1. Presented By
Manju Pokharel
SUPPLY CHAIN MANAGEMENT OF ZARA

2. Zara: The Largest
Spanish Clothes
Company

5. Introduction
 Zara (Spanish: [ˈθaɾa]) is a Spanish clothing and
accessories retailer based in Arteixo, Galicia, and
founded in 1975 by Amancio Ortega and Rosalía Mera.
 It is the flagship chain store of the Inditex group;
Inditex Corporation. Inditex is a the world's largest
fashion group to which other fashion brand names
belong such as as Zara Kids, Pull & Bear, Massimo
Dutti, Bershka, Stradivarius, Oysho, Zara
Home, Lefties and Uterqüe.

6.  ZARA changes their designs 2 weeks per time ,where Marks and
Spencer changes two months a time.
 Products of ZARA is very popular with young females (age of 24 -
25)
 Their product portfolio is comprises with men ,women and
kids(ZARA KIDS)clothes, shoes, cosmetics,and complements.
 Company preferred to invest a percentage of revenue in opening
new stores rather than huge marketing campaigns.
 There are 1671 stores around the world.ZARA is a "fashion
imitator"company.
 ZARA turns around more than 2000 designs per annually , and
its revenue for 2012 is over 7 billion pounds.

7. Infrastructure
 Their factory is located in a city called La coruna
,Spain.It is the city which has the cheapest labor in the
country,but when compared to south Asian countries
the cost of labor is expensive in Spain.
 It offers flexibility and agility to push new design to
the final selling point fast.

8. Human Resource Management
 ZARA recruits school leavers or fresh
undergraduates.so most of the time job at ZARA's is
their first job.
 ZARA's always liked fresh, energetic young individuals
because they are free from family commitments and
they can focus more on their job.

9. Technological Development
 ZARA has agents .
 These agents are sent to night clubs ,high class social
events to pick up latest designs so within 6 hours using
technology they sent the sketches to the factory with
slight differences in the design.

11. Operations
 Factory in spain is equipped with flexible
manufacturing systems. (FMS)for fast turn around in
designs and productions.
 cost of labour is not cheap and focused on productivity
and efficiency.
 they do have 12 days lead time.

12. Marketing and Sales
 Target customers are young females who are 24 years
and 25 years.
 ZARA dont advertise much on media.but once, they
put up a large poster on a high wall in a tall building.
everyone surprised why did they put up a poster like
that .reason was next to that building there was a
university located in a tall building as same as the
other.so when the young girls go to each floor the
poster is visible.

13. Facilities
 they reach their target market by locating their stores
in prime town-centre locations.
 By reducing the manufactured quantity of each
style, Zara creates artificial scarcity and lowers the risk
of having stock it cannot sell.
 Scarcity in fashion increases desirability, which means
shoppers need to buy quickly as the item may not be
available next week.
 Zara only discounts 18% of its stock in sales, which is
half the industry average.

14. Inventory
 Stores place orders twice per week and the supply of
finished goods is matched to store demand.
 Production is then increased or decreased in the
flexible production facilities.
 Demand based production means there is very little
inventory in Zara’s supply chain, which results in
much lower working capital requirements.

15. Procurement /Inbound logistics
 ZARA buys its raw materials from Italy, Spain, and
Greece.Reason is final product can be push to the final
selling point quickly.suppliers have agreed to supply
material within 5 days to ZARA's facility in spain.due
to this most of the inbound logistics are road
haulage.(mainly trucks)

16. Pricing
 As production is carried out in Spain where average
wages are higher than low cost Asian countries so
factory wage costs will be higher than
competitors, which will affect margins.

17. Delivery
 Deliveries typically arrive one to two days after
ordering with most deliveries arriving by truck from
the Spanish factories. Clothes are then put straight
onto the sales floor and are available to purchase.
 Own railway infrastructure

18. Strengths
 It produces about 11,000 distinct items annually
compared with 2,000 to 4,000 items for its key
competitors.
 The company can design a new product and have
finished goods in its stores in four to five weeks; it can
modify existing items in as little as two weeks.
 Shortening the product life cycle means greater
success in meeting consumer preferences.

19. Contd ….
 An average high-street store in Spain expects
customers to visit three times a year. That goes up to 17
times for Zara.
 50% of the products Zara sells are manufactured in
Spain, 26% in the rest of Europe, and 24% in Asian
and African countries and the rest of the world.