Operations management in a fashion organisation

RUNNING HEAD: OPERATIONS MANAGEMENT 0 OPERATIONS MANAGEMENT 2 OPERATIONS MANAGEMENT Introduction 2 Company profile 2 Zara Fashion 2 McDonald 2 Supply chain management 2 Supply chain process 4 Zara 4 McDonald 5 Conclusion 6 References 7 Introduction Operations management is the management of business practices to create the higher possible efficiency within an organization; this helps the company in increasing the revenue (Mahadevan, 2015). Supply chain management The supply chain management strategy of Zara and McDonald is agile it means managing the supply chain in such

RUNNING HEAD: OPERATIONS MANAGEMENT 0
OPERATIONS MANAGEMENT

OPERATIONS MANAGEMENT 1
Table of Contents
Introduction......................................................................................................................................2
Company profile..........................................................................................................................2
Zara Fashion.............................................................................................................................2
McDonald.................................................................................................................................2
Supply chain management...............................................................................................................2
Supply chain process....................................................................................................................4
Zara...........................................................................................................................................4
McDonald.................................................................................................................................5
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

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Introduction
Operations management is the management of business practices to create the higher possible
efficiency within an organization; this helps the company in increasing the revenue (Mahadevan,
2015). In this report the operations strategy, a supply chain management as well as sustainability
objective of Zara Fashion and McDonald is discussed.
Company profile
Zara Fashion
Zara SA is a Spanish apparel retailer based in Galicia; it was founded in the year 1975 in Spain.
It is considered leading company in the Inditex group. However, since 2017, Zara manages up to
20 clothing collections in a year. The company is in the retail industry; presently the company
has 10,000 stores worldwide. In 2019, the income of the company in the financial year was 3.44
billion euro (Zara annual revenue, 2019).
McDonald
McDonald's Corporation is well-established fast food company of America; it was founded in the
year 1940. The Company is the world’s leading restaurant chain. The headquarters of company
are in Chicago, US. In 2018, it serves over 69 million consumers in daily basis over
100 countries across 37,855 outlets. The company is in the restaurant industry, in the year 2018
the revenue of McDonald was $21.05 billion (McDONALD’S ANNUAL REPORT, 2018).
Supply chain management
The supply chain management of Zara and McDonald is agile it means managing the supply
chain in such a manner so that the distribution of the product in each step is concerned with
doing the correct things at correct time, saves the cost, being responsive to the demands
prevailing in the market, maintain high flexibility as well as keeps the higher productivity.
However, both the companies adopt the different strategies for supply chain management, so that
the value of customers increases and the profitability as well as market share of the company
raises. Zara adopts various strategies while distributing the quality product to the final consumer.
Zara used the supply chain strategy of vertical integration, in which company produces clothing
in bulk this helps the company in expanding the new product. However, McDonald’s framework

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lays on a straightforward 'win-win' suggestion for all gatherings, which includes its
representatives, the proprietor/administrators that run the eateries, and its store network
accomplices (Talhaoui et al., 2019).
To forecast the long term as well as short term demand of the consumers Zara adopts the strategy
of regression that demonstrates the earlier demand through the dummy variables for the
particular events in comparison to McDonald; it adopts the determining application which is
JDA Manugistics 7. This helps the company in consistently assess and report information about
the demand of the customers. The application also provide the Day by day purpose of-offer
(POS) information at thing level, the item list, stock levels at the cafés, stock and shipments as
well as distribution center of the company is also considered an important aspect to forecast the
demand of customers (Rutkowska et al., 2018). Zara achieves the sustainability objectives while
managing the supply chain that is it remove the hazardous chemicals through the supply chain as
well as cuts the fiber which comes through the ancient forest (Remy et al., 2016). However, in
the supply chain McDonald use the ingredients which are of higher quality as well as encourage
the sustainable sourcing.
Zara for developing the product adopts the strategy of fast production in which company
manufacture as well as finish product within four to five weeks through this it is faster for the
company to get the designer- influenced product (Mhugos, 2015). Zara also use the strategy of
permanent product as well as the temporary product strategy whereas McDonald’s adopts the
changeless product strategy. This strategy of temporary product, it also uses other strategies
which includes strategy of developing the product locally and the local conversion strategy (Anaf
et al., 2017). McDonald also use the strategy of self-order kiosks, this helps the customers to add
more of the items in the order.
Zara has been call over the popular operator of the supply chain over the years over their
competitors in the fashion industry. It is because of the various activities, and qualities which
lead in effective management of supply chain that is most of Zara's lines are planned and made
in-house where the suppliers find close near the producing plat of the company. However, to
minimize the waste the company utilizes the just-in-time logistics as well as replenish channel
for the lower but regular shipments (Park, 2018). The company keeps the optimum level of
stock, so that it will deliver to the customer in timely manner for this Zara adopts the approach of

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just-in-time. In comparison to Zara, McDonald in the year 2016, the company is in the 2nd
position for managing the supply chain. However, it is achieved by the company because it
manage the supply chain by focusing on five principles which are making the long term business
contract, trusting their suppliers for delivering the products according to the standards of quality,
value as well as cleanliness (McDonald's Supply management , 2019). The company also makes
the principle of developing the results which can be measurable, adopts the model of pricing that
is providing incentives, establishing the peer to peer relationship. This leads in increasing the
customer value by delivering the product in timely manner as well as also increases the revenue
of McDonald that is in the year 2016, the revenue of the company was $6.42 billion.
Supply chain process
Zara
Source: (Mhugos,
2015)
The cube of Zara
distribution center is
464,000 square meters,
the raw materials
moves from cube as well as
the end product also passes from the cube. Monorail system is used by Zara to move the product
in the stores for shipping, this leads in marinating the high flexibility (Aabed, 2017). The
company recruited up to 3,000 workers in the manufacturing as well as operations department, so
that product will be manufactured in high quality according to the needs and demands of the
consumers. However, 26% of the product for Zara is produced in Spain, other 26% in Europe as
well as other 24% in Africa. The stores take the order in two-three times on the weekly basis, it
received within the 2 days from the order place (Aftab et al., 2018). The items is an already
completely ready with the price tags, this will help the company in providing the quick delivery
to the customers according to the requirement of the consumers on the weekly basis. However,
for managing the supply chain in effective manner, Zara us the model of Good mental because

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company believes that supply chain management cannot only done through making innovation, it
believes that it can be managed by providing the training to its staff members.
McDonald
Source: (McDonald's Supply management , 2019)
In comparison to Zara, McDonald’s also uses the strategy of vertical integration, this strategy is
adopted to keep the profits of the company higher as well as cost lower. The company recruited
one million competent staff members annually; it is also the reason of McDonald succession
(McDonald's Supply management , 2019). The supply chain is managed under the interest
model, it is considered the model in which the suppliers, dealers obtain higher part of proverbial
pie by conducting the business by McDonald. The company function of the approach of working
together, the company believes that the dealers as well as business should generate the value by
working together. However, for managing the supply chain in effective manner, the company
adopts the approach of the three-legged-stool; this is adopted to increase the trust among the
suppliers through the winning strategy (McMurtrey & Rowley, 2016). In this every franchise of

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the company depends on the other franchise for the succession. McDonald for making the supply
system dynamic use what’s in it for we approach, this approach helps the company in earning the
greater profits by keeping the cost lower.
Conclusion
From the above it is conclude that Zara specializes in trends, rapid fashion as well as offer
products such as accessories, beauty, perfumes as well as clothing. However, McDonald
Company is the world’s leading restaurant chain. From the above it also concludes that both
initiatives in the supply chain management. However both adopts the agile supply chain but
adopts differentiation in the strategies that is Zara use the Good mental model whereas
McDonald uses the interest model.
References
Aabed, A., 2017. Supply Chain in the Readymade Garments Industry: Zara Case Study.
International Design Journal , 26, pp.1-9.

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Aftab, M.A., Yuanjian, Q., Kabir, N. & Barua, Z., 2018. Super Responsive Supply Chain: The
Case of Spanish Fast Fashion Retailer Inditex-Zara. International Journal of Business and
Management , 13(5).
Anaf, J. et al., 2017. Assessing the health impact of transnational corporations: a case study on
McDonald’s Australia. Globalization and health, 13(1).
Mahadevan, B., 2015. Operations Management: Theory and Practice. London: Pearson
Education.
McDONALD’S ANNUAL REPORT, 2018. McDONALD’S CORPORATION. [Online]
Available at: https://corporate.mcdonalds.com/content/dam/gwscorp/investor-relations-content/
annual-reports/McDonalds_2018_Annual_Report.pdf [Accessed 28 September 2019].
McDonald's Supply management , 2019. McDonald’s Supply Chain Management is The Secret
to Their Success! [Online] Available at: https://boxaroundtheworld.com/mcdonalds-supply-
chain-management/ [Accessed 27 September 2019].
McMurtrey, M.E. & Rowley, B., 2016. McDonald’s and the Triple Bottom Line: A Case Study
of Corporate Sustainability. Journal of Strategic Innovation and Sustainability , 11(1).
Mhugos, 2015. Zara Clothing Company Supply Chain. [Online] Available at:
https://www.scmglobe.com/zara-clothing-company-supply-chain/ [Accessed 27 September
2019].
Park, D.-J., 2018. The Method of Structuring Production Logistics Systems in Smart Factories of
SMEs. International Journal of Advanced Science and Technology, 118(1), pp.119-30.
Remy, N., Speelman, E. & Swartz, S., 2016. Style that’s sustainable: A new fast-fashion
formula. McKinsey & Company, pp.1-6.
Rutkowska, A., Shimshek, D.R., Sailer, A.W. & Dev, K.K., 2018. EBI2 regulates pro-
inflammatory signalling and cytokine release in astrocytes. Neuropharmacology , 133, pp.121-
28.

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Talhaoui, M.A., Daif, A., Azzouazi, M. & Oubrahim, Y., 2019. A Gamified Recommendation
Framework. International Journal of Engineering & Technology, 8(1), pp.73-77.
Zara annual revenue, 2019. Zara owner posts higher annual revenue and profits. [Online]
Available at: https://www.independent.ie/world-news/zara-owner-posts-higher-annual-revenue-
and-profits-37908654.html [Accessed 27 September 2019].