Operations Management: Zara vs. Marriott - A Comparative Report

This report provides a comprehensive analysis of the operations and supply chain management strategies employed by Zara, a fashion retailer, and Marriott International, a hospitality company. It begins with an overview of both companies, detailing their supply chain structures and operational approaches. The report then contrasts and compares the supply chain management of Zara and Marriott, highlighting key differences and similarities in their approaches to procurement, logistics, and customer service. Furthermore, it explores potential improvements for both companies, suggesting strategies to optimize their operations. The report also examines potential issues that can impact the effectiveness of supply chains in both the service and manufacturing sectors. The report concludes with a balanced scorecard framework analysis to improve operations at Zara and Six Sigma framework analysis to improve operations at Marriott.

Running Head: OPERATIONS MANAGEMENT 0
Operations Management
Zara and Marriott
Student’s Details
9/17/2019

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Executive Summary
The following report discussed the supply chain of the service industry and product industry. The
following report has chosen Hotel Marriott as the Service Company and Zara fashion as the
Product Company. The first step of the report highlighted the information of both companies and
explained the supply chain of both companies. After this, report compared and contrasted the
supply chain of Marriott and Zara. After the comparison, Report suggested that how both
companies can improve their supply chain management. The report also analyzed the many types
of issues which can impact the effectiveness of supply chain of both service and manufacturing
organizations.

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Contents
Introduction.................................................................................................................................................3
Supply Chain Management.........................................................................................................................3
Zara Fashion Retailer...............................................................................................................................3
International Marriott..............................................................................................................................4
Contrast and Comparison between the Supply Chain Management of Zara and Marriott.......................4
Improvement in Operations management of Zara........................................................................................6
Improvement in Operations management of Marriott..................................................................................7
Conclusion...................................................................................................................................................8
References List............................................................................................................................................9

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Introduction
Supply chain management is an important function of every company whether it is a service
company or product company. The following report will discuss the supply chain management of
Zara and Hotel Marriott. Zara is a Spain based fashion retailer company which provides latest
fashion trendy outfits and accessories. Its parent company is the Inditex group that is the largest
fashion retailer of world (Inditex, 2019a). Marriott International is one of the leading hospitality
companies which provide luxury and classy stay at the best locations of world. It has hotels at
most of the popular places in world (Harris, 2017).
The following report will highlight the supply chain management functions of the Zara and
International Marriott as well as it will discuss how both companies can improve the operations
of the company.
Supply Chain Management
Supply chain management includes the raw materials that manage the flow of goods and services
and turn them into end products. This commercial offer includes the activation of activity on
maximizing customer value and the market for a competitive advantage (Farooque, et al., 2019).
Zara fashion retailer is the company of product industry and International Marriott hotel is the
company of service industry. Both companies have different type of supply chain.
Zara Fashion Retailer
Zara changes the design of its clothes on average every two weeks, while the competition
making the changes in every two or three months. It is providing around 11, 000 items per year
in thousands of stores worldwide, which carries 2000 to 4000 products per year in its stores. The
highly sensitive supply chain of Zara is at the core of its commercial success. Company
executives are always on the lookout for new fashion trends at social gatherings. New items can
be designed to store 4-6 weeks and for existing items can be replaced in two weeks. The main
target market of the company is the age group from 24 to 35 years and customers who want to be
trendy. The stores of Zara mainly located in the urban areas and with the help of this strategy,
Zara reduced its cost of supply and advertisement (Inditex, 2019b).

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Zara prices its clothing according to customer demand, not the cost of manufacture. Zara spends
money on opening new stores instead of spending money on more advertising campaigns. To
prepare the trendy and fashionable garments, Zara purchases large quantities of some type of
clothing from Italy, Spain, Portugal, and Greece. Zara designs the garments and related dying
and cutting in-house. Inbound logistics from different suppliers done through the trucks (Inditex,
2019c).
International Marriott
Last year, Marriott International became the largest hotel company on the international level,
when it completed worldwide acquisitions of Starwood Hotels and Resorts. The securities
proceeded to add about 1,300 hotel establishments at the Marriott in 100 countries, making it
more active 5700 properties with 11 million units worldwide for $ 14 billion transactions.
The company has more than 400 international agreements of purchasing with suppliers and each
supplier has a contract of two to three years. Starwood calls the acquisition and a more
comprehensive settlement. Marriott renegotiated Starwood and several contractual suppliers
merged into a single agreement. For example, LG and Samsung TV that included contracts with
both hotel groups and providing display screens. In more than 110 countries, with the acquisition
of Starwood, Marriott now operates more than 5700 properties or franchises and 1.1 million
rooms, as well as representing 30 brands in the luxury tiers (Marriott, 2019).
Contrast and Comparison between the Supply Chain Management of Zara and Marriott
Be it a manufacturing company or a service company, the goal of every company is to satisfy its
customer. The design of supply chain in Product Company is focused on the physical products
whereas service industry has fewer requirements of physical products other than supplies in
offices, and mostly it works with the smaller group of suppliers ( Li, 2011).
In the context of Zara and Marriott, both companies require need labor input to fulfill the
essential needs to deliver on their promise to customers. In addition, Marriott and Zara need
input from a wide variety of suppliers. At the final point, both organizations need to invest in the
required tools that allow them to work their employees. In terms of the organization of Zara and
Marriott, the biggest investment in Zara is the need for machinery and equipment, along with the

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investment in transportation, labor, and manipulation. Whereas Marriott has to invest only in
developing a relationship and find dedicate labor (Christopher, 2011).
Zara’s supply chain management traditionally emphasized physical materials logistics in terms
of moving from one place to another. According to the size and weight of the objects of Zara,
when they are sent from one place to another, this distance and weight leave an impact on the
value of the objects of Zara (Ferdows, et al., 2015). Mostly Marriott invested in financial sectors
apart from some sheets and tissue papers, no other type of product is physically supplied from
one place to another in this organization. On the other hand, Zara fills the product in the
container at a concession rate to better ship its products. If this price is high then the price of its
product also increases by the same proportion. While Marriott hotels only have to change their
software, there is also a need to increase the flow of communication (Harris, 2017).
Almost the logistics for manufacturers is to take into account the dynamic items place in place
and of course cost by size and weight. In the service sector, this would be of no consequence
because it is not about the objects around them, but the information. It would not require a single
shot around the products, but finding the best channel to convey information. Thus, on the
construction side of things, one should find the best rates for shipping warehouses in containers
or less expensive, while the service industry is looking for ways to reduce costs and improve
their servers and invested labor (Starr, 2017).
Zara prepares their trendy garments with the raw material and garments have been totally
transformed from the raw fabric to a form that is ready to sell to the customer whereas Marriott is
providing luxury room and stay for customers. To fulfill the requirements of customers, Marriott
needs some physical products such as bed sheets, towels, mattresses, tissue papers, soaps,
shampoos and many more. Hotel bought these things from different suppliers on contract basis.
Fashion retailer ZARA chain optimization, supply is mainly achieved by increasing delivery
speed and reducing costs. To negotiate for a better price on what the company does less work on
physical barriers and supplies, and raw materials. Moving the components or manipulating that
production is a fast and main way to boost the speed of production. While the main place in the
service model is related to its adaptation as well as its work information flow and its basis is
relationship flow. By partnering with companies whose strengths complement their own, a

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corporation can reduce costs. By removing virtual barriers caused by identical approval loops or
other non-physical delays, Hotel Marriott may notice the same target as the fashion retailer Zara:
a low-cost end product delivered more quickly to the customer.
Improvement in Operations management of Zara
Operations management is a process to manage every single work or operation of the business.
In these days, every person wants to be trendy. To operate the business successfully, Zara has to
manage three main criteria which are time overtaking, decreasing inventory and increasing
resources which company used. Company can use the Balanced Scorecard Framework to make
improvements in the operations management of Zara. This framework was developed by the
David Norton and Robert Kaplan and it is a framework to execute the strategy. It has four
perspectives which can help company to improve the operations. First is financial perspective in
which Zara can evaluate and control the cost of operations. The task of operations management
of Zara is to reduce operating costs, which reduces purchasing costs. For example, fashion
houses require a long-range of latest fashion clothing to avoid high inventory costs. Producers
depend on the logistics and operations to deliver materials to artisans of fashion stores to avoid
material shortages that would cease production. For example, a delay in unexpected parts
shipment causes a fashion house to suffer a huge loss and may cost millions of dollars per day in
wages. To avoid all these problems, operations management makes all the products available on
time, which reduces the cost of production (Fearne, et al., 2012).
Second is Internal Perspective in which Zara can fulfill the customer desires to make
improvement in skills of employees. Customers are expected to have the right product
assortment and quantity delivered from Zara. The main objective of Zara is to promote customer
service and customer service is an important part of the operations of the company. Customers
expect the products to be available at the right location. Third perspective is customer
perspective in which company can solve the problems of internal as well as external customers.
Customers also expect from Zara that products will be delivered on time. Zara also has to pay
attention to the right to support after the sale. Customers expect the products to be served
quickly, for example, customer satisfaction is reduced when summer clothes are made available

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in the winter and out-of-fashion clothes are sold in showrooms, saying new fashion (Fry, et al.,
2015).
Forth perspective is learning and growth in which Zara can improve skills and capabilities of the
employees and company. To improve all the operations of the company should give special
training to the all employees of Zara. It can help to learn techniques to satisfy the customers and
also helps to grow the business. The balanced scorecard framework was also used by the GE to
develop the measures of performance of decentralized business units. The framework helped
company to understand the financial perspective to control the cost and increase the productivity.
To implement this framework, company measured the performance by eight metrics;
profitability, market share, productivity, product leadership, public responsibility, personnel
development, employees attitudes and balance between short range and long range objectives.
With the help of all these things, company implemented this framework successfully and
company also improved their operations (Kaplan, 2009).
Improvement in Operations management of Marriott
International Hotel Marriott can improve its customer service which is an important part of the
operations management. Provide the high class and comfortable services to customers are part of
the operations of Marriott. Build a foundation for operations management in the service industry
is critical to the implementation of activities in the region. To make improvement in the
operations management of Hotel Marriott, Company can use Six Sigma framework which
follows the DMAIC model which helps to improve the quality and reduce the problems.
First phase of this framework is defines the problem and the objectives. The biggest problem
which is facing by the customers of Hotel Marriott is poor servicing. To improve the quality of
the servicing of Marriott, it is very important for the organization to require an understanding of
positive customer satisfaction in the external environment. Customer satisfaction is very
important to maintain the reputation and goodwill of Hotel International Marriott.
Second phase is how to improve the quality. In the context of Hotel Marriott, human interaction
is very important to improve the service quality and it is considered as the crucial part of the
operations of the hotel. The level of human- interaction in the service industry and the interaction
between customer and hotel decide the success of the hotel (Peinado, et al., 2018).

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To maintain the quality of customer services of hotel, it is important to analyze the process of
improvement and find the factors which can impact the customer service of the company.
Analyze the process is also a phase of model. Under this plan, it is kept in mind that the
customers are completely satisfied with the services provided by the organization. The task of
operations management is also to develop relationships with suppliers firmly and keep those
relationships alive for a long time. Those potential suppliers are then contracted with and finalize
payment, delivery status, place, and other necessary items (Sauer & Seuring, 2017).
To take feedback from the customers, company can identify and implement the improvements
and it is the fourth phase of the framework. In Marriott organization, when the service product is
received by the customer and the customer receives a defect in the service, customer returns it by
giving a negative rating, and then supply chain management has to answer all these things to the
customer at their level. To avoid such situations, the hotel should provide only tested products to
its customers and this is one of the main functions of supply chain management. At the end,
company should assure that improvements are sustaining (Sting & Loch, 2016).
Technology Company Motorola also used Six Sigma model to improve operations of the
company and after the success of Motorola in 1988, Six Sigma became recognized. With the
help of this model Motorola achieved growth in business of 2.2 billion dollars (Drohomeretski, et
al., 2013).
Conclusion
From the above discussion, it can be concluded that the supply chain of service company
International Hotel Marriott and product company Zara Fashion Retailer is totally different from
each other. Because Zara fashion retailer provides the trendy, fashionable garments to the
customer, for which company uses the supply chain to transport the products. On the other side,
Hotel Marriott provides luxury stay to customer for which, they only need a good location and
good behavior of employees. Its supply chain only includes human-to-human interaction. But
both companies have same aim or objective that is to satisfy the customers.

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References List
Li, P., 2011. Supply Chain Management. Germany: BoD – Books on Demand.
Christopher, M., 2011. Logistics & Supply Chain Management. 4 ed. New Jersey: Financial
Times Prentice Hall.
Drohomeretski, E., Gouvea da Costa, S. E., Lima, E. P. d. & Garbuio, P. A. d. R., 2013. Lean,
Six Sigma and Lean Six Sigma: an analysis based on operations strategy. International Journal
of Production Research, 52(3), pp. 804- 824.
Farooque, M. et al., 2019. Circular supply chain management: A definition and structured
literature review. Journal of Cleaner Production, Volume 228, pp. 882-900.
Fearne, A., Garcia Martinez, M. & Dent, B., 2012. Dimensions of sustainable value chains:
implications for value chain analysis. Supply Chain Management: An International Journal,
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Ferdows, K., Machuca, J. A. D. & M. L., 2015. Zara: The World's Largest Fashion Retailer.
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operations management research. International Journal of Production Research, 53(16), pp.
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Available at: https://www.inditex.com/en/how-we-do-business/our-model

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[Accessed 21 September 2019].
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[Accessed 21 September 2019].
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[Accessed 21 september 2019].
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