Logistics Management at ZARA | Study

Running Head: LOGISTICS MANAGEMENT AT ZARA
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LOGISTICS MANAGEMENT AT ZARA
1/6/2020

LOGISTICS MANAGEMENT AT ZARA 1
Contents
Zara Company’s network structure............................................................................................2
Upstream network of Zara.........................................................................................................2
Downstream network of Zara.....................................................................................................3
Transportation in both inbound and outbound networks...........................................................4
Value co-creation in operations.................................................................................................5
Marketing channel network using technology...........................................................................7
Supply chain dimensions (Circular Economy and Industry 4.0)...............................................9
Recommendation for the sustainability in their supply chain..................................................11
References................................................................................................................................15

LOGISTICS MANAGEMENT AT ZARA 2
Zara Company’s network structure
Upstream is the source network of business dealers and their own suppliers. (Geissdoerfer,
Savaget, Bocken, and Hultink, 2017). It is important for the retailing companies to maintain
both upstream and downstream network partners respectively. So in this report the upstream
and downstream network of Zara has explained.
The upstream network of Zara
The company Zara has 2 or 3 Network tiers of suppliers. Zara is a famous fashion brand so
they have a focus on the 2nd and 3rd tier cities. China has the largest international market for
the company Zara. The company Zara has 12 suppliers currently which are operating in the
different countries. The company Zara is operating the 345 stores so its suppliers are world
widely to distribute the brand (Wilhelm, et al., 2016). Zara is one of the good know company
which is vertically and strongly integrated into the clothing industry and it also maintains
significant upstream production of clothing along with the textile production.
The central warehouse of the Zara is in Spain where there are the four distribution centres and
every single brand of Zara passes through there only. Company Zara has the 3PL and 4PL
logistics providers as the core competency of the company focus on outsourcing things
(Mehrjoo and Pasek, 2014). Zara has vertical integration production as they introduce the
new products as well as design and manufacture them also. The supply chain management of
the Zara also includes collaboration and coordination which helps in building trust with the
different channel partners.
Example: Company Zara with the help of the upstream networking it becomes easy to access
the local ISP. With the help of the internet access the company Zara can easily make the data
connection between the two ISPs. The company Zara deliver the effective products to their
customers with the help of this networking as it delivers the raw materials to the finished
products. The products of Zara are highly demanded in the market as they have the unique
business model and the low cost retailer. Supply chain networking helps in increasing the
desirability with the cheaper cost.

LOGISTICS MANAGEMENT AT ZARA 3
Source: theatlas.com
The downstream network of Zara
The downstream supply chain management refers to the coordinating flows of the goods and
information with the customers and the clients. It contrasts the upstream SCM which involves
the buying activities with the suppliers (Geissdoerfer, et al., 2017). The important
downstream activity is the management of inventory, the distributors, retailers and the
wholesalers, all of them strive to carry inventory in quantities which are needed to fulfill
customer orders without overstocking.
Tier 1 is used in the downstream network structure of the company of the Zara. The target
market of Zara is the young people and the people who are trendy in terms of fashion. The
proposed objective function is the new model of the existing distribution network. The
competitive advantage is achieved through the globalization strategy as the company is doing
outsourcing so globalization helps in developing an international scale. The globalization
plays an essential role in the supply chain of the Zara Company as it pushes the supply chain
market of global and the domestic market (Holweg and Helo, 2014). The lower prices and
consumer convenience are given to the company Zara through the effective global supply
chain.
Distribution synchronization of the company Zara is done with the computerized system. All
the information flows through the mail. In the real-time of the company Zara, the information
is collected and analyzed by the company Zara in the computerized system. The vertical
integration is there in Zara and they also used reverse logistics so that they can make business