Thetheoreticalscopeofthisliteraturereviewisdistributedbypurchasingstrategyandbysupplychainstrategyprospective.ThispartoftheliteratureisfoundedontheInternetandfromthearticlesintheBurchInternationalUniversitylibrary.Throughsearchingfortheadequateinformation’s,definitions,articles,journalsetc;researchwasbeingexecutedwiththekeywordssuchaspurchasingstrategyorsupplychainstrategyormanagementorjustZarasupplychainmanagement.Therearedifferentdata’s,articlesandwebsitesthatwerefundedbytheInternetabouttheZara,andalloffersdifferentideasoftheresearchdirection.InordertocollectlotofusefulandaccuratematerialofZara,IobtainfromfriendwhoworksasasellermanagerinAzelstore.
AZarasupplychainstrategywasthekeytermofmyresearchandwasanimportantpartofmytheoreticalfocusonsupplychainstrategy.TheaimofthisresearchistogiveaclearpictureofthetheoreticalresearchandtobeabletomanageanalysisoftheZaracasestudyshowinghowcompanypurchaseandwhichsupplychainstrategyperspectiveisthemostconvenientforsuchacompany.ThepurposeofuseofreviewinthisresearchisbasedontheexplainingandverifyingtheroleandimpactofpurchasingandsupplychainstrategyoftheZaraindustryandhowit’smakingsuccessful.Theeffectsofsupplyareparticularlyfundamentalinfashionindustriesofmarketingresearch.Althoughthroughthisreviewalsoitwillbedescribeddifferentaspectsofsupplychainpointsinthefastfashionindustry.
INTRODUCTION
Thisreviewhoweverwillbebasedonthetwosections;describingandanalyzingthestructureoftheZara’sstoresandonunderstandingtheinfluenceofpurchasingofsupplychainstrategies.ThemanufacturingZARAclothingcompanyhasanexcellentdevelopmentofsupplychain,practicalandinnovativedistributionchannelprocesses.
Briefdescriptionofsupplychainmanagement
Zara
Zaraisoneoftheperfectexamplesoffastfashionindustry.Therearesixmothstimeofwaitingfortrainingproductionsupplier,whileforthefastfashionindustryittakesonlyfourtoeightweeksthathavemuchfasterspeedofsupplychainproductions.However,Zaracontroltodropnewlinesintoitsstoresfloortwiceinaweek.
InordertogettheirsupplychainintegrationZaraoperateswithdecentlevelofsharingdataandintegrationbetweenretailers,manufacturerandthirdpartyresearchersasessentials.InadditionZaraisabletoacceptcostsourceofthecustomerquickly,havecloseenoughmanufacturingsothatfasttrendyreplacementcanbecompeted,highertoolsoftechnologywhichmeansfastermarketsamplingtestprovidetheopportunitiestogatherandanalyzemarketresponsefromnewproductsforthesuppliersandofcourseincludetheonlineretailingtoprovidequickercustomerfeedbacksonbothproductssatisfactionandcustomerbehaviorpreferenceswhichneedstoensurethatZarasalesoperationsarerunningsuccessfully.Allthesecharacteristicsmeansthattheinformation’ssharingcanhelpsothatsupplychainmovefaster.
InthecaseofZarathetimeisoneoftheprimarydriverstoreachthecompetitiveadvantage,whereanagileofsupplychainmanagementiscreated.Zaraisbeingfocusedontheflexibilityandmarketsensitive,untiltocomparisonsoftheordinalmethodofbeingforecastdriven.
PresenceoftheZARAinthefashionworldhaspressurizedcompetitorsofenteringtheirsupplychainstokeepthetrackwithZara;thereforeitdoesrecognizetheimportanceforthequickresponse.WithquickresponsesystemZaraisabletoresponditscustomer’swantsbetterthanitscompetitors.ZARAindustryisfocusedontheultimateconsumerwithallocatingahugeemphasisonimplementationofbackwardverticalintegrationtoperformthestrategyintoafashionfollower,beforethantoaccomplishproductionefficiencies.Zara’sacceptsaquickresponsestrategycommunicationthatiseffectiveexpectedtoitsmanagementandcollectiveculture.Thecontinuousprocessesofinformationbetweenmanagersprovidethecompanytokeepitscustomerssatisfied,whichinturnresultsinraisingthesales.
Furthermore,Zara’scentralizedissuingofferthechainacompetitiveprogressbydecreasingthelead-timeoftheirgoods.Reducingthetimetoincreasethedeliveryspeedtransportationisscheduledbytimezonesandit’sloadedbywayofairandplaceofland.TheadvantagesofZARAdeliverytimeoutsidetheEuropeisaroundoneortotwodayapproximately.BasedonZara’sstrategycenteredonfeweradvertisingcostisoneanotheradvantagesoveritscompetitors.Investmentsadvertisingcutsminimizeatotalexpensethatmakestheinternationalexpansionmoreprofitable.Accordingtothiscompanyreliesmostlyonitsstorestoprojecttheirimage,soitisclearwhyZaraisfamiliarforitsessentialrealestatelocations.
Nowadayspeopleallaroundtheworldhavefarhigheraccessinworldfashionbecauseastheresultofthee-commerceandinternet.CompanyofZararecognizethisanduseittotheiradvantagesbyofferingthelatestclothingtrendstotheircustomers.However,Zarahasasuccessfullydevelopedbusinessmodelwhichdistinguishesitselffromitscompetitors,(H&,M,Benettonetc.)butitalsohasdisadvantagesthatcanhaveinfluenceonitssustainablegrowth.ThereforetherearesomeweaknessesthatstrategyofZaracreates.Furthermore,verticalintegrationisconsideredbymanyauthorsasastrategywhichpotentiallyraisesprofitsanddecreaserisks,wherethedefectsarestillequallyconsiderabletorecognize.Thus,verticalintegrationoftenbringstotheinefficiencytoacquireeconomiesofscale.Reflexiveintroductionandfocusonspeedofnewproductsincursincreasecostsaswell.Hencetheyhavegreaterresearchanddevelopmentcosts.Alsotheyhaveincreasedcostsduetotheconstanttransformationofproductiontechniquestomakeouttheirdifferentclothinglines.
Ingeneraltoday’shighlycompetitivefashionandapparelmarketplacewherequickchangingoffashiontrendsforcesthefashionindustriestomakeresponsivenesstothemarketneedasmuchaspossible.Supplychainstrategyisaprimaryperformancedriverforthesecompaniestoattainthecompetitiveadvantageinthemarketplace.PurchasingandsupplychainmanagementoperateswiththenutsandboltsinZaraindustry.Implementingpurchasingandsupplystrategiescanhelpinsavingthecostsandinoptimizingthewaysinwhichcompaniesintegratesuppliers,manufacturingandtransportation.
Inadditiontothistheyusedtoincreaseresponsetimeinmarketoverleadtimereductions,provideavailabilityandflexibilityofsupplyinresponsetocustomerdesires,andconnectsupplychainstrategywithe-commerceinordertoaccomplishefficiencyandprofitability.Theimportanceofimprovingtheefficientcustomerandquickresponseisverticalinformationintegrationandadjustmentsoverthesupplychainwithinformationandcommunicationtechnology.Withinthefactthatitcancontroltheentiresupplychaincloselytothebetterend,whichgivesopportunitytothecompanytobeinpositiontoproducethemosttrendyfashionstylesroughlyinrealtimetorespondinthefastchangingcustomerstastes.Moreaccuratemarketinformationandupdatedataarealwaysneededtoavoidunsoldinventoryandmarkdowncostasfashionandcustomproductsarewithvolatiledemandandhighlyunpredictable.Aneffectivewayofaligningrightsupplychainstrategyistomatchproductuncertainty.Postponementstrategycanconsiderablyreduceinaccurateforecastriskanddoaresponsivesupplychainstrategy.
Zarahasaccomplishedthebenefitsofagileandflexiblesupplychainsforitsinnovativefashionitems.Although,Zaraovercomeitscompetitorstoday’sintermsofprofitmargins,withoutanystockoutrateskeepingtheindustryleaderinthemarket.Asaresultthepurchasingandsupplychainstrategyhasamajorroleinthistypeofthecompany.ThesuccessofZaraisthatithasattachtheproblemofthehighlyconsumablefashionitemsincontrollingandstreamliningtheirsupplychainssothattheyiscapabletogreatlydecreasetheirleadtimeandthustorespondfasterenoughontheveryfastchangesinthefashioncustomerneedsandwantsinrealtimeminimizingthefashionrisks.Zara’sexcellentresponsivenesstonewfashiontrendsdefinitelyneedstotheiroptimalsupplychainstrategy.