SCM can deal with more issues such as

SCM
520

Yuntao
Wu

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Case
1: Rapid-Fire Fulfillment

 

 

Q.A

l  Speed and quality:
Zara uses three lines which include women’s line, men’s line, and kids’ line to
produce their apparel products. These organized three groups increase both
speed and the quality. Moreover, Zara uses “postponement” in one of their
factory in Benetton which also increases these two objectives.

l  Reliability: Zara
has precise rhythm and they stick to the rhythm. It means they have specific deadlines
and all the people related should follow the guideline. So, their order cycle
is consistency. Also, they use airplanes and trucks to ship their products
compare to other company use ships and trains. As a result, their order always
on time as what they promised.

l  Flexibility: Zara
leverage its capital assets to increase supply chain flexibility. More capital
assets mean less capacity utilization, and this made them more flexibility
because they can deal with more issues such as unpredictable demand.

 

Q.B

l  Zara choose to
make their relatively more complicated products by themselves to ensure
flexibility.

l  Keeping more
capital assets to increase supply chain flexibility.

l  Zara operate three
channels to make products which is more expensive, but the information in each
channel is faster, smoother, and more direct. It increases the responsiveness.

l  It’s supply chain
not only focus on one single part, but in the whole system. Although some
single method like: using small batches, shipping every two weeks, and shipping
some garments on hangers will increase costs, its precise rhythm eventually let
Zara carry less inventory cost so that they can maintain a higher profit margin
on sales.

 

Q.C

l  The constant flow
of updated data mitigates the bullwhip effect-the tendency of supply chains to
amplify small disturbances. Zara allows almost half of changes (40%~50%) to
their orders when the new season begins compare to the average of 20%. This
method avoids expensive surplus products, and equip with their efficient
information, it has more positive effect in the industry. 

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