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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Explaining the model of Supply Chain in Online Retail Industry: Infographic

explaining the  model of supply chain in online retail industry:

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5 Biggest Supply Chain Challenges for Manufacturers

WHAT ARE THE BIGGEST SUPPLY CHAIN CHALLENGES

In an  McKinsey survey opinions  are divided on their companies’ preparedness to meet those challenges, and fully two-thirds expect supply chain  challenges risk to increase. This chart shows  the top 5 biggest supply chain challenges for manufacturers and retailers across industry

Different organizations in the supply chain may have different, conflicting objectives depending by type

1. Manufacturers: Transportation and Shipping Costs Manufacturing and production ,quality control
2. Distributors: low inventory, reduced transportation costs, quick replenishment capability 
3. Retailers:shorter order lead time,  stock shortage,high in-stock inventory, no of SKU,efficient inventory management analytical engine
Bullwhip effect; One of the most glaring challenges ,in supply chain  is the phenomenon of orders and inventories getting progressively larger (Bull whipping happens when ordering/producing is done on large lots which increase the safety stock of suppliers and its corresponding carrying cost.
4. Vendors/Suppliers:Uncertainity of vendors,suitability of suppliers 
5. Omnipresent Supply Chain :The effective presence or lack of an omnipresent supply chain 
6. Labor and arbitration issues, shortages of labor

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Reviewing 5 Trends that will shape supply chain and logistics by 2016

5  trends that will shape   supply chain  and logistics by 2016

The next 5 tech frontiers : that will change the supply chain and logistics industry :

1)Algorithm, Remote and real time shipping : Powered by  drones, this technology is set to go where no man, machine or android has ever been before.. At the customers doors without a human waiting to deliver goods.
The development of drones has progressed much faster that users expected. Automated Drones with Remote sensing, using powerful algorithms, along with geo targeting,remote sensing capabilities will deliver packages to consumers in flat 60 mins
The top speed of a drone : 50 mph per hour while the max done payload is less than 5 LBS, at this capacity the drone can deliver 86% of Amazons inventory Trend :
How Soon :in very near future within 2-5 years

2)Same day delivery is now MUST ‘ In the early 2012, shipping time used to be one week as a standard. In 2012, around 50% of consumers felt ok to wait seven days ( a week for a package delivery) In 2014, only 35% felt ok with one week deliveries

How soon? An overwhelming 85% believe that same day delivery should be the norm by 2017-18

3)RFID zation of managing inventory by :The RFIP market is further set to grow with increasing consumer online buying.Another step towards industry moving toward internet of things , fuelled by increasing adoption of RFIDs, as they reach the point of sale quickly.An Idtechex research data show that RFID market will be up from $8.9billion in 2014 to $27.31 billion by 2024

4)Real vs Retail : The lines between retail stores and online stores  is soon to get blurred : Closer home online retail will have much bigger share of the wallet with more than 10% of all retail sales coming from internet by 2017

infographic: via

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Reviewing the evolution of Supply Chain models

15 Key Innovations in supply chain strategy:  Ford Assembly line, EDI, MRP, ERP, Dell Direct, Walmart Cross Docking

1913 – Ford Assembly Line – Henry Ford installs the first moving assembly line of an entire automobile, the Model T, first produced in 1908.

The 1950s - Ocean Shipping Container: Malcolm McLean invented the standard steel shipping container first implemented in 1956 at the port of New Jersey.

The 1960s – Electronic Data Interchange (EDI) – Started when computer systems first had the capability to transfer data to other computer systems. Enables the exchange of electronic business documents.

1961- Material Resource Planning (MRP) – Josef Orlicky makes the first MRP system in Racine, Wisconsin. A year later, Gene Thomas from IBM invents the Bill of Materials Processor.

1990: Universal Product Code (UPC) – a company called Logicon wrote a standard for something close to what became known as the Universal Product Code (UPC) to identify via a barcode a specific SKU. The first implementation of the UPC was in 1974 at a Marsh's supermarket in Troy, OH.

 The 1980s – Enterprise Resource Planning – In 1990, Gartner Group first employed the acronym ERP which came to represent a larger whole, reflecting the evolution of application integration beyond manufacturing.

 1984 – Dell Direct Orders – Michael Dell started his company in his dorm room shipping computers to customers. This developed a unique model of make to order that provided custom configurations to customers and shipped to them.

1985 – FedEx Tracking System – After re-inventing the category of express parcel shipments, FedEx went a step further by developing a new computerized tracking system that provided near real-time information about package delivery.

1987- P&G's Continuous Replenishment: Order patterns were totally dependent on sales and retail buyer input until P&G bought a mainframe application from IBM for "continuous replenishment" re-wrote it for retail,

1988 – Walmart Cross Docking – With the rapid expansion in the number of Walmart stores, the company needed an effective communication system. They introduced the first cross docking system, which enabled them to track goods across all their DCs and stores

Source: opsrules

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5 Things Retailers hate to encounter

Running a retail business without using technology is more like locking horns with the bull. It can give you nightmares that you never imagined. Here is a list of 10 things that retailers never want to encounter.

1. An empty shelf of an important product– There are few products which sell like hotcakes in the retail space. And these same products are often missing on shelves. To this retailers can only surmise in retrospect about what went wrong.
2. Delay in delivery of much-awaited products– Sometimes there are issues of transportation or miscommunication that can lead to a plethora of problems in the supply chain. Hence, the much-awaited products are delayed which leads to losses on every front.
3. Expiry of products even before they get sold– There are products on shelves which do not sell at all. Often as a customer, we hate to even see them on shelves. Still no one seems to care about them. So with the passage of time, they get expired leading to your loss only.
4. Cluelessness on demand and supply– There is supply in accordance to the demand. And demand is volatile, so keeping a track of it is impossible.
5. Losing customers– All these mentioned problems leads in losing of customers which is the most dreaded experience for any retailer. This happens due to inventory mismanagement. And inventory is mismanaged because it is done manually. So taking the help of technology is a smart way of avoiding loss of the customer. Predictive analytics can be that saviour.

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Top 5 Consumer-driven Trends in Retail

The impact of Social Media– Social media platforms are now the determining factor behind sales of any brand.  Any word out on social media as tweet or post can make or break any brand.

The generation born in the 80s or 90s are setting the tone– The kids born in 80s and 90s are setting the tone for any brand. They are already profoundly shaping the consumer experience. Their spending power is one of the key factors in driving sales.

Personalized or Customized Preferences– Brands have now focussed their attention on personalization. Personalized products according to the choices of the customer are the hottest trend in the marketplace. Basically, the customer is the king and services are offered for him to cater his needs.

Applications on Smartphones– Peek into your smartphones, few clicks on the screen and you’ve successfully purchased the product. Applications have invigorated the shopping experience. From groceries to clothes, everything is available on smartphones. E-commerce websites have played a big role in shaping the popularity of shopping applications.

Big Data & Predictive Analytics– Big data is the massive amount of data that consumers are generating with every click and even physical movements in stores. The collected data can be analysed with the help of technology. Recent developments in predictive analytics have ensured the effectiveness of big data. Retigence Technologieshave developed such a technology in predictive analytics to handle the inventory problems that any supply chain faces. Retigence’s PRAN crunches the fed data to outline what to keep, what not to keep and how much to keep.;jl;ksnkl;kl;glsa

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