everyday fast fashion :how zara manages its supply chain

If you’ve ever shopped at Zara, the ubiquitous clothing chain, you may have noticed its trendy offerings are not just up-to-the-minute but up-to-the-instant. zara is a chain of supply chain which is owned by Inditex ,the Spanish retailer with a turnover of over 14A billion turover .with12% net profit over sales . The secret sauce of  how Zara is able to do its because of their famed Supply chain  management, which has become a case study in many business schools since a long time

The supply chain management is the key to Zara’s corporate strategy. and its revenues and profits that swells up every year.Zara is the most profitable European retailer and apparel brand .Zara's success has been the result of focus and  rapid response to the market . Unlike all its competitors it does not outsource all  its production activities .Most of its production capacity is inhouse and outsourced is located in Europe so that it can work  on  shorter lead times

It often relies heavily on sophisticated fabric-sourcing, cutting, and sewing facilities nearer to its design headquarters in Spain .While the wages of  European workers are higher than china or taiwan ents an hour. But its  turnaround time is miraculous: as short as two weeks from an idea in a designer’s head to a garment on a Zara store’s shelf. The bulk of its production and apparel is shipped by air, so that Zara can deliver  it  across  retail stores in very short times ( 72 hours )to the market across all the stores located around  the  world.

Because of its ability to respond quickly . Zara is able to bring products across its retail chains and store shelves quickly ( withing 15 days of product creation )Zara ensures that it has a fresh lines of fashion and apparels with no product in the shelves for more than 4 week
s.
No wonder it positions it selves as " Fresh Fashion everyday . The sheer  and and awesome power of scaling up and ensuring no inventory is stockrd up not more than onr month, It can deliver retailers with the latest line of products within 15 days of its launch across most nations where Zara is present 

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how retigence is helping store owners manage inventor in real time

HOW TO ALIGN INVENTORY TO REAL TIME DEMAND

 One of the most crucial role RETIGENCE predictive analytics has played in delivering  inventory optimization was for a mobile company. Traditionally mobile retailers purchase inventory from distributors  for a credit  period of 21 days.

The disadvantage here is that  the retailer had no idea on  the inventory stock in their books and the amount they have to pay  to the mobile company distributors  during the credit period of 21 days. There was no real time mechanism by which they coudl judge the value of their inventory in the real time. They only managed to  find the data during the end of the financial period

When it comes to merchandise ordering many retailers are restricted by lack of timely and accurate information on their sales, stock turn and customer demand

By quickly and easily delivering required information to mobile store owners including inventory  purchases and other decision makers  we have  insured that each inventory was reduced    so that the chances of overpaying the vendor  is almost nil.

this also ensures taking the guess  out of guess work, with helped retailers to acess real time analytics and insight into daily stocks and store right down to sku levels

,our retigence predictive hana  helps them interpret real time data with accuracy and speed by which retailers  can make their  decision faster , ultimately leading to higher sales, gross profit and faster growth
this saves  businesses from going bust. you dont have to wait for data , because we help access real time  computing data on the fly by theanalytical  power of sap hana

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the 3 golden rules of optimizing network design process:

1)The decision to allocate volumes and markets to plants is an important decision in the overall tactical decision system for the firm. The decision to locate these plants in locations where it has decided to is an important network design decision, which has significant implication on the supply chain performance

1)Firms can use linear programming model to decide an optimal network design and operations Deciding optimal location of services in a model a) where consumers need to walk in everyday involves different considerations as opposed to a model b) where “ its corporate employees are located at one point and with c) where its manufacturing locations are located across the country

2)Network design involves large amount of data , converting large amount of data into meaningful structured data into insights

3)Global firms spreads out their risks by having their manufacturing plant as dispersed across geographically possible and keep their excess capacity in network as a hedge against uncertainty in markets and prices of finished products and raw material

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How target is moving to owning the longer piece of the supply chain pie

At a time when consumers expect rapid fulfillment as they shop online and from mobile devices, Target is writing custom software to improve its supply chain operations.
Target is building new supply chain software to better align inventory availability with consumer demands. To better position the retailer for online and mobile shopping, the retailer’s IT team is writing custom software to quicken the pace with which merchandise gets from its stores to consumers.

 According to Target's CEO Mike McNamara" It was important to get the fundamental's of Supply chain " correct specially during today's uncertain times. Mike believes that as a company the stress and strain we put on our supply chain today is very different to what was the case four or five years ago

 Target last year  had allocated $1 billion for its digital business transformation, is modernizing an outdated supply chain predicated on a linear model in which goods went from the manufacturer to a distribution center and then one of its 1,800 stores for purchase.

 Target's inventory lens has widened to include more products from countries such as China and perishable groceries for which timely arrival is a critical factor. Target is now shipping products directly from fulfillment centers, distribution centers and local stores to consumers' homes to accommodate preferences for online and mobile ordering.

In Target's fourth quarter, one third of its online orders were picked up in store or filled from inventory in stores. These factors have led Target to own a "longer bit of the supply chain," McNamara says. "We're using the whole enterprise inventory to service our guests in a way we never did before." The new apps are designed to better streamline increasingly complex operations.
Target naturally generates a lot of data, so it relies on several open source databases and data management tools, including Cassandra, Kafka, Couchbase, MongoDB and Hadoop

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iceland and frozen food retailer xpo logistics ties up for 5 year supply chain deal

Iceland and XPO logistics  has agreed   for a five-year warehousing and distribution deal , as the frozen food retailer looks to continue growing its store network in the UK.


 The supermarket currently has 850 stores and a burgeoning network of new 'out-of-town' Food Warehouse outlets, and XPO says it has developed a supply chain solution that combines the retailer's dedicated network with the its own shared-user facilities.

 XPO Logistics, Inc. is a US corporation and a provider of supply chain services in 32 countries. The company has annual revenue of approximately $15 billion, with more than 1,450 locations and a workforce of over 84,000 employees

 XPO will manage Iceland's distribution centres in Warrington, Enfield, Livingston and Swindon, with responsibilities including warehousing activities ranging from product receipt to nationwide store distribution, as well as a number of primary collections.
 Iceland's temperature-controlled fleet of 320 tractor units and 450 trailers will also be overseen by XPO in a move that is expected to create further operational efficiencies for the retailer by implementing an integrated inbound supply chain platform.
In 2015 XPO acquired Norbert Dentressangle, a logistics business that had a significant presence in the UK grocery and general merchandise retail sectors.

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Who Checks Out Faster…Men or Women?

Image Source- GroomsAdvice

Men stare at space while women check multiple outfits. Isn’t that a sweeping statement or maybe a cliché? Men have been stereotyped and on the other hand, women are the epitome of having an insatiable desire to shop. Any man’s expressions look like waiting till eternity for her woman to finally make up her mind. The flickering of fluorescent lights in the shopping mall continues to hypnotize the man. So do men hate shopping? Contrary to popular and often cliched  opinion, many men are perfectly happy to hit the stores.

However It is the process of shopping that they hate an not per se " shopping " as an activity. The generalization that men and shops do not gel well together is a cliché. There is a subtle difference that retailers need to understand. Biologically speaking  men buy for their needs while women shop for their wants.

 Women are naturally programmed to be a gatherer whereas; men behave like a hunter since primitive times. And this 21st century is no different. So any man’s job is to target the exact thing rather than wandering aimlessly to look at various options available. Men are far more decisive when it comes to shopping. However, women shop on behalf of their kids, husband, in-laws, friends, professional associates and even for their friend’s kid, to name just a few. It is said that men head to the check out counter after choosing one out of 3 items, while women selects  one out of every 8 items  they see.

Their tendency to constantly evaluate their purchases and the impact it will have on the people they care for is visible to everyone. So it is a must for retailers to understand the gender differences  and how does this impact retail  . By doing so, retailers can overcome the hidden barriers to the sale. Diversity in the shopping behavior of both the genders need to be addressed before forming any notion about them. Nowadays, both the genders are staying single and settle down later in life. So don’t risk your sale by forming stereotypes about them.

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Managing the Stock Out Conundrum

In  a recent  survey data   that covered across more than 71,000 consumers in 29 countries  show ho consumers react to stock-outs problems. When consumers can’t find the precise product they’re looking for, consumers typically do one of five things.

•  They find a substitute of the same brand, they substitute a different brand,
•  they delay their purchase until the item’s back in stock at that particular store, 
• they don’t buy the item at all, or, 
• worst for retailers, they buy the item at another store

Depending on the product category, 7% to 25% of consumers faced with a stock-out will continue shopping but won’t buy a substitute for their desired item at the store; 21% to 43% will actually go to another store to buy the item according to a recent harvard review retailers can lose nearly half of intended purchases when customers encounter stock-outs. Those abandoned purchases translate into sales losses of about 4% for a typical retailer. For a billion-dollar retailer, that could mean $40 million a year in lost sales

A study indicates that approx 600 retail outlets across 29 countries, the retailers themselves are responsible for most stock-outs— However these are at odds with other findings which is showed 72% of stock-outs were due to faulty in-store ordering and replenishing practices—retailers ordering too little or too late, generating inaccurate demand forecasts, or otherwise mismanaging inventory. Just 28% of stock-outs, we found, could be attributed to replenishment and planning problems in the supply chain. These included product droughts created by suppliers; category planners who mismanaged shelf space, promotions, or new product introductions; or supply chain managers who misjudged long-term demand.

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