Effective Supply Chain Management in Zara and Primark

The successful supply chain management of both Zara and Primark is dependent on a constant interaction between the services users and company, involving different suppliers, distributors, and dealers in an information network. The flow of money starts from customers to manufacturers and then to vendors, highlighting the importance of managing funds effectively for efficient supply chain management. The five performance objectives and three flows (product, information, and payment) are crucial for effective supply chain management.

International Logistic and Operational
Performance
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Table of Contents
INTRODUCTION ...............................................................................................................................4
TASK ...................................................................................................................................................4
1. Compare and contrast supply chain management of Zara and Primark in the light of five
performance objectives ...................................................................................................................4
2. Supply chain integration of Zara and Primark using the three types of flow..............................6
CONCLUSION ...................................................................................................................................9
REFERENCES...................................................................................................................................10
APPENDIX........................................................................................................................................12
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Illustration Index
Illustration 1: Polar diagram for both Zara and Primark......................................................................4
Illustration 2: Integration of Supply Chain ..........................................................................................7
Illustration 3: Product flow process of Zara.........................................................................................8
Illustration 4: Product and information flow in supply chain of both Zara and Primark.....................8
Illustration 5: 7 rules of fashion supply chain followed by Zara .......................................................12
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INTRODUCTION
Logistic management is a part of supply chain management which includes planning,
implementation and controlling over the flow of information and goods from origin point to the
consumption point. Beside this, operational performance help the organization to assess the current
performance against the set standards or performance indicators (Dornier and et. al., 2008). The
following research has related to international logistic and operational performance and to explore
its importance, Zara and Primark companies have taken into consideration. The concepts which will
discuss in during this study are five performance objectives, supply chain management and
strategic contribution of operation management to support business objectives of Zara and Primark
(Rodrigues and Potter, 2013).
TASK
1. Compare and contrast supply chain management of Zara and Primark in the light of five
performance objectives
Supply chain management include planning and management of those of activities which are
involve in procurement, sourcing and conversion of material into a goods. The contribution and
collaboration of the different vendors are also include in supply chain management. Zara and
Primark, both the companies are using supply chain management strategy to run the business in
more effective manner (Gimenez and Ventura, 2005). To know the effectiveness of supply chain
management in both the organizations business, a comparison can be conduct in the light of five
performance objectives with the help of polar diagram which is as follows.
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5
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P o la r D ia g r a m
Z a ra
Prim a
rk
Illustration 1: Polar diagram for both Zara and Primark

Quality:
It has considered as a first performance objectives because Zara and Primark believe that it
is most important element of their supply chain management system. Quality is one of the essential
element because it defines the relationship between consumers and vendors.
In the case of Zara and Primark, both the companies are continuously improve the quality of
their products (Fish, 2011). The strict actions bring the positive result in terms of reducing process
variation, decrease defects, cycle time between the two process are reduce and on time delivery
time increase. These all thing are directly impact on supply chain management. Therefore, it can be
said from the following discussion that Zara and Primark are using different quality control
techniques in supply chain management to reduce waste and operating cost during production of
different products (Fish, 2011).
Speed:
Speed is a shortest way to increase the speed of response. It is a duration when an external or
internal consumer request for a product and company meet it as per the requirements. Speed can be
categorised into internal and external speed. Internal speed define the required time to reduce the
cost of the final product. On the other hand, external speed is related to respond time of company to
meet the customer demands (Griffis and et. al., 2007).
In the case of Zara, company has given more emphasize on the speed and responsiveness as
compare to the cost. To increase the speed of response, the company has deliver the cloths to the
stores more quickly in small batches. For this, Zara has made tight control over manufacturing and
its retailers as well as mots of the cloths are made in Spain and its near nations (Berfield and
Baigorri, 2013).
But in the case of Primark, the speed of response as per the market demand is low as
compare to Zara. The aim of the firm of reducing the cost of the final products. This increase the
response time and speed of delivery of the cloths and other things to the store.
Dependability:
Here dependability means being on time or consumers get their products or services within
the given time. Zara is having it own production house where company has manufactured its cloths
and accessories. It reduce the dependability of the firm on the third parties to get the order of
products on time. On the other side, Primark Company is not having its own production house. To
get the products, organization has made the contract with the different suppliers and vendors.
Therefore, it has increased the dependability of Primark on the third parties (Prajogo and Olhager,
2012 ). Hence, it has concluded the Zara is a leading company where the customers get their
products with wider variety every time in minimum duration.
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Flexibility:
In terms of operations management, flexibility means being able to change a process or
methods according to the requirement. There are different types of flexibility: product and service,
mix, delivery and volume flexibility (Forslund, 2007). In the case of Zara, company has used
product flexibility because with the changes in the trends of fashion, it is needed to bring the
modifications in apparel designs. For this, firm has brought some small changes in the machines
without affecting the manufacturing process. It has never impact the quality and delivery time of
products and support the supply chain management. On the other hand, Primark is not able to adopt
flexibility option because company has purchased the cloths and other goods from the third parties.
The machines and technologies of vendors are not that much efficient to support the flexibility. It
negatively affect the supply chain management and customers never get the latest products on time.
(Heaslip, 2013)
Cost:
Zara has not given emphasize on reducing the cost of cloths because according to the
company, customers are ready to pay any cost for goods when they get it minimum time with good
quality. It affect the supply chain management but it is help the firm to take competitive advantages.
But in the case of Primark, the aim of firm is providing the low cost products to the users. So that,
by lowering down the final price of the cloths, the quality of goods and its delivery time affected.
This directly affect the supply chain management of Primark and the result is decreasing the sales of
the products as well as market share (International Logistics and Supply Chain Management:
Primark. 2012).
From the analysis of above five performance objectives, it has been concluded that the Zara
is more effectively taking the advantages of its supply chain management because company is able
to meet the cost, speed, quality, dependability and flexibility performance objectives in right
manner. Beside this, Primark is still not taking the benefits of these performance objectives and run
the business according to it. The result is company is only order qualifier meanwhile, Zara is market
qualifier. The pressure of the competition and maintain customer values has influenced Primark to
bring the modifications in existing supply chain management (International Logistics and Supply
Chain Management: Primark. 2012).
2. Supply chain integration of Zara and Primark using the three types of flow
Supply chain integration is coordination and close alignment with supply chain inputs such
as men, machines, money and information. Zara has adopted the vertical supply chain integration
where design, manufacturing, distribution and retailing operations are performing step by step
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(Paiva and Vieira, 2009). The aim of the company behind adopting the following supply chain
integration system is deliver the cloths in any store across the world within a 2-3 weeks. On the
other hand, Primark has used flexible supply network which help in quickly response according to
the market. It assist the company to increase the volume of the goods and effectively utilize the
warehouse capacity of different areas. In supply chain management, there are three types of flow:
information, material/product and money/finance flow (Supply Chain Management process flow.
2008).
Product flow:
The first supply chain integration of Zara and Primark is on the bases of product flow. This
flow include movement of goods from suppliers to the consumers. In the case of return of product,
it start with customer and end on suppliers. To maintain the product flow in the different stores
across the world, Zara design team always monitors the fashion trends and sales (Somaiya, 2012).
More than 1,000 designs have prepared every month and then they are send it to the manufactures.
After manufacturing the cloths, the products are shipped back to Spain. During this period, the local
store managers of the every nation has stay in contact with the Zara head office and inform about
the stock requirements. After this, the company send the consignment to the respective local stores
twice in a week (Somaiya, 2012).
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Illust
ration 2: Integration of Supply Chain
(Source: Razamith, 2008)

But in the case of Primark, the product flow start with the making the contract and sub
contract with the different suppliers and vendors across the world. These individual manufactures
are manufacture the cloths and other goods as per the order of the Primark. Company has placed the
orders once in a week to maintain the stock level. The suppliers have supplied the goods within the
given time duration to the stores of Primark (Koster and Warffemius, 2005).
Information flow:
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Illustration 4:
Product and information flow in supply chain of both Zara and Primark
(Source: What are the three types of flow in supply chain. 2015)
Illustration 3: Product flow process of Zara
(Source: Somaiya, 2012)

It includes the flow of information about the orders and delivery status of purchasing. Zara
and Primark Companies are using Management Information System in their different stores,
warehouses, suppliers and manufacturing locations (Solakivi and et. al., 2011). These all areas are
interconnect with each other and share the information whenever required. A one server has
established at the headquarter place where the all the information related to the orders and its
delivery status can be accessed by different manufacturing units and suppliers at any time (Aside,
2014). The flow of information has taken place in both side i.e. from customer to supplier and
supplier to services users. The information includes in customer to vendor side are purchase order,
change request, complaints, payment request etc. But in the case of suppliers to consumers, the
information are conformation of purchasing orders, despatch details, invoice, payment info etc. So,
the successful supply chain management of both Zara and Primark is depends on a constant
interaction between the services users and company as well as involving the different suppliers,
distributors and dealers in information network (Aside, 2014).
Money flow:
It is a flow of funds which start to flow from customer to manufacturer and manufacturer to
vendors. This process is same for both Zara and Primark Companies because after selling the
products, the entire profit or revenue has transfer to the firms where the payments have given to the
suppliers and stakeholders. For effective management and utilisation of supply chain management,
it is important to manage the flow of funds from one point to another (Aside, 2014).
CONCLUSION
From the above research, it can be concluded that for effective and efficient supply chain
management, it is important to manage the five performance objectives and three flow of supply
chain. Although, to manage the supply chain network across the world is difficult task for supply
chain manager of both Zara and Primark. But it help in taking the right decisions to run the business
in various nations around the world. It is also assist both the organizations to take the competitive
advantages.
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REFERENCES
Books and Journals
Dornier, P, P. and et. al., 2008 . Global operations and logistics: Text and cases. John Wiley & Sons.
Forslund, H., 2007. The impact of performance management on customers' expected logistics
performance. International Journal of Operations & Production Management. 27(8). pp.901
– 918.
Gimenez, C. and Ventura, E., 2005. Logistics-production, logistics-marketing and external
integration: their impact on performance. International journal of operations & Production
Management. 25(1). pp. 20-38.
Griffis, S, E. and et. al., 2007. Aligning logistics performance measures to the information needs of
the firm. Journal of business logistics. 28(2). pp. 35-56.
Heaslip, G., 2013. Services operations management and humanitarian logistics. Journal of
Humanitarian Logistics and Supply Chain Management. 3(1). pp.37–5.
Koster, D, M ,B, M. and Warffemius, J, M, P., 2005. American, Asian and third‐party international
warehouse operations in Europe: A performance comparison. International Journal of
Operations & Production Management. 25(8). pp.762–780.
Paiva, L, E. and Vieira, M, L., 2009. International operations and export performance: an empirical
study. Management Research News. 32(3). pp.272–285.
Prajogo, D. and Olhager, J., 2012 . Supply chain integration and performance: The effects of long-
term relationships, information technology and sharing, and logistics integration.
International Journal of Production Economics. 135(1). pp. 514-522.
Rodrigues, S, V. and Potter, A., 2013. A comparison of FMCG logistics operations in the UK and
South Africa. European Business Review. 25(4). pp.351–364.
Solakivi, T. and et. al., 2011. Logistics outsourcing and company performance of SMEs: Evidence
from 223 firms operating in Finland. Strategic Outsourcing: An International Journal. 4(2).
pp.131–151.
Online
7 Rules of Fashion Supply Chain (Zara Case Study). 2015. [Online]. Available through:
<http://www.supplychainopz.com/2013/09/7-rules-fashion-supply-chain-
management.html>. [Accessed on: 5th November, 2015].
Aside, 2014. Flow in Supply chain management. [Online]. Available through:
<http://tpsynergy.com/blogs/flows-in-supply-chain-management/>. [Accessed on: 5th
November, 2015].
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Berfield, S. and Baigorri, M., 2013. Zara's Fast-Fashion Edge. [Online]. Available through:
<http://www.bloomberg.com/bw/articles/2013-11-14/2014-outlook-zaras-fashion-supply-
chain-edge>. [Accessed on: 5th November, 2015].
Fish, L., 2011. Chapter 3: Supply Chain Quality Management. [Online]. Available through:
<http://www.intechopen.com/books/supply-chain-management-pathways-for-research-and-
practice/supply-chain-quality-management>. [Accessed on: 5th November, 2015].
International Logistics and Supply Chain Management: Primark. 2012. [Online]. Available through:
<http://www.thinkingbookworm.com/blog/2012/06/international-logistics-and-supply-chain-
management-primark.html>. [Accessed on: 5th November, 2015].
Razamith, 2008. Integration of supply chain. [Online]. Available through:
<http://supplylogistic.blogspot.in/>. [Accessed on: 5th November, 2015].
Somaiya, M., 2012. Fashion Forward – Zara’s Supply Chain Strategies. [Online]. Available
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[Accessed on: 5th November, 2015].
Supply Chain Management process flow. 2008. [Online]. Available through:
<http://supplylogistic.blogspot.in/>. [Accessed on: 5th November, 2015].
What are the three types of flow in supply chain. 2015. Supply chain info. [Online]. Available
through: <http://supplychaininformation.blogspot.in/2011/04/what-are-three-types-of-flow-
in-supply.html>. [Accessed on: 5th November, 2015].
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APPENDIX
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Illustration 5: 7 rules of fashion supply chain followed by Zara
(Source: 7 Rules of Fashion Supply Chain (Zara Case Study). 2015)

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