in opening new locations than they do in
advertising. Inditex has taken steps to make it easier for customers to buy, exchange, and
return items. They successfully integrated the technology that provides unique product
identification, RFID. Up until the time of sale, products can be tracked throughout their
whole logistical system. As a result, more of anything can be stored after it sells out. Zara has
also used digital tags to help sales representatives propose products to customers. An
interactive dressing room was also built. It was largely designed to reduce the amount of time
customers had to wait while salespeople brought the desired size, color, or style. With the use
of this technology, customers can buy in-store collections and make cash payments even if
they have credit cards. A mobile payments platform was launched by Inditex that unites
customers of all of its brands, including Zara. Customers can link their bank accounts with
both online and physical purchases using the technology.

Integration of Inditex Zara's operations: The flow of products and information as well as
the integrated operational phases are both successful at Inditex-Zara. Instead of using
forecast-driven production, Zara uses order-driven production from a semi-finished
inventory. Process homogeneity in fabric design and procurement has made it practicable.
Order fulfillment and product development lead times were both slashed. Costs have greatly
decreased

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 Starbucks
Introduction

Starbucks first opened its doors in Seattle's Pike Place Market in 1971. Ten years later,
Howard Schultz, a young New Yorker, would fall in love with Starbucks coffee after taking
his first drink. We began our next journey as a coffeehouse in 1987 after exchanging our
aprons for green ones. Our name was derived from the well-known story "Moby-Dick,"
which evokes the maritime heritage of the early coffee dealers. By 1996, we would cross the
Pacific to establish our first location in Japan, with our next locations coming online in 1998
in Europe and 1999 in China. We now serve millions of clients every week and are a part of
tens of thousands of communities throughout the globe. Inspiring and nourishing the human
spirit one person, one cup, and one neighborhood at a time is our mission.
The term "supply chain" describes the functional network chain structure that encircles the
central business. It joins together suppliers, producers, distributors, and end consumers into a
cohesive whole. Green supply chain management can reduce the supply chain's overall use of
resources and harmful effects on the environment. It can also successfully address consumer
demand for eco-friendly consumption, boosting the industry's competitiveness.

Analysis & Findings

In order to examine the Starbucks supply chain's current state utilizing the 3A3S model, this
paper employs the research strategy of case analysis. It is a specific analysis of a particular
organization, which has numerous unknowns and uncontrollable circumstances, making it
impossible to conduct perfectly precise mathematical relationship statistics. The purpose of
this report is to examine the specific metrics of contemporary enterprise supply chain
management and research best practices.
Short-term supply and demand shifts can be promptly and effectively managed, as can
outside disturbances. Enhancing communication between suppliers and customers. Forming
relationships with suppliers. A method for planning for delays. Building inventory buffers
through the storage of reasonably priced key components and the use of a reliable
transportation system or partner. Establishing an emergency plan and assembling a crisis
management team. Putting together a 3S supply chain. The supply chain network should be
modified based on strategy, product, and technology. Supply chain architecture should be
modified in response to market structural changes. Monitoring the development of the global
economy and investigating new markets and supply chains. Employing intermediaries to
develop new suppliers and logistical systems. Evaluating end-user requirements rather of
focusing only on those of direct clients. Concentrating on goals that will increase return. Free
knowledge and data exchange with clients and suppliers. Establishing clear roles,
responsibilities, and tasks with suppliers and customers. Equitably allocating the risk, cost,

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and reward as we advance. Building modifications have an impact on the production process
and distribution channels.
In this study, two papers are most frequently mentioned. Research on the Retail Enterprise
Performance Evaluation Index System and the 3A Supply Chain: The Transformation of
Commercial Enterprises from a 3A Supply Chain Perspective compiles and analyzes each
article's points of view before criticizing the shortcomings of each one.
Gordon Bock, Jeff Seeger, and Jerry Baldwin founded the Seattle, Washington-based
Starbucks coffee franchise in 1971. When Howard Schultz bought Starbucks in 1987, it was
transformed into an Italian coffee shop. In 1998, Starbucks first entered China. In 1992,
NASDAQ, known as the cradle of American high-tech companies, successfully went public.
In its more than 32,000 locations worldwide, Starbucks sells a range of espresso drinks, hot
and cold coffee beverages, pastries, coffee machines, and coffee mugs. Starbucks' agility can
be seen in the following four areas: Follow-up in real-time comes first. Delivery of meals is
the second. Inventory management mode is the third. The fourth is customer input and
demand through actions like surveys, drinks, and other things.
Howard Schultz, CEO of Starbucks: Starbucks places a strong focus on working closely with
suppliers and sharing information, which reflects the alignment of its supply chain. Starbucks
places a high value on goodwill collaboration with upstream suppliers and has set up a
comprehensive evaluation system and database that can properly assess each supplier.
Starbucks chooses its suppliers at the point of sale, which lowers the cost of procurement and
increases its reputation. According to various local cultures in China, they will create goods
with regional peculiarities, like Starbucks' zodiac cup. In order for the stores to better fit with
the community's culture and business community, it will revamp those using images of the
establishments and their surroundings.
Starbucks will put its attention on the Liberty Cafe division. Starbucks CEO Kevin Johnson
claimed that by outsourcing product sales to Nestle, the original brand company's
manufacture was being replaced. Through Nestle's influence and reputation, the Global
Coffee Alliance will offer the Starbucks experience to millions more families worldwide.
The world's 21,300 Starbucks locations, which are dispersed over North and South America,
Europe, the Middle East, and the Pacific, as of December 14 totaled. In 150 cities in China, it
has 3,600 stores. To suit the demands of some customers, it bought the French Bread brand in
2012.
Starbucks will broaden the range of its products beyond single-serve raw coffee beans to
include catering products such bagged coffee, tea, alcoholic beverages, cakes, and bread.
Inventory production guidelines are followed when conducting supply chain management.
Online orders, single-store direct sales, supermarket retail, and now the development of
takeout business with Alibaba.

Conclusion
The following findings can be reached by using the 3A3S model to analyze Starbucks' supply
chain management: First off, a great firm should make prompt changes rather than sticking to

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the original supply chain when the market or strategy alter. Second, an organization must
shift from the production link to the design link, or the demand link, i.e., brand marketing,
and the service link if it wants to advance up the value chain. Third, the capacity to spot
trends and the flexibility to alter the supply network are two essential skills for creating a
robust supply chain. Fourth, in order to create synergies, all producers in the supply chain
must cooperate.
Outstanding supply chain management can make the supply chain operate at its peak
efficiency at the lowest possible cost, make the supply chain from procurement to satisfy the
final customer of all process is including workflow, physical flow, cash flow, and information
flow, can operate effectively, put the right products at a competitive price, timely, and
precisely deliver to consumers.

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 References

Zara;

https://www.researchgate.net/publication/
324702528_Super_Responsive_Supply_Chain_The_Case_of_Spanish_Fast_Fashion_Retaile
r_Inditex-Zara?
fbclid=IwAR2IjGDJlLDK7npb3RhgozCgkYVVCLz2Wr755HJeHYGzlHcsfa2Bc-qvMPY

https://www.zara.com/ww/en/z-company-corp1391.html?v1=11112
https://en.wikipedia.org/wiki/Zara_(retailer)

Starbucks;

https://www.researchgate.net/publication/
353465567_Analysis_of_Starbucks_Supply_Chain_Status_Based_on_3A3S_Model
https://www.starbucks.com/about-us/

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