Professional Documents
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Abhishek Saluja 18P065
Naman Laddha 18P070
Mridul Gupta 18P088
Rishab Kapur 18P101
Ritika Dhoot 18P102
Saksham Agarwal 18P106
Zara: Leader of Fast Fashion
A fast fashion system combines quick response production capabilities
with enhanced product design capabilities to both design "hot"
products that capture the latest consumer trends and exploit minimal
production lead times to match supply with uncertain demand.
Short lead times are enabled through a combination of localized
production, sophisticated information systems that facilitate frequent
inventory monitoring and replenishment, and expedited distribution
methods. For example, Zara, primarily a European retailer, produces the
majority of its designs in costly European and North African factories,
rather than outsourcing to less expensive Asian facilities, and
continuously monitors inventory levels in stores to effectively match
supply and demand
The second component (trendy product design) is made possible by
carefully monitoring consumer and industry tastes for unexpected fads
and reducing design lead times.
Enhanced design capabilities, ready design availability along with a
perceived scarcity, result in products that are of greater value to
consumers and hence elicit a greater willingness to buy.
A unique, differentiated value proposition
Zara offers a unique proposition to the customer Strategy Canvas
through value innovation
Haute Couture
Its offering is to make the customer feel fashionable High
at low price and reasonable quality
If we look at it through the 4 actions framework
Eliminate – industry barriers and old methods
such as planning fashion collections a year in Zara
advance
Reduce – Batch size, stocking cost, delivery cost
and time; outsourcing
Raise – Fresh product offerings, customers’
Traditional
needs and preferences analysis; extensive use
of information technologies.
Low
Create – Supply chain models that reduce cycle
time and inventory that is introduce “Just in
time” to fashion
Zara: Using queuing theory to keep waiting times/lead
times low
Queuing theory is used to predict the waiting times for processes
whose processing time and interarrival time are variable.
For a single server, single line model, the relationship between the
waiting time and utilization is given by:
Average time in queue=p*(u/1-u)*( Cva2 +Cvp2 /2)
Where, • CVa = Coefficient of variation
p = Average Processing time of inter arrival time
u = Utilization • CVp = Coefficient of variation
of processing time
Similarly, for a multiple servers(m), single line model, the
relationship is:
STORE
LOGISTICS
DESIGN/PRODUCTION
2000+ stores collect information regarding customer demands
New products introduced twice a week : Small batches help the
Stores company avoid the risk of oversupply and help Zara’s stores
perpetually energy their inventories.
“Meeting point between Top Locations – 17 visits/year/customer
the customer and the Zara
fashion offer” Meticulously designed shop windows
Maximum attention to interior and exterior architectural design
6
Appropriate coordination of garments
697 million garments distributed by 5000 employees at logistic centres
Designed with maximum flexibility to suit the fashion trend
Customer oriented designs
Logistics 24 hours receiving order to store delivery in Europe and 48 hours in USA
“Highly frequent and
2000+ stores around the world and huge team of employees that deliver
constant distribution
the garments on time
permitting the offer to be
constantly renewed” 3 Parallel product families – to keep the flow of information smooth
Physical and organizational proximity of 3 groups increase the speed and
7 quality of design process.
Design/ Proximity of production facilities
Immediate reaction to trends – Just in Time production and
Production Inventory that keeps Zara ahead of its competitors
Continuous work for all teams
“Inspiration comes from
the street, music, art…but 1186 suppliers, 200 designers
above all, the store” Garment production farmed out to specialist companies, which it
often supplies with its own fabrics
8
Zara: Future competition
Cline, E. L. (2012). Overdressed: The shockingly high cost of cheap fashion. Penguin .
Design 2 weeks to get a new design to hit stores and new pieces hit
stores twice a week
Innovation 10,000 new designs selected out of 40,000 per year; 300,000
SKUs (based on size and colour)
Sense of scarcity - spacious stores with only a few items are
designed to create sense of urgency, to make customer buy
Quality is governed by majorly having in house manufacturing
Process Zara needs fast information processing - Store managers
empowered with customised hand held devices that promote
Excellence weekly communication
Reduced bureaucracy in information flow; store managers to
market specialists, designers and production team.
Once design is made, production team directly send CAD specs to
machines in factory
Bar codes track pieces in production, including sub contractor
operations
Henees&Mauritz Strategy
• Around 3450 stores world wide
as designer collaboration
and Bangladesh
suppliers
GAP Strategy
• Around 2200 stores globally
as offline presence
trends
• High inventory
• Outsourced Manufacturing