(INS3021 03) - Global Supply Chain Management Analysis of ZARA company

This text appears to be the cover page and table of contents of a report on the global supply chain management of the ZARA company, written by Group 12 for the INS3021-03 course at the International School (VNU-IS) in December 2022. The report aims to study ZARA’s worldwide supply chain management, including its strategic priorities, supply chain design, and supply chain management issues. The report also discusses ZARA’s supply chain strategy, including its “Leagile” approach, which combines lean and agile strategies. The report concludes with recommendations for addressing supply chain management issues in logistics and demand forecasting.

Global supply chain
management
Group 12
Global Supply Chain Management Analysis of ZARA company
Lecturer: Dr. Trần Công Thành
Group members: Chu Ngọc Linh – 20070221
Phạm Thị Dịu – 19071327
Nguyễn Thu Hoài – 20070931
Nguyễn Thu Huyền – 20070937
HaNoi, December 2022
FINAL EXAMINATION – REPORT
INS3021-03

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Table of Contents
EXECUTIVE SUMMARY .............................................................................................. 3
I. INTRODUCTION ........................................................................................................ 4
II. STRATEGIC PRIORITIES ....................................................................................... 4
1. Order Winners ............................................................................................................ 4
2. Order Qualifiers .......................................................................................................... 6
III. SUPPLY CHAIN DESIGN ....................................................................................... 8
1. Zara supply chain structure ......................................................................................... 8
2. Vertical Integration ....................................................................................................10
3. Outsourcing ...............................................................................................................12
4. IT ..............................................................................................................................13
5. Supply chain strategy .................................................................................................14
5.1. Lean strategy .......................................................................................................14
5.2. Agile strategy ......................................................................................................16
IV. SUPPLY CHAIN MANAGEMENT ISSUES ..........................................................17
1. Forecasting demand ...................................................................................................17
2. Logistics management ...............................................................................................19
V. RECOMMENDATION..............................................................................................21
1. Logistics ....................................................................................................................21
2. Forecasting demand planning ...................................................................................22
VI. CONCLUSION .........................................................................................................23
APPENDIX A: PRESENTATIONSLIDE......................................................................23
APPENDIX B: SELF- EVALUATION FORM .............................................................27
REFERENCES ...............................................................................................................29

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EXECUTIVE SUMMARY
This report's objective is to study on Zara's worldwide supply chain management. It has three
primary components that may be separated. To understand the industry drivers and the
criteria a business needs in order to remain competitive, we first took a look at the Zara order
winners and order qualifiers. Then, we go to discover the Zara supply chain design. Also, we
mentioned supply chain strategy in Zara with the name of supply chain “Leagile” including
“Lean strategy” and “Agile strategy”. We will research some management issues in supply
chain with question "What, and For what purposes and How to do?" and to show how each
stage represents its own goals. Finally, we give our recommendation for each issue at the end
of this report.

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I. INTRODUCTION
A Spanish multinational chain of clothes stores is called ZARA. Amancio Ortega created it
in the year 1975. Currently, this corporation employs 75,000 people globally and has 2264
outlets throughout 96 nations. In the market, H&M, Forever 21, and Boohoo should be
included as some of Zara's rivals. According to Ross (2015), Zara has access to more than
1725 suppliers in more than 50 nations, with a 60% manufacturing capacity. The Zara supply
chain is dedicated to "Leagile" in order to carry out such quick fulfillment. In particular,
Naylor et al. (1997) invented the term "Leagile" to refer to hybrids of the lean and agile
techniques. Zara has built a flexible supply chain with elements of "lean" manufacturing. It
works with the intention of responding quickly to the customers' shifting demands. Low
stock, high efficiency, and high responsiveness define the supply chain strategy. As a
consequence, the system is adaptable enough to handle abrupt fluctuations in demand, even
while the stock is kept slightly below the demand to adhere to the lean-approach.
II. STRATEGIC PRIORITIES
1. Order Winners
At the beginning of its founding, Zara found a significant gap in the market that very few
fashion brands could effectively address. In the mid-1980s, Amancio created a new fashion
trend called "instant fashion" with changes in design and technology to meet customers' needs
and fashion trends.
Zara chooses to prioritize cost and responsiveness. This strategy combines the following two
components:
 Short production and delivery times, allowing tight matching of supply with uncertain
demand. Zara's supply chain is capable of handling more than 450 million products
per year, and new models are launched twice a week. The stable production schedule
along with the fast delivery times of the Zara supply chain help it stay close to the
needs of its customers.
 The high-fashion or trendy product designs that Zara chooses to cater to the general
mass market across the industry, creating inexpensive look-alikes of new fashion
trends best for customers. Based on the latest styles and trends, they create new
designs and put them in store in 1 or 2 weeks. And while high-fashion brands focus

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on creating trends, Zara takes the shorter route: simulating designs and surveying
consumer demand. One of the business strategies of the business is that instead of
producing many products for the same model, Zara focuses on creating many designs
and minimizing quantity.
Thanks to that, even if this model runs out of stock quickly, there are still many more models
waiting to be released. Zara has a relentless focus on the customer, the creation of a new
product and the needs and wants of customers are inextricably linked.
Figure 01: Leading 10 European fast fashion brands based on units sold per year
worldwide in the financial year 2018/2019*(in 1,000s) (Source: Statista 2022)
According to this figure, Zara takes the lead when it comes to the highest number of products
sold in a year in comparison to other competitors. As a result, Zara's success is largely due
to the speed at which fashion trends are constantly changing. Customers buy from Zara very
quickly because they don't last long on the shelves. By giving customers a sense of urgency,
the majority of transactions are done instantaneously. Zara products are constantly changing,
if you come to Zara a week late, you will not be able to find the previous designs. This is the

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reason why Zara customers are urged to visit the store often. Since then, Zara beat other
fashion brands, becoming the most loved brand. With cheap products but following fashion
trends and famous brands, Zara has been successful since opening its first store. Currently,
Zara is under the management of Inditex group and has more than 2100 stores in 88 countries
worldwide (according to 2018 data). In 2017, Zara was ranked 24th for best global brand
(according to Interbrand's global brand consulting list). In Vietnam, in less than 4 months
since joining.
2. Order Qualifiers
Zara integrated supply chain management: To maximize efficiency, flexibility, and
synchronization across phases in order to reduce the "bullwhip effect" (more on that later)
and increase customer satisfaction. Creating significant earnings and shareholder value in the
short and long term at the same time. (Per Hillietofth and Olli-Pekka Hilmola, 2008).
Zara is shortening delivery times to stores to ensure low inventory and high responsiveness
to adapt and deliver products to stores according to the latest fashion trends and customer
feedback at a fast pace.
The above activities have helped Inditex-Zara significantly improve its competitiveness in
the industry and successfully combat the negative effects of short product life cycles, high
product variety, and uncertain demand and thus can closely match the supply of products to
the stores with the market demand. This contributes to a reduction in inventory backlogs,
avoiding loss or out of stock.

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Figure 02: H&M and Zara’s new arrivals (based on the number of products arriving
online each month at te retailers’ UK stores (source: EDITED)
According to the picture, you can see that Zara's product arrival time is much earlier than
H&M. Zara has a focus on the customer, the creation of a new product and the needs and
wants of customers are inextricably linked. In particular, Zara trains and empowers its
employees and store managers. These employees are extremely sensitive to the needs of
customers. They listen attentively and take notes of customers' opinions and ideas about the
product. They closely observe the style that customers are wearing, thereby assessing the
ability to convert into a unique style with the Zara brand. Zara's customer segment is mainly
young people. However, they want products that are reasonably priced but still trendy.
Therefore, Zara's strategy has targeted this element and produced trendy and low-priced
designs. That doesn't mean Zara uses substandard components. Zara's customer positioning
strategy is aimed mainly at women. In addition, men occupy a smaller segment in the strategy
and the remaining segment is for children's fashion.

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III. SUPPLY CHAIN DESIGN
1. Zara supply chain structure
Figure 03: Zara’s supply chain structure
This organizational structure states that Zara mostly sources its resources from Italy, Spain,
Portugal, and Greece. They only purchase textiles in 4 or 5 different color variations. The
manufacturer will get the textiles in 5 days. The possibility to meet specific consumer
demands arises using actual demand and the needs of existing customers, which boosts
customer loyalty. In 2015, according to Yang Daojian, Qi Ershi, and Li Yajiao, “The CUBE”
is the name of the distribution hub used by Zara. High-speed monorails run via underground
tunnels connecting the industries to "The CUBE". To get finished clothing, colored textiles,
and cut fabric to each factory, a monorail system is used. Then, 1000 new designs are
produced each month by Zara's design team. Every two weeks, Zara altered their collections.
The company designs new items and finishes them in its store in around four to five weeks.
(Mhugos, 2020).
Regarding the structure of Zara, the definitions of lean, agile, and decoupling at various
points in the Zara supply chain, and their implications:
Overview for lean stages:

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 ZARA disobeys the laws of the fashion supply chain by maintaining little stock and
routinely changing its collections through its "Just in time" or "Lean" business
strategy. Store managers place clothing orders twice a week at specific times, and
fresh clothing is delivered on time every time. ZARA has greater production control
than other merchants to make sure this occurs.
 As a consequence, new designs may be available in stores within fifteen days,
enabling ZARA to meet customer demand by manufacturing more of its best-selling
goods while ignoring its least-selling ones.
Overview for Agile stages:
 Zara was created from the beginning to be quick and flexible. Instead of exporting
to Asia, Zara continuously produces unfinished goods using a network of automated
factories in Spain and more than 300 small finishing plants in North Africa and
Turkey. Following the approval of a new design, unfinished goods are removed,
delivered to finishing facilities, and transformed into goods that can be sent in as
little as 24 hours to Europe and in 40 hours to Asian and North American markets.
 According to Dr. Warren Hausman of Stanford University, this creative method of
working enables companies to "raise profitability by as much as 28 percent" and
retailers like Zara to "avoid undesirable markdowns and lost sales." Consequently,
Zara has higher margins and lower inventory risk than the average store, making it
roughly four times more lucrative.
Decoupling stages:
In order to perform order-driven production as opposed to forecast-driven production, Zara
employs two decoupling points, the material decoupling point, and the information
decoupling point, to combine a speculation/postponement strategy with semi-finished
inventory (Gereffi & Frederick, 2010).

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Figure 04: Zara’s demand-driven approach
Source: MacCarthy and Jayarathne (2010)
 Material Decoupling Point: The point of decoupling is the assembler. In accordance
with the projection, the "commercial managers" are in responsible of
conceptualizing the types of apparel and textiles that will be ordered. The designs
are developed using data collected from customers in real time on the sales floor.
 Information Decoupling Point: The head office, factory, distribution center, and
retail outlets are the four supply chain participants that can all view customer
purchase behavior objectively since the information decoupling point is at the
furthest point upstream, or the headquarters. All supply chain partners are made
aware of changes in sales profiles so they may react promptly and efficiently to meet
demand without being further burdened by distorted end-customer demand. In this
thorough supply chain study, we will go into more depth on how Zara integrated and
merged the principles of lean and agile in their supply chain.
2. Vertical Integration
Vertical integration was employed by Zara to make sure that their supply chain operates well.
Since Zara has total control over the whole procedure, from design to shipment, they are able

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to gather important data at each step. Then, this input may be examined to identify
inefficiencies, point out areas of success, and generate accurate projections.
Figure 05: Information flow
The global clothing store gains more control through vertical integration, which also lowers
distribution costs, lowers risk, and improves consumer transparency. Since Zara can maintain
control and monitoring along the whole supply chain, it can also enhance cooperation and
communication between varied partners.

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3. Outsourcing
Figure 06: Zara vertical integration supply chain
Since it controls all operations from its headquarters in La Curona, Spain, Zara is virtually a
vertically integrated store, allowing it to satisfy consumer demand for the newest trends. In
its own shop in Spain, Zara manufactures around 50% of its merchandise, but all of its
stitching is done by other parties. With the use of buying offices in Barcelona and Hong Kong,
as well as personnel sourcing in the company's headquarters in Arteixo, Spain, Zara obtains
fabrics, threads, and other components from external suppliers. In order to give maximum
flexibility for the newest season's trend and save waste costs, around half of the cloth ordered
is not colored. Comditel, a wholly owned subsidiary of Inditex, works with a variety of
outside fabric and component vendors. Comditel is a company that dyes, patterns, and
finishes uncolored fabric.
Because of its vertical integration, Zara produces around 40% of the fabric it sells and
purchases the remaining dyes from a separate business. Since 60% of Zara's merchandise is
made in-house, the retailer can generate new styles with more variety, quantity, and regularity.

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50% of the products that Zara sells are made in Spain, 28% in Europe, and 24% in Asia and
the rest of the globe. The worldwide distribution center for Zara operates as follows:
Figure 07: Outsourcing process for Zara Global Distribution Center
4. IT
Communication in-house IT: The technology used by Zara lowers costs while while
increasing operational responsiveness to clients. Zara's key approach is to utilize IT and
human resources to swiftly respond to market demand and foresee consumer trends. Its high-
tech DC and straightforward IT are helpful for this. It also optimizes time while reducing
costs for core production components. By utilizing a PDA to verify with shop managers and
updating client feedback, Zara continues to update information. After orders were authorized,
warehouses gave lists of deliveries to the retailers. Store computers additionally provide
barcode garment storage systems and DC mobile tracking areas.
Merchandise management systems: In order to increase information transmission via
information technology, the firm employs a self-developed merchandise management system,
which leads to a quicker and more effective distribution network. The RFID tag can track
how many items are coming into and going out of the warehouse. All of the product's tags
will be read by the tag reader as it moves through. RFID may also inform a business when
an item is liquidating, selling, or running low on supply. Additionally, Zara uses augmented

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reality (AR) technology in-store so that shoppers can view virtual models wearing the brand's
goods on their smart devices, making shopping more easy.
5. Supply chain strategy
5.1. Lean strategy
Due to its lean production through vertical integration and fast fashion business strategies,
which provide it with a competitive advantage over other traditional fashion retailers in the
industry, Zara has achieved outstanding success (QuickBooks Commerce, 2018).
a. Designer:
 Trend Forecasting:
In order to respond to customers' requests for new products and customer needs, such as style,
material, color, and gloss requirements, Zara performs trend forecasting by analyzing
customer tastes and habits through analysis of quantitative data (i.e., order data and point of
sale (POS) data from stores) (Aftab etl al., 2018). Additionally, analyzing the pictures and
videos that users share, like, and post on social media is a sign of both recent and upcoming
trends. For companies like Zara who cater to a youthful demographic, this information is
essential.
 Product Development:
Update trends for designers - At Zara, sales representatives gather client information and then
communicate their comprehensive understanding to the design teams at the company's
headquarters, enabling designers to stay on top of emerging trends. Designers can predict
prospective demand for fresh food not indicated by vending tracking systems by employing
complete information. Designers produce fresh design sketches by hand and through
computer-aided design methods by fusing in-depth knowledge with current fashion trends
(Mazaira et al., 2003).
b. Manufacturing:
1. Lean Manufacturing:
 The clothing line Zara is renowned for keeping up with current trends. Just-in-Time
(JIT) production techniques are used by Zara to keep up with the rapid pace. The

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Just In Time (JIT) principle, which states that "the right product - in the right amount
- in the right place - at the right time," is closely followed in Zara's manufacturing
process. JIT demands the removal of non-value-added processes.
 Due to in-season sales, Zara therefore obtains bigger percentages of the full price.
By emphasizing quicker reaction times to fashion trends and remaining current with
them. Zara made sure that its retail locations could have the newest items in fashion
that consumers were interested in at the moment. In as little as two weeks, a design
may be created and clothes can be found in stores. H&M's lead time, by contrast, is
greater than 20 days. The standard selling period is 4-6 months.
2. Bimodal value network:
The bimodal value network strategy has been quite effective for Zara. The corporate goal of
Zara is to open as many stores as possible with stylish clothing.
 It employs the agile procurement value network approach for its fashion-conscious
clientele, utilizing the more adaptable Western European vendors to achieve its
business objective.
 It employs the conventional procurement technique of working with Eastern
European or Asian vendors, who have longer lead times but cheaper costs, for basic
commodities with predictable demand. Around 3,000 individuals are employed in
industrial operations in Spain, where the average hourly income is 8 euros, as
opposed to 0.40 euros in Asia.
=> Depending on the life cycle stage, the client, and other factors, the corporation may
shift some items from one value network to another. The company's objectives are
accomplished through collaboration between traditional and agile procurement.
c. Lean inventory management:
Through twice-weekly shipments, Zara determines the necessary supplies for each of its retail
outlets using an inventory optimization model (Lean Inventory Management). The business
constantly makes care to keep its inventory at or below 10% (11–13% less than rivals).
Delivery is highly constrained, guaranteeing that each retailer only receives it as needed. This
serves to avoid the accumulation of undesirable sources while promoting an exclusive brand

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image. By keeping inventories low, Zara appears to be using a psychological tactic to reduce
the frequency of discounts. Customers should not assume that a product is out of stock if they
notice a big number of them abruptly disappearing: Depending on sales, Zara switches out
inventory between its physical locations and online. Customers believe they are waiting for
something they truly want when inventory levels are low, which encourages purchases and
sales growth.
5.2. Agile strategy
Figure 08: Agile supply chain strategy in Zara
Agile Supply Chain (ASC) is a rapid reaction, indicating shorter, more adaptable changes in
market demand, according to Barnes and Greenwood (2006). Zara intentionally created a
demand-driven supply chain strategy built on the concepts of agility (Mark Barratt and Simon
Eagle, 2017). Zara enjoys a considerable competitive edge in the garment market because of
this tactic.
- Demand postponement:
 Long-term Forecasting:
Garca (2014) observed that, with an emphasis on the prior year's outcomes, Zara's long-term
planning mostly relied on historical performance and demand trends based on Spain's fashion
demand cycle. Based on documented customer behavior trends in Spain, Zara has historically

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scheduled their purchasing such that the majority of their products shown in shops is in line
with Easter for the Summer Collection and close to the end of September for the Winter
Collection. Zara's decision to release its best products at particular seasons of the year causes
those times to be the most lucrative, which leads to a self-fulfilling prophesy. The author
questioned the present process's high level of subjectivity and over-reliance on the
managerial staff's knowledge in light of the lack of quantifiable criteria for long-term
procurement orders with demand matches.
 Short-Term Demand Forecasting:
Zara reduces many of the hazards connected with poor forecasting by replenishing inventory
twice a week and using observed demand as the main input. To determine the amount of
replenishment needed for each shop, Zara determines an average daily demand rate, which
is typically determined as the daily demand over the previous two weeks (= four cycles).
Then, in order to reduce the possibility of stockouts, it establishes a target for days of
inventory, which it typically sets at 21. The sum of these two figures is what they consider
to be their "Objective Stock," or optimum level of in-store inventory. Then, the difference
between the desired and actual inventory levels is sent.
Equation: Replenishment Quantity Calculation
Source: García (2014).
At this point, it should be clear that the optimal inventory level is dynamic and shifts as
demand for a certain good rise or falls.
IV. SUPPLY CHAIN MANAGEMENT ISSUES
1. Forecasting demand
 Issues:
Zara is a prolific designer who releases collections every few weeks. This method guarantees
that clients return and that designers are aware of client input and demand. However, it
increases the inventory load owing to shortages and out-of-stock situations (Mollard, 2020).
Replenish Q = (Avg. Daily Demand in the last 2 weeks x Days of Inv) - InStore InV

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 Objective:
Zara reaps the benefits of very efficient inventory management models that help them
determine the exact quantity of items needed for every store.
 Creating a sense of scarcity, very few unsold items, and failed testing helped Zara
find the right products nearly every time. Zara’s designers churn out the new styles
and they're fast-tracked to stores while the trend is still going strong.
 Managers of retail establishments share information on what customers like, hate,
and are seeking for. The designers at Zara immediately receive this demand
forecasting information and start doodling.
 Zara operates typically 4.5 days per week around the clock on full capacity, leaving
some flexibility for extra shifts and temporary labor to be added when needed.
 Practices:
Zara's demand forecasting is customer-centric, adopting an Agile approach. It enables Zara
to maintain and expand its competitive advantage over competitors. Sales monitoring data is
critical in helping Zara to respond to new trends and remove designs that do not appeal to
customers.
On forecast trends, Zara is more reactive than its competitors: they design thousands of new
styles which they create in limited amounts once a year and rotate around retailers every few
weeks. When a style sells out too quickly, Zara analyzes the sell-out and only makes more
of its best-selling items. This keeps customers coming back for the designs that sold out too
quickly or to see new ones completely. The process of anticipating fashion trends, including
hues, materials, shapes, patterns, and more, is known as trend forecasting. The designers at
Zara, on the other hand, work haphazardly, delivering new collections all year long and
basing their product plans on sales data. To speed up the first stages of collection
development, designers can select designs and goods that will be in demand for a long time
and in the right numbers.
Furthermore, tracking the photographs and videos that customers post, like, and share on
social media may provide insight into current and future trends. This information is critical
for firms with a youthful demographic, such as Zara. Quantitative study of social media dives

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into consumer demands, and this technology can forecast trends up to a year ahead. Zara's
objective to remain customer-centric can only become better through trend forecasting
(Heuritech, Oct 2020).
Additionally, their minimal inventory approach results in out-of-stock situations when a
product is really popular, leaving people longing for what they cannot have. Knowing what
customers want both now and in the future is the greatest method for Zara to design their
collections with clinical accuracy. Planning reduces overstock, prevents out-of-stock, and
responds to consumer desires all while doing good for the environment.
Figure 09: Zara’s US Clothing Sales Help Swell Top Line (Clara Hernanz Lizarraga,
2022)
2. Logistics management
Zara follows the fashion trend closely, develops the garments quickly and distributes it to
stores through its logistics network. From warehousing to inventory management,
transportation store distribution, the company keeps an eye on all logistics functions in order
to deliver the clothes to stores in time, all the time (Nursing Geek).
 Issues:

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Logistics strategies of the company aim to deliver the right product at the right place at the
right time. The increase in online buying trend in the past decade, insufficient stock at a retail
location and logistics difficulties including competitors' inventory expenses are greater has
forced company to redesign their logistics and distribution networks.
 Objective:
Logistics operations of Zara store involve areas like inbound and outbound transportation,
warehousing, inventory movement, packaging and unitization and the handling the flow of
information through Information Technology (Nursing Geek).
 Practices:
- Lean Logistic:
 Inventory: Zara adopted an entirely different Inventory management strategy as
compared to the competition. Zara produces almost half of the goods within their
factories and hold least inventories in warehouses and distribution channels as
company produce clothes within the ongoing who mostly outsource manufacturing
activities to different suppliers. Zara reduces the amount of unsold inventory in its
warehouses and bridges the production-to-sale time gap. Customers believe they are
waiting for something they truly want when inventory levels are low, encouraging
purchases and sales growth.
 Warehouse management: It is vital to update daily sales numbers in order to discover
which samples in the shop are popular with clients and report to the main warehouse
in order to promptly update the required quantity of items supplied.
 Zara’s logistics information system: Zara uses inventory management and control
system (ESS) at strategic level, helps inventory control and maintains the inventory
level to as low as possible. A transportation system (MIS) at the tactical level helps
in maintaining shipment, freight, striking and container data. And a warehouse
system (TPS) at operation level helps in effective warehouse management during
the whole logistics activities.
- Agile logistic:

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 Transportation: Time and costs are two basic factors involved in making transport
mode strategies. Zara employs trucks and planes for transportation since trucks are
the most versatile means of transportation. Furthermore, because air travel is the
fastest means of transportation, Zara will be able to distribute merchandise to other
nations across the world as swiftly as feasible.
 Third-Party Logistics (3PL) Providers: Third-party logistics providers, or 3PLs,
have become more significant and visible in the supply chain. Zara has outsourced
their logistics operations of air, ocean, land transportation modes along with
customs brokerage to 3PL companies (Nursing Geek). As a result, Zara's Third-
Party Logistics (3PL) suppliers may deliver items to clients more quickly and
flexibly, product distribution services, account management, tracking and tracing
of shipments.
V. RECOMMENDATION
1. Logistics
Various significant cities in many nations throughout the world are currently battling with a
terrible covid-19 epidemic. Customers will be unable to purchase as much as they used to
since the lockout has been prolonged, causing Zara to confront a significant inventory
problem. The increasing volume of unsold items in the warehouse as a result of mass
production and delivery to big cities hit by the covid epidemic may result in huge losses.
Instead of burning things that produce waste and pollution, Zara may recycle, remanufacture,
or give them to organizations, which would further enhance Zara's reputation.
Zara should also evaluate the number of items sent to retail locations in cities under lockdown
Covid-19 to avoid building an excessive amount of inventory to mitigate cost harm. Zara
must be exceptionally nimble in supply chain management, particularly logistics, to meet the
always changing garment purchasing demands of consumers. Because the volume of items
produced rises during peak seasons, our staff will find it challenging to work at a high level
of intensity.
As a result, Zara may consider recruiting temporary workers to prepare items properly and
quickly for timely shipment to retail locations. Furthermore, it is also critical to collaborate
with third-party transportation service providers. Zara should work with partners that are

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close to its retail locations and are familiar with the local transportation infrastructure. They
will know the shortcuts for speedier delivery when travelling on congested roadways.
Second, clients who are interested in Zara items and want to buy in quantity can choose a
third party that can provide things to them as quickly as feasible. Furthermore, Zara may
utilize technology to develop an online shopping strategy during the covid-19 epidemic
because the firm has suffered huge losses as a result of a long-term lockout that prompted
Zara to close up to 95 percent of its stores last year, destroying $335 million in inventory.
(Chhunlin, R., 2022).
2. Forecasting demand planning
Customers' expectations are not realized since the designs are released in a restricted number
and over a short period of time. To address this issue, Zara must focus on developing accurate
demand predictions. RFID and SKU data should be used more effectively. Improved forecast
accuracy helps firms to enhance customer satisfaction while minimizing manufacturing
costs. This is a prevalent problem in the fashion industry, as product life cycles are short and
modifications are frequent.
Zara should also ensure that the online and offline predictions are consistent and synced.
Online channels should take use of e-commerce by analyzing, processing, and aggregating
firm inventories utilizing website data and using the same online and offline pricing. Zara
should devote more resources to artificial intelligence research and development to improve
demand forecasts.
Zara is able to maintain a safe distance from competitors and new entrants in the quick
fashion market as a result of this. Simultaneously, it supports the company in planning
purchases and manufacturing based on present circumstances by analyzing and forecasting
fashion trends and consumer desires months in advance.
Zara may also utilize its website and applications to gather client wants more quickly and
easily. For example, implementing consumer interest survey programs or gathering
evaluations of dissatisfied customers after they have paid through an online channel. To make
the optimal decision, the comments must be reviewed swiftly and completely. They may also
create an app that allows users to mix and match items from the website in order to optimize

Group 12- INS3021.03 - International School (VNU-IS)
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the user experience and gather customer fashion trends (Aftab, M., Yuanjian, Q., Kabir, N.
and Barua, Z., 2018).
VI. CONCLUSION
Zara is an expert in the "fast fashion" supply chain, which is generally understood to be a
prompt response to client needs and a prompt response to changes in supply. In the case of
Zara, when the product satisfies the current desires of the market, the Consumers purchase
the goods, which is how Zara attracts new customers and keeps its current ones. The
corporation may be able to reduce future risks due to unsold goods by utilizing extensive data
on current demand and identifying the interests of certain consumers. Additionally, the
acquisition payback period is shortened, which is a highly advantageous addition to Zara's
cash flow statement. The possibility to meet specific consumer demands arises using actual
demand and the needs of existing customers, which boosts customer loyalty.
Word count: 4850 words
APPENDIX A: PRESENTATIONSLIDE

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Group 12- INS3021.03 - International School (VNU-IS)
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Group 12- INS3021.03 - International School (VNU-IS)
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Group 12- INS3021.03 - International School (VNU-IS)
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APPENDIX B: SELF- EVALUATION FORM OF GROUP 12
No. Student Name Student ID Tasks Contribution
1 Chu Ngọc
Linh (Leader) 20070221
Midterm: Zara management
issues, Zara’s strategy supply
chain, recommendation.
Final: Zara supply chain design,
check content for all members,
check plagiarism, introduction of
report, manage the teamwork.
100%

Group 12- INS3021.03 - International School (VNU-IS)
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Lessons learned from the report:
- Clearly understand the supply
chain of zara including 2 areas:
Lean and Agile called “Leagile”
supply chain.
- Understand the strategies Zara
implements at each stage to achieve
its business goals and achieve
success in the global supply chain.
- Build the report as logically
content as possible.
- Learn how to manage the work
done by the team effectively and
fairly.
2 Nguyễn Thu
Huyền 20070937
Midterm: Strategic priorities, do
slides
Final: Strategic priorities, report
design
Lessons learned from the report:
- More specifics on supply chain
management, more clearly supply
chain strategy and strategic
prioritie.
- Know more to distinguish Order
qualifiers vs order winners.
- Learn more about how to manage
supply chain effectively.
- How to do teamworks effectively.
100%

Group 12- INS3021.03 - International School (VNU-IS)
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3 Nguyễn Thu
Hoài 20070931
Midterm: Introduction, Strategic
priorities, check content
Final: Supply chain management
issues, Conclusion, Report design
Lessons learned from the report:
- Clearly understand the supply
chain management (including
Zara), known deeply about strategy
priorities.
- Know more knowledge about the
supply chain management issues
and how does it work.
- Have the opportunity to learn
more about the life cycle of supply
chain design.
100%
4 Phạm Thị Dịu 19071327
Midterm: Overview of the Textile
and Apparel Industry,
recommendation
Final: Recommendation, Executive
summary
Lessons learned from the report:
Understand more about zara’s
supply chain and measures to help
zara grow in terms of delivery time,
product as well as inventory
100%
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