Zara Fashion Retailer Assignment Example | Topics and Well Written Essays - 3500 words

Zara Fashion Retailer - Assignment Example The paper "Zara Fashion Retailer Assignment" analyzes the success of Zara company. Zara’s success is mainly the result of their supply chain innovation, which means that unlike their competitors who often have to forecast the season’s fashion trends, and then wait another five months to sell them, Zara can deliver new styles and fashions in three to six weeks. This supply chain innovation was essential as the industry was prone to risks in mismatches of supply and demand, and this would result in disruption, longer waiting times and smaller margins of error (Kleindorfer 2004). To negate these effects Zara produces 50% of its products in-house, instead of outsourcing all manufacturing and production related processes. This has largely been made possible by Zara’s background, as Zara started life as a manufacturer. When Zara, as a manufacturer decided to compete in the retail sector, they became a retailer with manufacturing capacity (AI 2004). Instead of getting r id of this capacity, Zara identified this as an opportunity. This capacity also means that Zara is in possession of 18 manufacturing plants that are responsible for producing their fashion garments (AI 2004). Whilst other retailers are outsourcing to Asia and the Far East, Zara has integrated their manufacturing and retail aspects to minimise the uncertainties associated with long lead times, and predicting fashion trends months in advance. By outsourcing to outside the European continent or their home countries, Zara’s competitors.'s competitors are also introducing delays and errors in their business, as incorrect fashion predictions, could result in a massive loss of profits through dozens of unsold clothing. Clothing also needs to be stored, and as their competitors store large quantities, they have to store them in warehouses which add additional costs on the organisation. The risks of storing clothes in warehouses were recently highlighted by two separate cases in the m edia. In one case, fire gutted a warehouse used to store clothing for Primark and other retailers, and in another separate case, the European Union (EU) had placed quotas on clothing coming from China, which is were most retailers had outsourced their manufacturing and production. This resulted in significant delays and costs to these organisations, as they had to rectify a situation which could have been avoided. Zara also owns its own design and distribution teams that cover all the segments of retailing, further reducing any time delays with teams located in different locations, and it also ensures that their design and distribution quality is maintained as it is operated by people who understand the strategy and principles of Zara. Zara have managed to mass produce clothing with relatively higher levels of customisation than what normal mass production techniques would allow, but this is due to their smaller stock levels and the fact that they change their style on a frequent ba sis. This supply chain innovation seeks to eradicate the expenses and losses associated with mismatching demand and supply (Kleindorfer et al 2004). The current market demands that an organisation is able to deliver the goods and/or services as and when the customer demands. It is no longer acceptable for fashion retailers to delay trends for longer periods, so that they can get rid of existing stock. The stock sold at lower prices then represents a loss, as it would have taken up storage space further impeding on capacity. Customers also like to differentiate themselves and their own