Business performance improvement: The Zara process

Résumé du document

Nowadays, taking all brands into account, the INDITEX parent company accounts for more than 2 900 shops in 62 countries and 58 000 employees all over the world. In the same way, the number of ZARA shops is about 930 all over the world out of which 91 are in France. In 2005, its turnover was 6 741 million Euros, that is to say a growth of 21%. And it was multiplied by 2 in the next four years. 57% of the turnover is made outside Spain. One of the big differentiations between ZARA and all their competitors is that the company designed all its products itself. The company has a clear advantage with the "low" cost and the quality of the products. ZARA‘s strategy required generation of great deal of products variety and a strong influence of the fashion world.

Extraits

[...] “Compared to similar companies in the industry, shipments at ZARA are almost flawless accurate with less than of shrinkage”. The strengths For ZARA, speed is a permanent concern and reactivity is one of the key of its success and its competitive advantage. In the distribution stage, “distance is not measured in kilometres, but in time”. In order to deliver its goods on time, the firm relies on several means and strategies. Retailing Usually, stores place their orders and receive shipments twice per week. In this market, the orders have pre-designated time: the orders depend of geographical zone. [...]

[...] They wait until the start of the season before taking more commitments. During the season, ZARA produces 40% to 50% of anticipated sales whereas the competitors produce to a maximum of 20%. As a result, the ZARA supply chain has to be able to react faster but works with more precise forecasts and more reliable market information. The items, which stay more than 2 or 3 weeks in the stores, are taken out of the stores and sent to the other stores in this same country or sent back to Spain. [...]

[...] This department focuses on the demand of customers. On the other hand, when the design fashion is established, the designer can start to work. At first, the designers draw out design sketches by hand and meet their staff to judge if the ideas are right. The sketches are sent to the CAD system where changes and adjustments are made. This step is about the choice of the weaves, textures and colours. This part of process is the most important because thanks to it all the system of production can start. [...]

[...] Another clear advantage is that the most of the ZARA suppliers are in Spain and in Portugal. This proximity allows the quickly response to ZARA's orders. ZARA produces products from Asia; they have a clear advantage about the cost. All the decisions are made with carefully and great attention, if they don't have cost effectiveness, delivery terms or any clear advantage from ZARA's factories they will look for other factories. ZARA works with Fibracolor to facilitate quick changes in printing and dyeing. [...]

[...] Presentation of the ZARA process: the D-15 model Diagram of the D-15 model: the ZARA process is near to the Six Sigma Days The commercial team of ZARA is consisting of designers, market specialists, and buyers. All the teams are in constant contact. An efficient communication in this kind of environment is very important. They discuss sales, orders, news lines and other matters. Creation and design On one hand, the creation process is consisting of a bench cellule where the fashion clothes are detected. Employees observe the general environment of fashion world. Design inspiration comes from many different sources like trade fairs, discotheque, catwalks, magazine and also the influence of the world. [...]