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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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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Comparison of Efficient and Responsive Supply Chain

  EFFICIENT SUPPLY  CHAIN                                            RESPONSIVE SUPPLY CHAIN

PRIMARY GOAL:  supply demand at a lower cost                        respond quickly to demand


PRODUCT DESIGN: maximum performance at minimum cost     creates modularity for product changes                                                                                                                            

PRICING STRATEGY: lower margins as price is a prime            higher  margin, price isn't a driver

MANUFACTURING: lower cost, high utilization                        flexible capacity to buffer unpredictability


INVENTORY ; minimize inventory to lower costs                        maintains buffer inventory
                                                                                         
                                                                                                                                                  

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Is your Supply Chain at risk due to Network Design failure

 Mitigating  your supply chain risk  during network design disruptions: 5 ways to  handle the supply chain risk

 1)INCREASE CAPACITY : Focus on low cost decentralisedGet capacity for predictable demand 

2)GET REDUNDANT SUPPLIERS :Get redundant supplies  for high volume demand and low redundant supply for low volume demand 

 3) INCREASE RESPONSIVE : Give  preference to  cost over responsiveness for a commodity item which has a long life cycle.In contrast   increase responsiveness over cost for shorter life cycle products 

 4)INCREASE INVENTORY: Decentralize inventory of predictable lower valued goods and decentralize unpredictable and higher valued goods or products 

5)INCREASE FLEXIBILITY : Favor cost over flexibility for high volume products. In contrast, favor  flexibility over cost for low volume products

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Performance characteristics of Retail Industry with Consumer Pick Up

The Inventory and cost impact "for  retail consumer pick " Industry

 In  retail consumer site, the inventory is stored with the manufacturer or distributor  warehouses, however, the consumer orders are based on online or the phone orders. In this   case, online consumers give the order online or mobile. The "goods are picked up and are then sent to the designated pick up spots "which are then send to the consumer. This involves
1) Order by phone
2) Orders are delivered to stockists
3) merchandise are then shipped  to pick up points

 In this post, we take a look on how " inventory costs and performance" impact consumer retail pick up industry

Cost factor : Inventory
Performance: Higher  than all other options

Cost factor: Transportation
Performance: lower that other options

Cost Factor : Facilities and handling
Performance: Higher than other  options. The increase in handling site  at the pick site can be significant for online and phone orders

Cost Factor : Information:
Performance: some investment in infrastructure needed  for online and phone orders.

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Supply Chain drivers that impacts Distribution Network Design

At the highest level performance of a distribution network shall be evaluated by following criterias
 1) customer needs that are met
2) Cost of meeting customers; The the firm must consider the impact of customer service and the cost of meeting that service

 Although there are customer values is impacted by various factors we discuss the measures influenced by the structure of the distribution network .Parameters that impact Customer needs are 1)response time for reaching customers
2)Product variety and SKU
3) Product availability
 4) customer experience
5)Time to market
6) order visibility
7) Return ability Firms that are able to target customers who can tolerate long response time are required only a few locations that may eb far from the customer. These companies focus on increasing the capacity of each warehouse ot stores In contrast firms that target customers with shorter tolerance response time needs to have their location close to their facilities

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6 supply chain drivers that impacts distribution network design

6 supply chain drivers that impacts distribution network design are

1) inventories
2)Transportation
3)facilities and handling
4)Response time :The other 2 drivers are 5) sourcing and  6)pricing

INVENTORY AND AFFECT ON SUPPLY CHAIN  a)As the number of facilities in the supply chain increase the costs also increases .To decease the inventory costs ,firms try to consolidate and limit the number of facilities in supply chains c)For example with fewer facilities Amazon  is able to turn its inventory 10 times a year, where as Barnes and nobles , with hundred of facilities is able to turn its inventory 3 times a year.

2) TRANSPORTATION AND SUPPLY CHAIN Transportation : Inbound transportation costs are the cost involved for bringing material into the factory.While outbound supply costs consist of  goods are transported out of the facility Outbound transportation costs per unit tend to be higher than inbound costs because the inbound lot sizes are typically larger

3) FACILITIES  PLANNING  AND SUPPLY CHAIN facility cost decreases as the number of facilities decrease because consolidation of facilities allows firms tro exploit economics of scale 4)Response time : if the firm wants to reduce its response time it might have to increase the number of facilities beyond the point that it minimizes logistics cost.

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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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Global Auto Suppliers: Toyota

OEM FOR TOYOTA TACOMA

wind adhesive : Yokohama industries
Pedestrian protection absorber : shape
Oil Cap:miniature precision industries
Power Steering Feed Tunes: Yokohoma industries
Hydraulic Power Steering Pumps:Koyo
Fog Lamp : North American Lighting
Front Suspension  Coil Spring : Nasco
Aluminium Wheel : Superior Industries
Electronic Locking Differential : GKN Driveline
Door Panel Insert: Haartz
Fasterners :PowerTrain and Chassis : Rightway Fasteners
Fuel Tank Straps :Midway products
Leaf Springs: Rassini
stainless steel fasteners : Maclean Fogg
exhaust component : Tennecco
License plate Lamp :Hella
Fuel Tank StrapsMidway products

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Review of Storage and Warehousing Supply Chain Start Ups

View post on imgur.com

Storage and Supply chain today has undergone a evolution. From the time consuming process of loading , tracking and following shipments, many supply chain start ups are " disrupting the existing space by " providing faster service and GPS tracking to their consumers which makes shipping and tracking easy

 LIST OF SUPPLY CHAIN WAREHOUSING AND STORAGE START UPS 

1.)Lockitron A remote controlled lock and mobile app enabling users to store locally instead of using warehouses.
2.)MakeSpace An on-demand storage solution. MakeSpace provides pickup, urban storage, and on-demand retrieval.

3.)Boxbee Much like MakeSpace, BoxBee provides pickup, urban storage, and on-demand retrieval for homes and businesses through an easy web/mobile interface.

4.)ShareMyStorage On sharemystorage.com people are brought together to provide a common sense self-storage solution – using space such as the attic, garage, basement, or spare room in the back-office.

5.)Cubbyhole An app-based service that lets users rent their storage space out to strangers. Renters specify how much space they need and for how long, and snap a photo of the goods they need to store. Prices start at $15, renters pay via credit card directly through the app

6.)Keycafe Store your keys securely at the local cafe and exchange them remotely with your home-rental guests via the app. Keycafe is not classic ‘storage’ but about managing access to your home remotely.

7.)Swapbox: Shop online and ship your packages to a Swapbox located nearby. It’s a modern, always-open postoffice. You get notified via email and/or text message when your packages arrive.

8.)Cargomatic A platform that provides shippers with instant access and real-time visibility to trucks around them via mobile app and cloud-based software.

TruckTrack A cloud app for trucking business management, giving instant insight into business KPIs, fleet and human resources. The app also provides you business optimization recommendations.

source : Johathanwichmann

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Supply Chain Logistics and Transportation Start Ups

Transportation & Logistics Start Ups 

 Matternet is a transportation system made up of Unmanned Aerial Vehicles (UAVs), landing stations and routing software. The system aims to transform the way we move goods locally, starting with the pharmaceutical delivery market in areas inaccessible by traditional infrastructure.

 Freightos A website – and a network of freight forwarders – that provides automated freight quotes and a contract management system for shippers.

 Transporteca: A website giving shippers and consignees a much-needed tool to easily compare shipping and transportation prices from freight forwarders.

iContainers: An end-to-end pricing tool and freight forwarding service offering best available prices for ocean and sea freight as well as international moves. With iContainers you can get a quote online instantly from multiple carriers.

 Shippo" Shippo  is “shipping made easy”. With the Shippo API and apps you can get discounted shipping rates and labels within minutes. Shippo is basically selling discounted labels when connecting shopping cart apps with carriers such as DHL, FedEx and UPS – making things easier and cheaper for those who want to ship.

Retigence : A company specialising in " providing predictive analytics, which will help retail  and businesses to align inventory to the real time demand of the product.By mapping inventory in real time it helps retailers predict ' demand forecasting  better

Freight Filter An easy-to-use service to help you find the best shipping options. It’s divided into three simple steps – get the price, book it, and ship.

Xeneta A service that ads transparency to the shipping industry by enabling companies to benchmark their ocean freight rates. Useful for both importers, exporters and freight forwarders, e.g. for understanding the market and when negotiating prices.

source :jonathanwichmann

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5 Steps in creating a Sales and Operations (SOP) Planning Process

 source :supplychaininsights
The 5 steps in creating a sales and operation Planing are

1) demand planning
2)Supply planning
3)Determine most profitable
4)Conduct If what Analysis
5)Collaborate among cross functional departments

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5 Trends in Big Data and Its Impact on Supply Chain

Supply chain and Big data : top 5 Trends from Retigence Technologies Private Limited

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Auditing Supply Change Delays and Disruption: Top 5 Findings

Global supply chain risk management infographic from Retigence Technologies Private Limited

HOW SUPPLY CHAIN RISKS IMPACT COMPANY BOTTOM LINE

A recent research report on the risks of supply chain shows us some startling statistics. Since most manufacturers outsources a fair amount of work to “ their suppliers and vendors” the chance of “ supply chain disruption, delays or external natural factors is always omnipresent .

 • However just 25% of a typical company’s end to end supply chain is being assessed for risk auditing The risk factor

 • 90% of respondents do not formally quantify risks when sourcing production • In a survey 45% firms indicated a looss of revenue due to supply chain distruption

• 14% of companies revenue loss on account of supply chain distruption exceded one million euros • Supply chain distruption caused shareholder returns to decline by 33-40% over a 3 year period

• Share prices  of companies that  experience delay and disruption in supply chain tended to be more volatile ( on average around 13.5% higher)

 • 58% of firms indicated that a loss of productivity as the main reasons for supply chain disruptions • while 11% firms believed that supply chain risks and delays lead to increase in cost of production

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Reviewing Supply Chain Conflicts: Manufacturer Vs Multi-brand Retail

 manufacturer vs multi-brand retail is one of the classic cases of supply chain conflicts.

Manufacturer vs multi-brand retail conflicts is one of the most classic cases of supply chain conflict, as the manufacturer will want the retailer to work with high service levels as to ensure availability of his product on the shelf. However, a multi-brand retailer across the world or any big departmental store would want to maintain a high product availability at the category level and not on a brand level.
If the cost of substitution of competing brands is not very high, the departmental store does not mind which brand” is available at the store as long as the category product are available. This model is valid for products that do not have a very high level of brand loyalty. For example “ Milk, Yoghurt, Cheese, Butter, jams, sauces “ which are mostly generic products”
In the above cases,  the  multi-brand retail chains would like to work on a lower service level as to keep his “overall cost low This substitution model, which the multi chains believe in, is in direct confrontation with the model the manufacturers believe in.  However for a single sourced item in a business to business environment, we don’t see the kind of conflicts we see in “ product categories that are more or less “commodities “.

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Supply Chain Risk; Suppliers Vs Manufacturers

 SUPPLY CHAIN RISK: SUPPLIERS VS COMPANY

For companies that manufacture products mostly  use suppliers, and over a period of time, they have become extremely dependent on them.  So should the  supply chain depends on the outsourcing suppliers? Most companies have many suppliers as to derisk their investment and ensuring backup if one supplier goofs up

However,  there exist a divided opinion on ultimately who is responsible for " supply chain.  Are the suppliers more accountable for the  supply chain risk, or is it the supply chain teams  of the company more responsible for " ensuring vendors and suppliers" deliver in  the right number and the right time

According to The Ripple Effect, a recent survey conducted by Deloitte Consulting LLP, 63% of executives see external suppliers as one of the biggest sources of today’s supply chain concerns. And when problems do arise, it’s the company—not suppliers—that will likely bear the brunt of the blame. What’s more, even having a diversified portfolio of suppliers is no guarantee when it comes to managing the supply chain.

 For example, when Japan was hit by a tsunami in 2011, most companies thought their supply chains were safe because they had multiple suppliers as backups. As it turned out, many of those suppliers relied on the same secondary suppliers, causing the entire supply pyramid to collapse.

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Top 3 Challenges in Supply Chain for the Food Industry

TOP 3  SUPPLY CHAIN CHALLENGES ACROSS THE FOOD INDUSTRY

Supply chain across Food Industry is a big challenge. The basic problem is in the kind of products across supply chain which is perishable. Unlike other industry the inventory has to be very tightly controlled so that products are fresh and losses minimized

In the past, most food companies dealt with supply chain risk after-the-fact through product recalls—and by switching suppliers once problems were detected. In an increasingly complex marketplace, the traditional approach just isn’t good enough.

 Tracing a food problem back to its source is complicated by multi-tiered supply networks and divergent standards for food quality and safety around the world. For example, various countries that produce rice allow different levels of arsenic (which is used to control pests). This means that rice may be deemed safe and legal to sell in one market but not in others. Regulations and standards are continually evolving and present a challenging risk. In the U.S., for instance, federal lawmakers are expanding the authority of the Food and Drug Administration to include the ability to shut down operations that fail to comply with the law.

 The supplier in the food industry  is a big variable and is a  crucial factor in deciding the success of the supply chain, as the raw  stock of the food  is the most precious and important part of the inventory forecasting. Apart from quality and consistency, adulteration is another risk.The entire ecosystem  Farmers, to the cold storage  to the suppliers  play a big role in ensuring the effectiveness of the supply chain  across the Food Industry.

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