Challenges and Key Factors in Omni-Channel Logistics, Zara's Vertically Integrated Supply Chain, and Resilience in Supply Chain

This report discusses the challenges and key factors in omni-channel logistics, Zara's vertically integrated supply chain, and resilience in supply chain. It highlights the importance of inventory visibility, transportation, and distribution network in logistics. The report also covers lean thinking, agility, velocity, visibility, and redundancy in supply chain management.

REPORT

Contents
Answer 1:.........................................................................................................................................2
Answer 3:.........................................................................................................................................3
Answer 6:.........................................................................................................................................4
References........................................................................................................................................5

Answer 1:
The omni-channel logistics enable the business to tailor on how the products are purchased and
delivered so that they can easily meet the demands of the customer. Some of the challenges that
business face are:
a. Lack of Inventory visibility and metrics: In this, the omni-channel logistics aim to know
the inventory status about the distribution center or the retail location. The company
looks forward for promising the next day delivery for the customers who are not able to
follow through. The companies, then, make use of the inventory visibility which is an
accurate forecast for the future demands and to plan about the supply chain activities
properly.
b. The poor visibility for the inventory in transit: The enterprise and the startups are
generally facing the poor visibility issue in inventory for a better transit.
c. Segmented Supply Chain Management: The larger companies have a private warehouse
where the distributed centers need to be managed by different in-house along with the
outsourcing operators that are running on the different set of systems. With this, the key
is also to resolve the supply chain segmentation which is to consolidate the processes.
d. The unreliability of order fulfillment processes (Hübner, Kuhn, and Wollenburg, 2016)
e. Finding the right way of transportation: Here, the major challenge is to find the effective
solution to transport the products without driving up the landed product costs. The
selection is important for the omni-channel logistics.
f. Reverse Logistics: The process of return could be for the products which seam to be
holding initial delivery. The customers are expected to be able to return the products that
they have purchased online. The companies do not offer the ease of return which is

unlikely to generate the repeated business (Saghiri, Bernon, Bourlakis, and Wilding,
2018).
g. The manual processes include one of the leading causes across the supply chain through
continued use of manual processes to capture the inventory data. The implementation of
WMS with the radio frequency and the barcode scanning is an important step for them.
h. The overlooking of the physical transformation and then implementing 3PL Strategy
allows the sharing of attention from analysts and technology companies alike. The
business need to care about the lose sight of the transformation. The 3PL is about the
operational manager which helps in providing the combination of capability that are
important when it comes to the inventory optimization.
Answer 3:
Zara success is completely depending upon the vertically integrated supply chain where the
designing, production, distribution and the retailing is integrated. The vertical integration of the
production system allows one to place the garments in the stores around the world for a time of
two to three weeks (Galipoglu, Kotzab, Teller, Yumurtaci & Pöppelbuß, 2018) .
The vertically integrated supply chain allows fashion designers to charge for the new designs of
clothing line. They select the most cost-effective fabric for the new designs. The designs are then
modelled and sent to the factor. The vertical integration is also for maintaining the cost and
speed where the local sourcing of raw materials, includes that the cutting costs is mainly because
they do not tend to outsource any channel. Hence, there is a possibility of mass customization
and low process cost to avoid conflicts which emerge from the different source of channels. The
increased revenue with faster time to market and extending product life will require 4-5 weeks
from conception to the distribution. The tailored products produce different designs with

increased revenue that reduces the discounts on product (Fernie & Sparks, 2014). The flexibility
is to respond to the changes as per the customer demands. Some of the key factors of supply
chain are:
a. Lean thinking and agility: The concepts are seen to be for company use of just in time
strategy. The company works on minimizing the waste in production through reducing
defects, inventory holding costs and production time. The maintenance of a larger volume
of production in-house is to make sure that the factories are able to reserve 85% of the
production with in-season adjustments.
b. Strategic Management: the inventory management with efficient business model and the
centralization helps in working according to concepts of Zara. The company employs
lean inventory with ensuring that all resources are maintained at a lean level from the
finished garments.
c. Strong Distribution Network: Zara has been able to establish and meet the supply chain
requirements, where the distribution network sustains the shipment and the deliveries of
the product (Wollenburg, Hübner, Kuhn, and Trautrims, 2018). The delivery of goods is
to the stores in Europe which is done in the time of 24 hours through using trucks and
shipments. The deliveries are made for the other American and Asian outlets that are set
in the time of 40 hours.
Answer 6:
Considering the on-line American Heritage dictionary, the resilience is about the ability to
recover from the 527 illness, change and misfortune. After the attacks from 9/11 of twin towers,
there are research on the supply chain security and the vulnerability. It is mainly considered as
one of the important factors to handle the supply chain disruption as the period of economic

effects is short and long. The important elements that affect the supply chain are flexibility,
agility, velocity, visibility and the redundancy (Melacini, Perotti, Rasini, and Tappia, 2018).
It has been seen that the flexibility helps the companies to correctly answer the market variability
and then use some factors. Some of them are the concurrent processes, final goods completing
postponement inside supply chain and the strategies sharing with the suppliers. The agility of the
company depends on the agility of actors that involves the supply chain where the velocity needs
to be interpreted where the time required for moving the goods with supply chain. This includes
the measured terms of lead times where the visibility is to focus on capability of company to see
the information, in regard to flow of products (Murfield, Boone, Rutner & Thomas, 2017). The
redundancy is about capacity augmentation and inventory in different nodes of supply chain. The
scientific research needs to be carried out in respect to the impacts of catastrophic events on a
supply chain contract with probability distribution of losses which are mainly caused due to such
events. There is a need to adopt a demand driven planning and business operating models which
is based on real time demand insights and demand shaping. The key is to foresight for leveraging
opportunities and mitigating challenging events so that business not only survives but succeeds
as well. There is a need to build an adaptative and agile supply chain with rapid planning and
integrated execution. The optimization of product designs and the product management is done
handling the supply, manufacturing and then improving the sustainability with accelerating
profitable innovation. The product innovation and competitive advantage stems from selection
and management of suppliers and technologies.
References
Fernie, J. and Sparks, L., 2014. Logistics and retail management: emerging issues and new
challenges in the retail supply chain. Kogan page publishers.

Galipoglu, E., Kotzab, H., Teller, C., Yumurtaci Hüseyinoglu, I.Ö. and Pöppelbuß, J., 2018.
Omni-channel retailing research–state of the art and intellectual foundation. International
Journal of Physical Distribution & Logistics Management, 48(4), pp.365-390.
Hübner, A., Kuhn, H. and Wollenburg, J., 2016. Last mile fulfilment and distribution in omni-
channel grocery retailing: A strategic planning framework. International Journal of Retail &
Distribution Management, 44(3), pp.228-247.
Melacini, M., Perotti, S., Rasini, M. and Tappia, E., 2018. E-fulfilment and distribution in omni-
channel retailing: a systematic literature review. International Journal of Physical Distribution &
Logistics Management, 48(4), pp.391-414.
Murfield, M., Boone, C.A., Rutner, P. and Thomas, R., 2017. Investigating logistics service
quality in omni-channel retailing. International Journal of Physical Distribution & Logistics
Management, 47(4), pp.263-296.
Saghiri, S.S., Bernon, M., Bourlakis, M. and Wilding, R., 2018. Omni-channel logistics special
issue. International Journal of Physical Distribution & Logistics Management, 48(4), pp.362-
364.
Wollenburg, J., Hübner, A., Kuhn, H. and Trautrims, A., 2018. From bricks-and-mortar to
bricks-and-clicks: Logistics networks in omni-channel grocery retailing. International Journal of
Physical Distribution & Logistics Management, 48(4), pp.415-438.