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Supply Chain Management Case Study Presentation Ppt

Presentation on theme: "Supply Chain Management Case Study"— Presentation transcript:

1 Supply Chain Management Case Study
Lihuan LiSabarinath Pathanoor MukundanSwetha Vasudevan

2 Fast Fashion Concept=

3 A G E N D Inditex Zara Business Model Design Manufacturing Logistics
StoresCustomersTechnologySummarySCMStrategyAnalysisComparison – Zara, H&M, BenettonFuture Developments

4 Inditex

5 ZARA“To bring high fashion apparel to the market at an affordable price”Amancio Ortega Gaono

6 Zara - History Ortega started business as a dress-maker
First Zara store opened in La CoruñaZara extended presence in major Spanish citiesFirst store outside Spain was opened in Porto, PortugalExpanded internationally and diversified brand portfolio2,019 stores worldwide1963197519881990’s2015

7 Business Model Daily sales analysis Customer feedback
Delivery twice per weekConstant changes to the initial collection based on demandSmall production batches

8 Design 250 designers in headquarter Customer Demands from Stores
Travel Across The WorldFashion Show, University, Movie, MV, etc.250 designers in headquarter

9 DesignStore Specialist: outlines of style/fabric/color based on customer demandProcurement Manager: inputs regarding capacity & costDesigners: design specificationsPrototype ready in few hoursAdapt swiftly to changes within each seasonDesign constantly to satisfy customer

10 60% of total production carried out in Spain and Portugal
Manufacturing60% of total production carried out in Spain and PortugalMore fashion-forward/detailed items - produced in-houseLess time-sensitive pieces - outsourcedSubcontracts some stages of process

11 Manufacturing Manufacturing
The cut pieces are bar-coded and distributed among 350 small workshops in Spain and northern Portugal for sewingFabrics are cut according to the prototype by automated cutting facilities

12 Manufacturing Manufacturing
The stitched garments are checked for quality, pressed, tagged, wrapped or kept on hangers, then sent to distribution centres

13 Zara Logistics, Arteixo
500,000 ㎡Located centrally among 14 manufacturing plantsOwn railway track of 211kmManages 50% of women’s and men’s merchandiseServes Spain, Portugal, the Americans and Middle EastPlatform Europe, ZaragozaManages the remaining 50% of women’s and men’s merchandiseServes non-Iberian Europe, Russia, and AsiaZara Logistics, in ArteixoPlatform Europe, in ZaragozaOpened in 2002Meco, in MadridMost countries have small warehouses for extra or extra returned merchandise and inter-store transfersMeco, MadridManages children’s wear for all Zara storesDelivers all over the world

14 LogisticsFIGURESStrategy3 separate product lines(women, men, children)FrequencyTwice a weekDurationEurope: within 24h by truckOthers: within 2d by flightShipping Accuracy98.9%Optical scanning devices sorting out more than 6000 items per hourHigher level -> folded apparel in boxes -> belt system1Lower level -> garments on hangers, sorted based on styles -> belt system2routed by automatic routing devicespre-priced and labeled according to destinationItems have codes conveying to the staff where they need to be placedGarments are shipped out twice a weekAll products, regardless of their origin or destination, come to logistics centers in Spain before being sent to the stores

15 LogisticsORDERING CYCLESeason BeginningPerson in charge: HeadquartersItem: new collectionsQuantity: 25,000 unitsDuring SeasonPerson in charge : Store ManagerItem: replenishmentsQuantity: 12,000 units/week( 8,000 for women’s2,000 for men’s2,000 for children’s )All products, regardless of their origin or destination, come to logistics centers in Spain before being sent to the stores

16 Highly Automated Logistics RFID
Optical scanning device -> sorting 6000 items/hTwo levels of automated systemsAutomatic routing deviceOptical scanning devices sorting out more than 6000 items per hourHigher level -> folded apparel in boxes -> belt system1Lower level -> garments on hangers, sorted based on styles -> belt system2routed by automatic routing devicespre-priced and labeled according to destinationItems have codes conveying to the staff where they need to be placedGarments are shipped out twice a week

17 LogisticsOBJECTIVESTo ensure that there is always something new to offerTo respond to demand shifts during one seasonTo encourage consecutive visits(Zara customer:17 visits/yearOthers :4 visits/year)To pursue speed in sacrifice of freighting costAll products, regardless of their origin or destination, come to logistics centers in Spain before being sent to the stores

18 Logisticshttps://www.youtube.com/watch?v=iKUmOsmh-Gs

19 StoresOrganization StructureStores located in prime locationsMost of the stores owned by the companyStores all over the globe identical and modelled off of central designsWindow display crucial for attracting customersDisplay of clothes given prominence

20 Stores - Inventory Management
Organization StructureStore managers select about 800 designs out of the 2000 offered at the beginning of the seasonCustomer opinionSales successConstant feedback on customer opinion and sales success given to the design team

21 Fewer merchandize on discount
Stores - Inventory ManagementOrganization StructureEach item stocked in small quantities (3-5 units per size, per design)Inventories not renewed when an item is sold outFewer merchandize on discount

22 Sales Associate Organization Structure
In-store Logistics ManagementOrganization StructureProducts are not kept on the selling floor unless all sizes are availableSales AssociateProcessing DeliveriesManaging Backroom ReplenishmentManaging Display Areas & Fitting RoomsPhysical Audits

23 DTs/Regional Managers
Organization StructureCountry HeadDTs/Regional ManagersCommercialsStore ManagersSection ManagersSales AssociatesHR DirectorsNon Operations Issues

24 DTs/Regional Managers
Organization StructureCountry HeadCommercialsDTs/Regional ManagersHR DirectorsStore ManagersNon Operations IssuesSection ManagersSales Associates

25 DTs/Regional Managers
Organization StructureCountry HeadCommercialsDTs/Regional ManagersHR DirectorsStore ManagersNon Operations IssuesSection ManagersSales Associates

26 CustomersCentre of the Business modelTarget customers – Young, fashion conscious people interested in buying inexpensive clothesProduct Inventories fresh and scarce to encourage more visits

27 Hybrid Model : IT + Human Intelligence
TechnologyHybrid Model : IT + Human IntelligenceComputer Aided Design and ManufacturingRFID Technology

28 Summary - SCM

29 Speed and Decision Making Marketing ,Merchandising and Advertising
Summary - StrategyBusiness ModelCustomersVertical Integration – Forward & BackwardSpeed and Decision MakingMarketing ,Merchandising and Advertising

30 Better control and more responsive Highly flexible and fast
AnalysisBetter control and more responsiveHighly flexible and fastConstant flow of InformationGlobal sourcing strategyLimited quantity production benefitsCentralised distribution centre benefitsEconomies of scale not possibleIncreasing costsInternational expansion cautioned

31 Comparison Inditex Group (ZARA) H&M Group (H&M) Benetton Group
No. of stores (2014)6,683 in 88 markets(Zara )3,511 in 55 markets(H&M )6000 storesBusiness StrategyTime basedCost based(price leaders)Worldwide brandProductionProduce small batches,Global SourcingLow cost country sourcingFull control of Production FacilitiesDistributionAutomated Centralized DistributionDistribution centres in all countriesLogistics hub in Europe and AsiaRetailOwnership of Stores and Merchandising StrategyEliminate middle-man to consolidate volumeOutsource Retail Operation

32 2. Consolidate transportation across different product lines
Future Development1. Establish logistic center to be near areas with rich supply & low cost & big market & special aesthetic-> e.g. Asia/South America, to reach lower price by saving freighting cost2. Consolidate transportation across different product lines-> arrange logistic center by destination instead of product line3. Automatic replenishment-> for basic products and special ones based on specific market characteristics, to leave more focus on fashionable items

33 5. Outsource time-consuming work from store employees
Future Development4. Advertising investment for market penetration and building up positive brand image-> penetration in big potential market like Asia/America5. Outsource time-consuming work from store employees-> e.g. processing deliveries6. Continuously work with academics in operation management and IT support-> to find the most efficient practice

34 References https://www.inditex.com/en/home
https://en.wikipedia.org/wiki/Zara_(retailer)

Нуматака закрыл трубку ладонью и громко засмеялся. Однако он не смог удержаться от вопроса: - Сколько же вы хотите за оба экземпляра. - Двадцать миллионов американских долларов. Почти столько же поставил Нуматака. - Двадцать миллионов? - повторил он с притворным ужасом.

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