Analyzing Zara's Global Logistics and Supply Chain Management Report

This report provides a comprehensive analysis of Zara's supply chain management, examining its strategic resource management and operational strategies within a global context. It delves into Zara's unique business model, which emphasizes vertical integration across design, production, and distribution to maintain responsiveness to customer preferences. The report explores Zara's supply chain from a customer perspective, highlighting the importance of timely delivery, quality, and competitive pricing. It analyzes the company's lean and agile manufacturing approach, its use of information technology, and its commitment to sustainability through its value chain activities, including inbound and outbound logistics, marketing, and supporting activities such as human resource management and procurement. The report also links Zara's activities to relevant SCM theories, such as just-in-time production, and concludes with a summary of Zara's competitive advantages, including its agile supply chain, local manufacturing, and ability to quickly adapt to changing fashion trends. This report is designed to provide students with insights into the company's operations and strategies.

Running Head: SUPPLY CHAIN 0
Managing Strategic Resources and Operations
Supply Chain Management
Student Name:
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Introduction
In global business, companies are creating supply chains for enabling costs reduction
where they can attain the advantage of lower production costs and outsourcing to free capital.
It is possible by generating efficiencies at large-scale and performing non-core activities.
Moreover, stronger supply chains helps in lowering shipping costs, tariff-related charges and
communications. It helps in enabling business growth, facilitating entry into new markets and
providing companies to access new technologies through partnerships across the globe (Roy,
2017). Though, it involves planning based on functioning of supply chain integration entirely
along with the aim of generating customer service optimum level for being cost efficient at its
best. This report is for understanding the sustainable business strategies achieving by
focusing on effective and efficient management of operations and resources. With the global
view, it is easy to improve supply chain for the company’s success providing a benefit to
locate or move new facilities significantly along with its unique resources. There is
improvement in operations with encouraging ideas free flow and to provide benefit to
customers and looking for opportunities (Richards, 2018). In this report, the aim is to analyse
and identify the global logistics of business along with the company’s sustainability in value
chain and supply chain channels to the customer as an end user. The discussion based on the
global company taken as an example that is ‘Zara’.
Overview of the company
In recent times, Zara is one of the huge international fashion companies across the
globe under the fashion group named Inditex group as a flagship chain store being a largest
apparel retailer. The company is showed up in almost 88 countries and operates in over 2,220
stores as a creator in rapid fashion established with supply chain that is highly responsive.
Zara gives the priority to customer under its unique business model consisting distribution,
design, sales and production among the retail network extensively (Martin Roll, 2019). The
supply chain of the company is vertically integrated enabling garments export.
Supply Chain Management (SCM)
It is essential to understand SCM from the perspective of customer that is
coordination between all the participants ensuring with the information flow continuously
while performing delivery activities of right products with right times, places and value.

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Customer satisfaction is the major thing that requires goods availability at competitive prices
along with right time, quantity, time, quality, and prices (David, 2018). In services, customers
have a central role in relation to SCM based on the company. Here, customer integrates,
manages and coordinates service provision for value creation. Zara is highly responsive when
resulting in the new products shipping to stores. The super-efficient supply chain of the
company makes sure to design and process its products on time through the distribution
center in Spain. Zara’s new items are tagged, inspected, loaded and sorted for delivery into
trucks to the stores (Hansen, 2012). The vertical integration of According to customer
preferences, Zara’s supply chain permits to retain control over regions such as processing and
dyeing along with having fabric-processing capacity based on providing the accurate fabrics
through on-demand availability for new styles. There is elimination of need for warehouses
and helps in impact reduction of demand fluctuations. The production of the company is high
that ensure the efficiency through supply chain critically (Madden, 2015). It moves towards
store level refreshment constantly where collections stay efficient and smooth. Zara’s success
through supply chain is due to customer insights collection frequency where the information
related to trend flows regularly used for the creation of new lines by designers and modifying
the existing ones as well (mhugos, 2020). Further, product information standardization shows
that warehouses of the company have all the information about standardized product with
accurate preparation and allowing of designs quick, common definitions along with
instructions of manufacturing clearly.
In the company, the capability of designing garment is because there is proper
management of product information and inventory based on the stock availability in Zara as
per the requirement of raw materials. Among the strategy of procurement, the way of
company’s working is where purchasing of fabrics is around two-thirds from which some of
them are undyed based on finalising designs before to save that is obtained through demand
aggregation (TradeGecko, 2018). The supply chain of the company is lean and agile where
the manufacturing approach of Zara that is “make and buy” shows the production of more
riskier and fashionable items and outsourcing production of more standard designs and
predictable demand for production cost reduction. In the informal economy, the company
manages to keep its cost low with the help of assembling workshops and leveraging to
outsource (ivalua, 2018). Lastly, distribution management of the company shows state-of-the-
art distribution facility functions with minimal human intervention where most of it are
distributed and sorted. The efficiencies of supply chain are where Zara shortening the PLC

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(product life cycle) and modifies existing items for better success to meet the company’s
consumer preferences. The changes are closely monitored in the company towards fashion
relating to customer preferences with a basic designs range carried by latest trends items that
encourages regular individuals to visit repeatedly (Supply Chain, 2014).
In Spain, high-street store that is based average expects customers to visit multiple
times but Zara wants to work on increasing the visits as expected by customers. The
confidence of the company helps in shaping of ideas, tastes and opinions for fashion with
change needs and preferences of consumer. Zara helps in generating new trends and also
helps in extending some seasonal styles longevity by offering affordable lines (Yau &
Johnson, 2019). Thus, Zara maintains its sustainability by having a commitment to the
environment and people for the success across the globe.
Linkages between the company activities and LB5230 theories
Across the globe, SCM and operations management consists of analysing
transformation processes and value creation while making decisions with proper measures
and performance in future. The just-in-time (JIT) production is used by Zara as a retail giant
delivering trendy and fashionable numbers with different tastes along with integrated and
controlled process. The success of the company relies on the amount of production in-house
and ensuring about the in-season adjustments capacity (O'Marah, 2016). The company is
allowed to do in-house production for amount flexibility, variety, and frequency of launching
new products. The main functions of supply chain consists of manufacturing, designing,
distribution to outlets, and souring where Zara attains the competitive advantage performing
the best practice of retailing across the globe through the success of the company’s supply
chain (Özlen, 2013).
In the company, operations are performed under fast merchandise turnover and JIT
production. The success factors of Zara include lower quantities, short lead-time and more
styles where the company’s objectives are dependability, quality, cost, speed and flexibility.
In supply chain, Zara focuses on meeting the needs of end customers providing expected
products and services at a competitive cost effectively (Altstedter, 2019). Thus, summing the
supply chain of Zara shows that suppliers are close to its factories, manufacturing of clothes
is well maintained, and distribution is done overnight through trucks where the company used
to deliver. So, it starts from raw materials, move to suppliers, manufacturing, distribution,

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customer, and lastly, the consumers. Zara never outsource any channel so cutting cost is for
the raw material local sourcing. Moreover, fast time-to-customer where vertical supply chain
of the company helps in cutting time, efficient, effective, and faster, mass customization, and
low process costs. Information Technology is used to collect necessary information, also go
through Point-of-Sale (POS) Terminals, and works with an ‘H’ structure as every store is
parallel and independent to the Spain’s headquarter (Kato, 2018). Also, one more reason of
Zara’s supply chain to be vertical is for avoiding conflicts emerging from different channels.
Sustainability in the value chain
In business, Zara is committed with sustainability in case of the environment and
people effectively where activities are performed under value chain with both primary and
supporting. The company’s primary activities are involved directly in product’s selling and
producing to targeted customers while improving the performance continuously. Inbound
logistics helps in the development of strong relationships of company with suppliers for
distributing, receiving and storing products. Zara face challenges without analysing inbound
logistics that requires focusing on every single aspect of transformation from raw material to
final product (Conlon, 2019). Further, operations of the company are essential to analyse with
the increase in arrival of raw material requires processing it into an end product and
introducing in market including both service and manufacturing. It helps in productivity
improvisation, competitive success surety, and efficiency maximisation for achieving the
profitability increment, economic growth and power setting for competitive advantage
constantly (Wise, 2019). Outbound logistics helps in delivering the product to end user while
performing activities based on passing along different intermediaries. Moreover, optimizing
and analysing by the company of outbound activities consisting scheduling, material
handling, delivering to the right place, warehousing, transporting and order processing helps
Zara to explore sources of competitive advantage and business growth objectives
achievement (Newaz Akbar, 2019).
There is proper time management with product delivery processes and optimal costs
under outbound activities that puts on quality a nominal negative effect, customer satisfaction
maximisation, and growth opportunities increment for the company. The importance is given
to the company’s activities offering perishable products and quick delivery requirement to
final consumer. In terms of marketing and sales, Zara shows the differentiation and benefits
of products offered to customers comparatively better than competitors (McDowell, 2016).

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The high quality product production is done with distinctive features and affordable costs that
sometimes do not create before the company making investments in its sales and marketing
activities. If activities performed wisely and effectively, there is a possibility of Zara
developing the brand equity and make sure about the coordination. Lastly, activities related to
service play the role of pre-sale and post-sale by Zara for the development of customer
loyalty through promotional and marketing activities (Holgate, 2019). It is essential to
analyse the supporting activities for avoiding damage to brand reputation and using a tool
rather than spreading positive word-of-mouth for efficiency, quickness and time.
Though, supporting activities are secondary playing the role of facilitating and
coordinating activities that are primary in value chain. Zara’s infrastructure defines various
activities consisting legal matters handling, quality management, planning, accounting,
strategic management and financing effectively. This allows company to optimise the value
by controlling and strengthening the market’s competitive position. Here, HRM (human
resource management) analysed by Zara with the help of evaluating diverse aspects of HR
(human resource) consists of training, recruiting, performance management, selecting and
rewarding effectively (Nguyen, 2018). This allows the company to reduce competitive
pressure for the employees based on their skills, motivation and commitment. There is
achievement of the objectives related to cost minimisation with training and hiring costs
analysis among return relatively. Further, advancement of technology integrates the
requirement for Zara to realise the technology development importance (Spellings, 2019).
Lastly, procurement shows involvement of processes in inputs purchased consisting range
from raw material, equipment, supplies and machinery along with other necessary final
product produced linking with the theory of SCM and these performed both primary and
supporting activities.
Conclusion
To conclude, Zara is highly-responsible for its strong supply chain attaining high
competitive advantage at the time of globalisation. The company handles distribution, design,
and production in-house concentrating on its production as a whole. Further, the entire
process integration makes the company to reach out ahead than the competitors while moving
with fashion trends, also based on the tastes and preferences of customers. There is better
control of value chain through vertical integration of supply chain along with distribution
costs reduction and pace alignment to ever-changing fashion trends better. Thus, Zara’s

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supply chain is agile with its unique procurement, supply proximity, local manufacturing,
production feedback, and demand forecasting. Moreover, the company ensures about the
network of supply chain adding value while working on operation entirely.

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