Zara : Apparel Manufacturing and Retail

Solution to Question

1. Zara is an apparel manufacturer that relate to the fashion domain. Zara use the strategy which is decrease the time of design the new merchandises (limit to 5-6 weeks ). Zara has ability to introduce new designs every week, thus, the apparel in its stores are fresh, therefore, its will satisfied the customers demand. Also this strategy will increase the sales volume and reduce the cost about the save the goods in warehouse.

2. Inditex choose to have both in-house and outsourced manufacturing. Firstly, Zara have 40% productivity by Inditex. The main reason not only is this strategy will insure the produced is fashion in current season, but also it has a flexible and quick supply delivery to reduce the delivery time to the Europe market. Moreover, another productivity are come to Asian and Latin American countries, because the lobar market and cost in these country are cheap than Europe even include the transport fees.

3. The local manufacturers response the new design product because it will be fast to support the Europe market. However, Asian manufacturers produce the apparel is predictable because these product has simple design and stable market that Zara never change them.

4. Because of the demand of customers, Zara change 75% goods in its stores and increase the speed to create new product. These change not only will satisfied the customers requirement, but also will decrease the circle that means the apparel will sale as soon as possible.

5. Frequency of replenishment affected Zara’s distribution since Zara’s originally had a single Distribution Center (DC) in Spain and a small satellite DC’s in Latin America but Zara is now compiled to build another DC in Spain.

6. In my opinion, Zara’s responsive replenishment infrastructure is suited for online shopping. The reason is that Zara has more DC which will support the fat delivery and help Zara organize its apparels. Also, the online sales and retail sales has low cost than vision shopping that will add more profit in Zara.

7. Firstly, as an apparel manufacturer, Zara need some customers demand information that can
help the designer to created more product to require consumers. Secondly, a effective delivery systems are significant in Zara because when the designer create a new product how to put them to market will influence Zara to be success. Moreover, Communication infrastructural required by

Zara are segregated as follows:
Zara and its customers: Since Zara deal more directly with its customers, Zara should train its sales person to be able to interact with customer to know their needs while the broad business development team should be on look out for new trend and communicate to the production (manufacturing) department.

Zara and its retail unit: Zara should maintain an open communication based on computerised infrastructure that the retail unit will use to inform the manufacturing (production) department on the inventory level versus the rate of turnover for particular designs which should be in real-time.

Zara and its suppliers: Zara should also maintain a direct communication link based on latest computer and telecommunication infrastructure with its suppliers on the speed needed for the delivery of goods.