The document outlines Zara's fast fashion business model and supply chain operations, which focuses on rapid design, production, and distribution of new fashion items to stores within weeks in order to stay on top of constantly changing trends, allowing Zara to maintain its competitive advantage over rivals with shorter inventory turnovers and product lifecycles. Zara's centralized operations and extensive use of data and technology allows it to quickly respond to demand changes through flexible procurement, production planning, and high-velocity logistics. This responsive supply chain model has supported Zara's global expansion to over 1700 stores in 78 countries while continually renewing its inventory with around 11,

1. Zargistics Team:
Blake VanderBerg - 821278942
John Whelly - 820501401
Jessica Weingert - 820853059
Krisztina Virag - 821250982
Jenna Zucker - 820920437
Akwaugo Udenze - 821218781

2. • Zara is a Spanish clothing retailer
• 1700 stores
• 78 countries worldwide
• Zara practices fast fashion – trends moves from the runway to stores within
weeks, as opposed to months.
• Zara’s supply chain has undergone tremendous changes in order to sustain its
competitive advantage in today’s market
• Zara has continually maintained its mission to provide fast, affordable, and
fashionable items

3. Inventory Management
• Focus on reducing
response time
• Launched approximately
11,000 new items per
year, compared to 2,000 -
4,000 for H&M and Gap

4. Inventory Management
• Stock outs are not
uncommon
• Short shelf life attracts more
customers more often
• Zara holds 6 days worth of
inventory, while H&M holds
52 days, and Spanish retailer
Cortefiel holds 94 days of
inventory

5. Forecasting
 Extensive market research
 Quick input and output
response
 Frequent new styles
• Near-term forecasts
• Short product life cycles to
reduce errors and improve
current products
• Customer feedback

6. Procurement
• Keeps approx. half of its production in-
house
• Separate procurement staff for each
clothing line
• Procures basic textiles from global suppliers
• Uncomplicated items are outsourced to
China
• Difficult items are produced in Zara factories
and by local subcontractors
• Most suppliers are located in close proximity
to its distribution centers
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7. Production Planning
• Centralized Design & Production
Centre
• Constant flow of data throughout
the supply chain
• Zara allows its retailers to change
40%-50% of its orders
• Factories operate on a single-shift
mentality, and can change quickly
according to unforeseen demands
• Under produces products in order
to create scarcity value
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8. Warehousing
• “High-velocity” shipping
• Merchandise is selected, sorted, and routed to the “lungs” of the
warehouse
• Merchandise is delivered, Retailers hold products in local
distribution centres or in retail store stockrooms
• “High-velocity” shipping relies on rapid information flows

9. Warehousing
• Stores are electronically linked to the company’s headquarters
• Logistics system is based on two core concepts: speed and
flexibility
• Currently building a new state-of-the-art warehouse and facility
complex in Zaragoza, Spain

10. Transportation
• Effective and efficient transportation
network
• Fast delivery time
• Coordinates with all aspects of logistics
• Quick response in supply chain
• Ability to distribute merchandise within
2 weeks
• Final step in order fulfillment
• Promotes service quality

11. Customer Service
• Founder: Amancio Ortega
• Customer Service
• Elements & Measures of Customer Service
• Product Availability
• Order Cycle Time
• Logistics Operations
• Response to Certain Events
• Stock-outs
• Extra Inventory
• Future outlook

12. Performance Measurement
• Dedicated to creating time to market
efficiency
• Order fulfillment and customer RESPONSIVE
satisfaction
• Tight linkages between demand and
supply EFFICIENCY
• Improve performance in accordance with
EFFECTIVENES
changes in demand S
• Customer loyalty and brand recognition
• Expansion into a global market

13. Technology
• Competition: 2% of revenue and 2.5% workforce in IT
• Zara: 0.5% of revenue and 0.5% workforce in IT
• In store:
• handheld PDA
bi-weekly order, communication with HQ, feedback from
customers, inventory.
• In Store: DOS=old, slow.
• Suggested: POS=speed, efficiency, connectivity.
• WWW: Online stores open now. Better late than never.
• iPad + Smart phone apps
• In house: 200km tracks=60,000 items/hour
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14. • Short-term goals should see Zara expand into North American and Asian
markets as well as continued growth throughout Europe
• In the future, Zara should increase its production outsourcing to Asian
countries to reduce costs
• Overall, Zara seems to be heading in the right direction as the company is
growing at a tremendous rate and does not show any signs of slowing down