Question

What challenges did Zara focus on supply chain efficiency create? Are all such systems setimed to suffer such growing pains?

Answer 1

Zara supply chain efficiency
Zara supplies 11000 unique items per year in thousands of stores worldwide. Hence its supply chain efficiency is very critical for Zara. The company has highly automated distribution centre called in Spain. The target market of Zara is mainly women between 24 to 35 years old. Zara maintains less inventory as it regularly produce unique designs. zara has 12 inventory turns per year whereas its competitor and has only 3 to 4 inventory turn per year. Stores places delivery order twice per week and inventory is received within 2 days. Continuous attention is required of this fast moving supply chain of Zara, and supply chain manager constantly keep track of customer demand so as to make adjustment in manufacturing and supply chain operations.