Comprehensive Report: Zalora's Supply Chain and Sustainability

This report provides a comprehensive analysis of Zalora's supply chain management. It begins with an overview of the company, highlighting its e-commerce operations and market presence. The main body delves into Zalora's supply chain, tracing the journey of products from origin to the customer, and examining the logistics involved, including the use of RFID technology and lean strategies. The report then explores the linkage between Zalora's activities and relevant theories, such as lean management and six sigma. Furthermore, it investigates Zalora's sustainability initiatives throughout its value chain, including the use of electric vehicles and partnerships to reduce carbon emissions. The report concludes by summarizing the key findings and emphasizing the importance of effective supply chain management and sustainability in Zalora's business model.

SUPPLY CHAIN
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Overview of company..................................................................................................................1
Supply chain management from origin to different customers....................................................2
Linkage between Company activities and LB5230 theories........................................................4
Sustainability throughout the value chain....................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Supply chain management is basically the management and controlling of the movement
of various goods and products and also includes the procedures which converts the basic
material into finished products. It normally involves streamlining the supply activities of
business in order to maximize the customer satisfaction and attain the competitive advantage
within market. Zalora is one of the well known online retailer in fashion established by in 2012
and placed in Singapore. It usually addresses the fashion products of both men as well as women
including footwear, beauty essentials and wide variety of accessories. The company has added
more than 30000 products in the online platform and other new products with its expansion in
more than 5 countries including Singapore.
This report gives a brief about the overview of company, Supply chain management from
origin to different customers, Relationship between LB5230 theories and activities of company,
Sustainability all over the value chain.
MAIN BODY
Overview of company
Zalora is basically an e-commerce company which mainly deals in fashion online
established by Kinnevik AB and Ruben Stappers in 2012 and placed in Singapore. The main
founders of this company has built it on the basis of learning from most of the successful
businesses dealing in e-commerce in US. The company has gained the access successfully to
numerous countries within south East Asia (Chen, Preston and Swink, 2015). Rocket internet, an
internet company based in German is the main creator of company Zalora and other companies
based in Asia.
Zalora was being launched with a foundation in Vietnam in 2012 and since then it is
headquartered in Singapore and is currently operating in wide geographies like Philippines,
Indonesia, Thailand etc. Rocket internet introduced its operation with intensively undisclosed
capital amount and since then, Zalora has grown over 300 million US $ in 2014. Founders of this
company has launched a large number of start-ups over few years and sold them successfully to
their competitors such as eBay and Groupon. More than 26% of the revenues of Zalora is
generated via mobile app. Recently, company is heavily investing to become an emerging
market leader of South Asia in online fashion. Zalora offers a diversified range of 600
international as well as national designers along with brands. The mission of this company
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encompasses commitment to provide a dynamic and ever evolving business environment to
passionate customers. In 2015, Zalora partnered with the world's top designers like Melinda
Looi, Rizalman who worked for Zalora by creating the collections for it. Besides this, the
company entered in the partnership with Globe Telecom, Topshop Topmanand Sephora. In
2012, Zalora started its remarkable facility of return policy within 30 days together with the fast
deliver (Azadi and et.al., 2015). For the ease of customers, the company introduced various
payment methods such as MasterCard, VISA, PayPal. In 2014, Its revenue was about 117
million US which was an increment of around 70% from previous years. Now, the company has
completed around US$238 million within three funding rounds in order to flourish in Asia. Apart
from this, Its main funding sources are JP Morgan, Scopia Capital and other ventures.
Illustration 1: Ezra women wear
Supply chain management from origin to different customers
The supply chain and logistics management of Zalora is imperative where the company
uses lean strategy in order to reduce the waste and create an optimized process of supply chain.
The logistics management of Zalora is highly imperious. The products within warehouse are
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either tagged with different barcodes or with a RFID chip. Then the products in inventory are
easily managed and upgraded on inventory platform which eventually provides inventory
management from end to end. Inventory of Zalora is maintained by WMS and is thus integrated
on online platform. This helps in the transparent flow of information via system and customers
are instantly notified about the product which no longer exist (Supply chain management, 2019).
Through RFID on different products, inventory are updated even from the farther distance along
with better accuracy (Sauer and Seuring, 2018). The logistics management monitors the quantity
status of inventory at each and every level and ensures that the information is thoroughly passed
via levels of supply chain. Zalora uses RFID chips in such a way that it can be placed in every
direction. When antenna scrutinize the area, WMS updates the data and information of inventory
thus resulting in effective management of logistics.
The supply chain of Zalora comprises the suppliers of third party who represents the
products which are being sold with online stores. Company, before shipping look out for the
starting manufacturing process as well as the storage of various products. For optimizing the
process, company looks for the cost of various resources which will go in delivering the product
to customers. Besides this, the delivery services of Zalora are are highly structured and well
defined where the payment is processed via Zalora online platform. To decrease the cost as well
as present a great sustainable model, Zalora launched delivery through 7/11 stores and Singpost
stations which basically are the postal lockers through which customers can take their parcel
immediately after dropping (Geng, Mansouri and Aktas, 2017). The process of supply chain
includes various steps which are highly optimized and reflects upon the profit distribution.
The online platform of Zalora receives the notification whenever customer submits the
order. This in turn, triggers the smooth delivery process wherein the nearest supplier and
warehouse receives the order from the platform then they pack and finally submit the goods or
products. Delivery time varies from country to country and will correspond to the country where
order is being placed. The strategies used by Zalora for the transport in supply chain are highly
significant where they generally employ less delivery vehicles which eventually represents a
eco-friendly and sustainable strategy (Esfahbodi, Zhang and Watson, 2016). Zalora has recently
invested in establishing its own consistent delivery services as well as warehouse thus
strategizing the capacity of warehouse, and optimal utilization of supply chain.
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Linkage between Company activities and LB5230 theories
In the context of Zalora's activities and strategic resources and operations management, it
can be said that it gives it several benefits through the applications of information technology to
the supply chain management. In its supply chain management it mainly focuses on the
downstream fulfilment channels of Zalora. Its strategies and IT helps it out in accomplishing its
strategic goals (Pradana and Novitasari, 2017).
This online retailer company is provided with responsible delivery drivers. For making a
sustainable delivery, they collect all parcels from Zalora's warehouse depend on those zone, they
are responsible for. After collecting parcels they move towards in their known and specified
locations to provide parcels to customers. Allocation of locations to drivers is being distributed
as per their skills and knowledge. It is called direct couriers service. By applying six sigma, it
can analyse data on each step via supply chain.
7-Eleven collection store is other effective way of supply chain and operational
management. According to this model, TA-Q-BIN collects al, parcels from warehouse and then
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Illustration 2: Supply chain management

delivers it to the defined 7- eleven store. Parcels are being delivered to customers' door step
where they make payment. Undeliverable items are returned to warehouse. By making an
effective use of lean strategy in order to minimize wastes in its process. Delivery time as well as
payment method depends on and vary according to country. Some countries allow cash on
deliveries, whereas, some countries allow credit card and online payment (Vijayaragavan,
Ponnusamy and Arramuthan, 2018).
For making its activities and supply chain process sustainable and effective, its all
products are being tagged either with a barcode or an RFID chip in its warehouse. All products
and inventories are managed by warehouse management solution in order to give an effective
and transparent informations to customers. All its products which are sold on online store, most
of them are represented by 3rd party suppliers.
On the other hand, there are some risks are included in the supply chain process. The
main factor that can affect all activities of Zalora is natural disaster, power disruption and loss of
staff at warehouses. It has greater negative impacts on all activities in the company as it can
decrease sales and productivity as well.
So, it can be said that its all activities or supply chain is related with some theories like
lean management, six sigma etc. From the informations it can be said that there is a link between
its activities and operational management theories. In addition, and for better improvement it can
be suggested to Zalora that it should focus on just in time fulfilment model.
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Illustration 3: Private label Ezra of Zalora
Sustainability throughout the value chain
In the context of value chain and sustainability of Zalora, E-retailer, it can be said that its
all products and brands which is being served by this company such as: Nike, Adidas, Levi's, are
on the site in all regions. It has experimented already with temporary pop-up stores that allows
its global customers to try out dresses, accessories and shoe. For fast delivery to global
customers, it makes an effective use of Sing Post, Pop Station. Pick own parcel station allows
this E-retailer to post parcels of customers, collect as well as make payments for parcels any
time. As it is already stated that it serves globally and provides Nike, Levi's and others brands,
so, it is important for it to make a good brand image and increase customers satisfaction. Pop
Station provides higher customer's satisfaction which is beneficial for customers and the
company as well. It has lower delivery charges and lower carbon footprint way (Abdullah and
Hilman, 2015).
Rather than this Pop station model, Zalora strategies to operate with electric vehicles
rather than fuel vehicles with the main aim of decreasing the carbon emission in all those cities
in which it operates. It offers approximate 400 brands, so it becomes difficult for this retailer to
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make sure that suppliers are delivering the same products and on the same time based on
sustainable strategy. By developing and expressing corporate social responsibility strategy to its
suppliers it can make aware to its all potential customers about sustainability. By doing this it
can increase sales because customers prefer to purchase products from those companies who
support sustainability. It is reported that approximate 2 million users access online stores.
Further, it is also stated that Zalora has launched its own private label Ezra. This brand
will be sold on Zalora, starting with the Singapore site. For making, it more sustainable, Ezra
label is being applied to all products before selling them on the online store. Some suppliers also
add this label on products before sending it to Zalora's warehouse. It is more focusing on supply
chain management and warehouse for making its business more sustainable (Cheng, Fu and Lai,
2018). It is also using an effective decision models that are being used to up sell as well as cross
sell products to customers. So, it can be said that its all strategies in regarding supply chain like
creation of Pop-up stores, Mobile Apps, off site stores plays an important role in developing
sustainability. On the delivery side also, Uber and Zalora plan work together on its deliveries. It
can provide it a competitive edge in the Asian market by attracting wider range of customers.
CONCLUSION
From the above study it has been summarized that supply chain management and
strategies for managing this management played a vital role. It has shown about infrastructure,
importance of warehouse and its management, resources and suppliers and all the activities
which are included in the process of supply chain management. Further it has also discussed
sustainability as why it is so much important for retail industry to develop. With the hep of
supply or value chain it has shown development of sustainability. Six sigma, total quality, and
just in time approaches also played an important role in the process Of value chain management.
It helped an organization in maintaining a balance between demands and supply of inventories
and increase customers loyalty.
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REFERENCES
Books & Journals
Abdullah, S. S. and Hilman, H., 2015. E-Strategy Adoption and Implementation: Re-examining
the Concept. ADVANCES IN GLOBAL BUSINESS RESEARCH Vol. 12, No. 1, ISSN:
1549-9332, p.723.
Azadi, M and et.al., 2015. A new fuzzy DEA model for evaluation of efficiency and
effectiveness of suppliers in sustainable supply chain management context. Computers
& Operations Research. 54. pp.274-285.
Chen, D. Q., Preston, D. S. and Swink, M., 2015. How the use of big data analytics affects value
creation in supply chain management. Journal of Management Information Systems.
32(4). pp.4-39.
Cheng, P., Fu, Y. and Lai, K.K., 2018. Supply Chain Risk Management in the Apparel Industry.
Routledge.
Esfahbodi, A., Zhang, Y. and Watson, G., 2016. Sustainable supply chain management in
emerging economies: Trade-offs between environmental and cost performance.
International Journal of Production Economics. 181. pp.350-366.
Geng, R., Mansouri, S. A. and Aktas, E., 2017. The relationship between green supply chain
management and performance: A meta-analysis of empirical evidences in Asian
emerging economies. International Journal of Production Economics. 183. pp.245-258.
Pradana, M. and Novitasari, F., 2017. Gap analysis of Zalora online application: Indonesian
users' perspectives. International Journal of Learning and Change. 9(4), pp.334-347.
Sauer, P. C. and Seuring, S., 2018. A three-dimensional framework for multi-tier sustainable
supply chain management. Supply Chain Management: An International Journal. 23(6).
pp.560-572.
Vijayaragavan, P., Ponnusamy, R. and Arramuthan, M., 2018. Sociopsycho-Economic
Knowledge-Based System in E-Commerce Using Soft Set Theory Technique. In
Information Systems Design and Intelligent Applications (pp. 10-19). Springer,
Singapore.
Online
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Process of supply chain management. 2019. [Online] Available Through:
<https://bohatala.com/zalora-supply-chain-operations-management-project/>.
Supply chain management. 2019. [Online] Avaialble through:
<https://www.oracle.com/in/applications/supply-chain-management/>.
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