Zargistics Team: Blake VanderBerg - 821278942 John Whelly - 820501401 Jessica Weingert - 820853059 Krisztina Virag - 821250982 Jenna

Zucker - 820920437 Akwaugo Udenze - 821218781

 Zara is a Spanish clothing retailer

1700 stores 78 countries worldwide

Zara practices fast fashion trends moves from the runway to stores within weeks, as opposed to months. Zaras supply chain has undergone tremendous changes in order to sustain its competitive advantage in todays market Zara has continually maintained its mission to provide fast, affordable, and fashionable items

Inventory Management
Focus on reducing response time
Launched approximately 11,000 new items per year, compared to 2,000 4,000 for H&M and Gap

Inventory Management
Stock outs are not uncommon Short shelf life attracts more customers more often Zara holds 6 days worth of inventory, while H&M holds 52 days, and Spanish retailer Cortefiel holds 94 days of inventory

Forecasting
Extensive market research
Quick input and output response

Frequent new styles

Near-term forecasts Short product life cycles to reduce errors and improve current products Customer feedback

Procurement
Keeps approx. half of its production inhouse
Separate procurement staff for each clothing line

Procures basic textiles from global suppliers

Uncomplicated items are outsourced to China Difficult items are produced in Zara factories and by local subcontractors Most suppliers are located in close proximity to its distribution centers
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Production Planning
Centralized Design & Production Centre
Constant flow of data throughout the supply chain

Zara allows its retailers to change 40%-50% of its orders

Factories operate on a single-shift mentality, and can change quickly according to unforeseen demands Under produces products in order to create scarcity value
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Warehousing
High-velocity shipping
Merchandise is selected, sorted, and routed to the lungs of the warehouse

Merchandise is delivered, Retailers hold products in local distribution centres or in retail store stockrooms
High-velocity shipping relies on rapid information flows

Warehousing
Stores are electronically linked to the companys headquarters
Logistics system is based on two core concepts: speed and flexibility

Currently building a new state-of-the-art warehouse and facility complex in Zaragoza, Spain

Transportation
Effective and efficient transportation network Fast delivery time Coordinates with all aspects of logistics

Quick response in supply chain

Ability to distribute merchandise within 2 weeks

Final step in order fulfillment

Promotes service quality

Customer Service
Founder: Amancio Ortega Customer Service Elements & Measures of Customer Service Product Availability

Order Cycle Time

Logistics Operations Response to Certain Events

Stock-outs
Extra Inventory

Future outlook

Performance Measurement

Dedicated to creating time to market efficiency Order fulfillment and customer satisfaction Tight linkages between demand and supply
EFFICIENCY RESPONSIVE

Improve performance in accordance with changes in demand

Customer loyalty and brand recognition Expansion into a global market

EFFECTIVENES S

Technology
Competition: 2% of revenue and 2.5% workforce in IT

Zara: 0.5% of revenue and 0.5% workforce in IT

In store: handheld PDA

bi-weekly order, communication with HQ, feedback from customers, inventory.

In Store: DOS=old, slow. Suggested: POS=speed, efficiency, connectivity. WWW: Online stores open now. Better late than never. iPad + Smart phone apps In house: 200km tracks=60,000 items/hour
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 Short-term goals should see Zara expand into North American and Asian markets as well as continued growth throughout Europe In the future, Zara should increase its production outsourcing to Asian countries to reduce costs Overall, Zara seems to be heading in the right direction as the company is growing at a tremendous rate and does not show any signs of slowing down