MGT704 Logistics and Supply Chain Management- Report
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Global Business Environment (MGT704)
Added on 2020-02-23
MGT704 Logistics and Supply Chain Management- Report
Global Business Environment (MGT704)
Added on 2020-02-23
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Running Head: Logistics Management 1Case Study of Zara
Logistics Management 2ContentsIntroduction......................................................................................................................................3Logistics management of Zara.........................................................................................................3Comparison with Dell (Successful Company).............................................................................3Comparison with Myer (Unsuccessful Company).......................................................................4Identification of issues.....................................................................................................................4Recommendations for competitive advantage.................................................................................6Planning and control....................................................................................................................6Quality management....................................................................................................................6Inventory management.................................................................................................................7Lean synchronization...................................................................................................................7Capacity management..................................................................................................................7IT technologies and infrastructure...............................................................................................8Quick response.............................................................................................................................9Suitable for other company............................................................................................................10Conclusion.....................................................................................................................................10References......................................................................................................................................11List of figures Figure 1: Quick Response Process..................................................................................................9
Logistics Management 3IntroductionThis report mainly points out the logistics and supply chain management of fashion andretail industry in the given case of Zara. It is well known that the company Zara is able toachieve the growth and success in the operating market due to its effective logistics and supplychain practices. This report will point out the issues grounded on the case and will also providesome strategies related to supply chain to the company so that company will able to grow andattain a better market share. The company Zara was established by Amancio Ortega Gaona in1975. The main business of the company was to manufacture the products of fabrics which cansatisfy the needs and preferences of consumers in the market. By using active supply chainmanagement process, the company wants to focus on providing the best quality of cloths to itscustomers. Zara is successfully operating itself above from its competitors like Benetton, Gap,and H&M. This report considers the issues which are faced by the Zara in the market and alsoprovide logistics management strategies to get competitive advantage in retail world (Ferdows,2003). Logistics management of ZaraThe prime activities in supply chain of Zara are crafting, trading, manufacturing andproviding the product to the customers on time. To control the activities of its suppliers, Zara hasadopted vertically integrated supply chain. Zara believes that there should be various designsavailable to the customers in the market. In this manner the company launches new designs andproducts in its showrooms all over the world as new arrivals. With the continuation of formerstrategy, the company also tries to sell its products in the market as soon as possible. Both thestrategies lead to generate the curiosity among its customers. The company never used toadvertise its products as it believes to create a unique brand image of its products among itscustomers. The company also adds up the philosophy of serving its customers by keeping focuson their tastes and preferences according to their regions in its strategy. The company also has anumber of warehouses to store its clothes and to supply them to the market effectively andefficiently (Bisen & Srivastava, 2011).
Logistics Management 4Comparison with Dell (Successful Company)Dell is a successful company in terms of its effective logistics management. In the supplychain, customers place the order for the products and company provides the parts to thesuppliers. Suppliers supply those products to the customers. Dell has horizontally integratedsupply chain which is the key factor of its success. On the other hand, using vertical supplyChain Company is able to fulfill the demands of its customers easily where productionphilosophy of Zara always gives importance to new products and designs (Butler, 2015). Comparison with Myer (Unsuccessful Company)In case of Myer, the company does not divide the market into segments such asdemographic and psychographic lines of the customers and their demands. On the other hand,Zara has divided the market based on the demographic and lifestyle segmentation. The businessconcept of Myer with the logistics management is very unclear. Along with this, the customerservice of the company is unsatisfactory. Myer does not have well organized strategic plans forthe business operations. Zara supply its products from its headquarters which is situated in Australia. The stocksof the company are carried out to the Australian border and after it the logistics carriers takethem to the stores. If the sale of a particular product doesn’t reach the standard level the companystops the production of that product. By following this strategy the company is able to removeunnecessary products from the market.by using proper and effective communication techniquesthe company is able to cut down its cost and make the process of manufacturing easy(Gallaughar, 2008). Identification of issues It is well known that Zara is able to dominate the fashion industry all over the world byadopting new and innovative strategies every time. The company is also able to connect with itscustomers and designers by using effective communication system. Although there are some ofthe factors on which the company has to focus on to get success for long term. Since thecompany used to possess effective supply chain but now days customer’s preferences are moredynamic and are creating challenges to all fashion retailers (O'Marah, 2016). Some of thesechallenges are as follows-
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