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Zara Company_ Zara Case Study on Zara Supply Chain

Zara Company: Zara Case Study on Zara Supply Chain

Zara Company is a Spanish apparel retailer having chain stores with a Zara mission statement. Zara was founded in the year 1975 by Amancio Ortega. Zara is the flagship chain store of the Inditex group, which is the largest apparel retailer having a Zara mission statement. It also owns brands like pull and bear, Massimo Dutti, Oysho, Zara Home, and Uterque.  Zara specializes in fast fashion and products, which include clothing, shoe, accessories, swimwear, beauty, and perfumes. Zara makes up to 20 closing collections a year. Zara Company is a Spanish clothes and accessories brand that focuses on the latest fashion and high quality yet affordable, having a Zara mission statement. Probably the amalgamation of these qualities and a Zara mission statement, Zara go-to fashion brand for all.

Zara company, started with a small store in Spain, is now the world’s largest retailer, and its founder, Amancio Ortega, is the 4th richest man in the world. Zara company started when Ortega set up a dressmaking factory, Inditex, in the year 1963. Ten years later he set up a small store named Zorba in Spain with a budget of only 30 Euros. However, after learning that there was a bar called Zorba two block away, they rearranged the letters and molded the sign to Zara. The very first Zara company store featured low price look-alike products, of similar popular high-end clothing fashion. Later, Zara company opened additional stores across Spain.

 Gradually, Zara company changed the design, manufacturing, and distribution process. It was done to reduce lead times and focuses on the new trends in a quicker way, called “instant fashions.” Zara Company included the use of improved and upgraded information technologies and also started using a group of designers instead of an individual. This resulted in the Zara company to become what it is today having a unified Zara mission statement. Zara company slowly expanded its stores form the owner of Spain to the rest of the country and then later to Portugal. By the 1990s, Zara company expanded the stores to the United States, France, and most of the countries in Europe with Zara mission statement serving the society.

The first store featured similar low-priced products of popular, higher-end clothing. Ortega opened additional stores throughout the country. During the 1980s, Ortega changed the design, manufacturing, and supply chain to reduce lead times and react to new trends in a much quicker way, which Zara called “instant fashions.” The improvements included the use of information technologies and using a group of designers instead of individuals. And, that’s how the world’s favorite fashion brand of today was born.

Zara slowly expanded its empire from the town in Spain to the rest of the country and then later to Portugal. By the 1990s, the store had expanded into the United States, France, and most of Europe. Today Zara Company operates in 88 countries with having approximately 6500 stores all over with having a unified Zara mission statement.

Zara Mission Statement

Zara company Zara mission statement focuses on the firm passion and the determination of Zara company to be the leading fashion brand globally. The vision and the Zara mission statement have played a crucial role in the growth and popularity of the Zara company. Zara mission statement is to provide customers what they want and get it faster than anyone else. With such a simple, concise, and straight forward Zara mission statement expresses the way Zara Company has been so successful. Therefore Zara mission statement has the following parts:

  • Distinguished products
  • Improved lives

Zara company is also concerned with the likes and the interests of the clients. That is why Zara company focuses on learning about the wants to inform the design of its products, and this is what makes Zara company brand unbeatable. Also, Zara company focuses on meeting the demands of its clients when needed. It improves in enhancing and sustaining loyalty. This unique Zara supply chain has increased the speed of delivering products faster, having a well- established brand image all across the markets.

Vision Statement

Zara company vision statement focuses on contributing to the sustainable development of the society and the environment with which we interact. The vision statement of Zara company includes:

Zara Vision Statement

  • Developing Society
  • Improving the environment

Apart from the Zara mission statement, some core values that Zara Company follows are:

  • Zara company core values include beauty clarity, and sustainability, which acts as the guiding principles in the operations.
  • Zara company acknowledges and works towards fostering working culture and to be updated with the market demands.

Zara Company has future goals that work for the environment and the social realm. Zara Company advances through its mission statement, also focusing on meeting the needs of the customers. Another critical factor of Zara Company is the core values that continue to influence the internal organization and the attitudes towards the vision and mission statement of Zara Company.

Zara Supply Chain

Analyzing the Zara case study of the Zara supply chain of Zara Company allows the organization to be flexible in the context of the amount, frequency, and the variety of the products to be launched. When going through the Zara case study of Zara supply chain, it is seen that the key of Zara Company is to establish an agile Zara supply chain that rests on the following approaches:

The Proximity of Supply: The suppliers and the Zara supply chain are tightly knit. Zara Company and the suppliers are all close to the factory so that they can order day basis on the needs and the demands of the customers ever.

Procurement Methodology: Another factor that is revealed after having a look at the Zara case study related to the Zara supply chain, the procurement team of Zara Company does not focus on the number of finished clothes. Zara Company, therefore, focuses on the quality of the raw materials needed to manufacture the clothes. This helps in reducing the waste, and the fabric can be reused but not to resell the piece of clothing that cannot meet the expectations.

Production Feedback: Another factor that can be concluded when going through the Zara case study on the Zara supply chain and its success is the feedback process of Zara Company. Every day the manager gives the feedback of the customers to the market specialists. They pass the information along with the production and the design teams. The rapid feedback loop of the Zara supply chain helps in a quick and agile response to the market.

Local Manufacturing: Zara supply chain, according to the Zara case study, presents a drastically different approach than the competitors. Instead of outsourcing production in Asia and Western Europe, Zara Company manufactures the product in Galicia. Zara Company keeps near about 85% of the plants idle, as to minimize the response to the demand changes all around the world.

Demand Forecasting: According to the Zara case study related to the Zara supply chain, it reaps the benefits of efficient inventory management models. This helps in determining the exact quantities of the items that are needed by every store. Zara case study also shows that Zara Company ships its products twice a week in a very small amount. Even if the experiment fails, the agile Zara supply chain assists in providing different styles in a short period. Zara supply chain helps Zara company to find the right product almost every time.

The synergy between Business Strategy and Operational Process: Zara supply chain strategy in context to Zara case study is achieving growth through diversification with the vertical integration strategy. It works on couture design, distributors, manufacturers, and retail clothes that are launched just after the two weeks of the ramp show. Zara Company owns the Zara supply chain and competes on its speed in the competitive market, embodying the idea of fast fashion.

Just in Time Production: Zara supply chain focuses on the delivery of fashionable and trendy clothes through a controlled and integrated process of just in time.  Zara supply chain also focuses on a significant amount of its in house production, and also makes sure that the factories reserve 85 percent of the capacity for in-season adjustment. Analyzing the Zara case study, the turnaround time of Zara Company is miraculous in context to Zara supply chain management.

Zara Supply chain approaches

How Zara do it?

  • Zara Company today depends on the agile oriented Zara supply chain that is equipped to bring and deliver the goods to the market quickly and cost-efficiently. Thus these factors have led Zara Company to speed to market and have led to rethinking their manufacturing and Zara supply chain strategies.
  • Fast fashion goods as they are instantly produced and pushed into shelves immediately by Zara company in context to Zara supply chain. To accommodate the speedy schedule, order fulfillment, distribution, and warehouse operations, Zara Company focuses on these resulting in a sustaining and enhancing customer base.

Thus, based on the Zara case study on the Zara supply chain, one can understand that a robust supply chain and Zara mission statement have led to the success of Zara company to a great extent.

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