SCM520YuntaoWuCase1: Rapid-Fire Fulfillment Q.Al Speed and quality:Zara uses three lines which include women’s line, men’s line, and kids’ line toproduce their apparel products. These organized three groups increase bothspeed and the quality. Moreover, Zara uses “postponement” in one of theirfactory in Benetton which also increases these two objectives.l Reliability: Zarahas precise rhythm and they stick to the rhythm. It means they have specific deadlinesand all the people related should follow the guideline.
So, their order cycleis consistency. Also, they use airplanes and trucks to ship their productscompare to other company use ships and trains. As a result, their order alwayson time as what they promised.
l Flexibility: Zaraleverage its capital assets to increase supply chain flexibility. More capitalassets mean less capacity utilization, and this made them more flexibilitybecause they can deal with more issues such as unpredictable demand. Q.Bl Zara choose tomake their relatively more complicated products by themselves to ensureflexibility.l Keeping morecapital assets to increase supply chain flexibility.l Zara operate threechannels to make products which is more expensive, but the information in eachchannel is faster, smoother, and more direct. It increases the responsiveness.
l It’s supply chainnot only focus on one single part, but in the whole system. Although somesingle method like: using small batches, shipping every two weeks, and shippingsome garments on hangers will increase costs, its precise rhythm eventually letZara carry less inventory cost so that they can maintain a higher profit marginon sales. Q.Cl The constant flowof updated data mitigates the bullwhip effect-the tendency of supply chains toamplify small disturbances. Zara allows almost half of changes (40%~50%) totheir orders when the new season begins compare to the average of 20%.
Thismethod avoids expensive surplus products, and equip with their efficientinformation, it has more positive effect in the industry.