Operational Management Report: Analysis of Zara's Business Practices

This report provides an analysis of Zara's operational management, focusing on key approaches such as just-in-time production, procurement, information systems, inventory management, centralized logistics, and low marketing costs. It highlights the importance and value of operations management, emphasizing Zara's unique supply chain and its ability to quickly respond to customer demand. The report also examines the impact of the business environment, including competitors, customers, and suppliers, as well as internal factors like organizational culture, profit, and management. The conclusion emphasizes the crucial role of leaders and managers in optimizing business operations and achieving profitability, referencing various leadership and management approaches. The report provides a comprehensive overview of Zara's operational strategies and their significance in the retail industry.

Management and Operations
Task 3 and Task 4

Table of Content
• Introduction
• Key Approaches to operational management
• Importance and value of operation Management
• Business Environment impacts upon operational
management
• Conclusion
• References

Introduction
• An effective management is a need of any organisation to optimise the operations
and reach desired business outcomes.
• Leadership provides a sustainable alignment with employees. Managers and
leaders take different initiatives to promote fluent operating of the operations.

Key approaches to operational management
• Zara is a clothing retailer which provide a collection of fashionable clothes to
people around the world.
• It is presently serving in more than 91 countries and is successful in maintaining
brand value. It gives a good customer value and satisfaction to people.

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• Design and production (Just in time production): Zara delivers clothing to people
through an integrated process called just in time. It is a Japanese concept in
which waste is eliminated in making of product.
• Procurement: Zara is manufacturing 60% of its products. It is associated with in
house production and hence it is flexible in fixation of prices, frequency and
variety of new style of products.

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• Information Systems: The use of technology in every organization helps in
maximizing the efficiency of operations and management. Managers and leaders
of Zara are using technology in complex tasks reducing errors
• Inventory Management: Zara avoids building of inventories from the time of
raw material to end user. It does not follow the general trend of garment industry
of putting of clothes in inventory or stock.

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• Centralised logistics and Distribution: Zara provides clothes and products to
stores in different stores at a fixed time. Orders of different stores are being
prepared overnight and sent to La Coruna .
• Low marketing/ Advertising cost: Zara does not spent much amount in
advertising the products of its brand. They believe in word of mouth advertising.

Importance and value of operations management
• Operations management refers to different functions and operations that
provides goods and services to customers.
• Zara is a clothing retail industry which has various operations management
activities such as inventory management, purchasing, quality check, logistics,
manufacturing and storage.

Business strategy and processes
• Unlike other clothing retailer, Zara has its own supply chain. When a design
appears at catwalk of Zara, the original clothing is manufactured within two
weeks at the stores.
• Zara is able to do it because it has its own supply chain. This helps in building
customer relationship.

Just in time
• Zara believes in producing products/clothes at the time of
customer demand. Clothes at Zara are sold at a fixed price,
offers and discounts are not thing at Zara stores.
• They provide exclusive designs and quality of clothes people
don't care about discounts they just want to have them. This
helps in achieving goals specified for the growth of company.

Inventory Management
• Models for managing inventory are followed in
Zara. Due to this they are able to identify the
number of stocks required in any store and it is to be
delivered within two weeks to stores.
• This increases the optimisation of delivery and
manufacturing.

Business Environment That Impact Upon
Operational Management
• There are various factors which affects the operations of any organisation that includes both
external and internal factors that has impact on company's growth and development. the
various external factors impacting the decisions of leaders and managers are discussed as under
• competitors
• customers
• suppliers

Internal Factors Which Impacts The Decision Making
• Organisational culture- Organisational culture is the environment provided to employees at
work place. A positive environment at workplace makes employees feel motivated and
passionate about working hard and achieve organisational goals.
• Profit- Leaders and managers work in organisation to make profits for company. A business
cannot be run at loss
• Management- A good management is need of every organisation which wants to be in business
for long time.

Conclusion
• From the above specified PPT it is concluded that leaders and mangers play a
very important role in operating of every business.
• There are various leadership and management approaches followed in different
organisations by leaders and managers to increase profitability of organisation
such as transformational approach, contingency approach, classical management
theory etc.

References
• Binz, T. and et. al, 2014. TOSCA: portable automated deployment and management of
cloud applications. In Advanced Web Services (pp. 527-549). Springer, New York, NY.
• Johnstone, S., 2016. Labour and management co-operation: workplace partnership in
UK financial services. Routledge.
• Kato, K., NEC Corp, 2014. Operation management device, operation management
method, and operation management program. U.S. Patent 8,700,953.