Zara Clothing

The story behind the success of Zara Clothing:-

Source-https://www.scmglobe.com/zara-clothing-company-supply-chain/

A well-Organized Clothing industry- Some important point to be observed

• Zara changes its clothing designs every two weeks on average, while competitors change their designs every two or three months
• It does not spend much money on advertising.
• It carries about 11,000 distinct items per year in thousands of stores worldwide compared to competitors that carry 2,000 to 4,000 items per year in their stores. 
• its supply chain is a huge, highly automated distribution center (DC) called “The Cube”.
• Agents for the company are always scouting out new fashion trends at clubs and social gatherings. 
• New items can be designed and out to the stores in 4 – 6 weeks, and existing items can be modified in 2 weeks.
•  Zara does not have lots of excess inventory, nor does it need to do big mark-downs on its clothing items.
• In Spain, customers visit Zara stores 17 times per year on average compared to 3 times per year for competitors.
• short term focused order cycles make forecasts very accurate, much more accurate than competitors who may order every two weeks or every month.
• Clothing items are priced based on market demand, not on the cost of manufacture.
• Annually there is 10 percent of inventory unsold compared to industry averages of 17 – 20 percent.

Strong Supply Chain-

• The 11 Zara owned factories are connected to the Cube by underground tunnels with high-speed monorails (about 200 kilometers or 124 miles of rails) to move the cut fabric to these factories for dyeing and assembly into clothing items.
• Zara buys large quantities of only a few types of fabric (just four or five types, but they can change from year to year), and does the garment design and related cutting and dyeing in-house.
• Zara can deliver garments to stores worldwide in just a few days: China – 48 hrs; Europe – 24 hrs; Japan – 72 hrs; United States – 48 hrs. It uses trucks to deliver to stores in Europe and uses air freight to ship clothes to other markets.
• Zara stores respond practically in real-time as styles and customer preferences evolve.

Sourcehttps://www.scmglobe.com/zara-clothing-company-supply-chain/