STICK TO A RHYTHM

• Zara designs and distributes all its products,

outsource a smaller portion of its manufacturing.
• They own all its retail shops
• They are directly in contact with their Customers
• The entire supply chain moves fast but
predictable rhythm is maintained ( toyota’s “takt time” )
• Zara avoids usual problem of rushing through
one step & waiting to take the next.
• The precise rhythm begins in the retail shop:
– The orders are placed twice a week, in Spain and
Southeast Europe , by store managers ; 3:00pm
Wednesday & 6:00pm Saturday
– Rest of the world places order by 3:00pm
Tuesday & 6:00pm Friday
– These deadlines are strictly enforced
– If the store misses deadline of Wednesday, it has
to wait until Saturday.
• Order fulfillment follows the same strict rhythm
– A central warehouse in La Coruna (Spain) prepare the
shipment for every store, usually over night.

• Distribution rhythm:
– Loaded onto a trucks, the boxes and racks are
either rushed to a nearby airport or routed
directly to the European store.
• Retial store : Eur
24 Hours
●

ope
– All the items have already been
pre-priced and tagged, and US
48 Hours
●

most are shipped hung up on A

racks, store managers can put
them on display the moment Jap
72 Hours
●

they're delivered, without an

having to iron them
– Shipments are 98.9% accurate
– Regular customer know
exactly when the new deliveries
come, they visit the store more
frequently on those days.
– Daily decisions by managers
ensure that nothing hinders the
responsiveness of the total
system.
– It reinforces the production of garments in
small batches.
– It validates the company policy of delivering
two shipments every week
– It justifies transporting products by air and
truck.
– It provides a rationale for shipping some
garments on hangers.
 LEVERAGE YOUR ASSETS

• In a volatile market where

product life cycles are Simpler products
outsourced
short, it's better to own (sweaters)
fewer assets, but Zara's
managers reason that
investment in capital
assets can actually Complex Products in-
increase the organization's house (Women’s
suits)
overall flexibility.
• Owning production assets gives Zara a level of
control over schedules and capacities.
• Zara operates many of its factories for only a
“single shift”.
• They use sophisticated Just In Time systems 
customize its processes & exploit innovations
• Uses “Postponement” to gain more speed and
flexibility. ( Purchasing above 50% fabric un
dyed so that it can react faster to midseason
color changes.
For Fast Response Have Extra Capacity at Hand

By tolerating lower
Zara has dramatically
capacity utilization in
reduced its need for
its factories and
working capital.
distribution centres,
Because the company
Zara can react to peak
can sell its products just
or unexpected
a few days after they're
demands faster than
made, it can operate
its rivals.
with negative working
capital.
 Reinforcing principles

• Perhaps the deepest secret of

Zara's success is its ability to sustain
an environment that optimizes the
entire supply chain rather than
each step. Few managers can
imagine sending a halt-empty truck
across Europe, paying for airfreight
twice a week to ship coats on
hangers to Japan, or running
factories for only one shift.
.. as capacity utilization
begins to increase from
low levels, waiting times
increase gradually. But at
some point, as the system
uses more of the available
capacity, waiting times
accelerate rapidly. As
demand becomes ever
more variable, this
acceleration starts at
lower and lower levels of
capacity utilization.