blog




  • Essay / Zara - 1753

    Decision makingDecision making at Zara is very disintegrated. Operations such as ordering, fulfillment, design and manufacturing at Zara are based on important decisions made at a lower level by customer-facing employees. These decisions sometimes don't even require senior management review. A group of salespeople would decide which existing and new clothes to place an order for based on the sales of a particular store. Another group of ads determined the future production of an SKU (stock keeping unit) based on the balance between demand for clothing in stores and the supply of finished clothing from factories to the distribution center. A group of adverts predicted the changing tastes of young, fashion-conscious urban dwellers. These decisions helped create variety in the design of the new stocks. These decisions also helped Zara introduce new design collections throughout the year based on current customer demand. This fast and autonomous decision-making approach works wonders for Zara and seems consistent with its goals. This helps Zara follow JIT (just in time) technique. Since salespeople are a group of employees who actually observe the demand and supply trends of a Zara store, they are in a better position to make quick decisions. This helps Zara accelerate the entire vertically integrated supply chain, making products available just in time for sale. A senior manager sitting far away will not be able to judge the store's requirements as well as an employee working in the store. I worked for Singapore Airlines as a flight attendant and customer facing employee, we had the freedom to respond to a passenger's requests at our discretion...... middle of paper .. ....eat together when one store is out of a particular item of clothing but the other store has it in stock.8) The stores will also be able to communicate better and perhaps trade their inventory when a particular stock is doing better in store and vice versa. This will help reduce production costs because the store that is short of its popular clothing items will not ask for more. ConclusionZara has a great and unique operational strategy that helps it gain a competitive advantage. However, at the same time it lacks IT support. It needs a good IT strategy that will support its supply chain and improve its systems to support its operational strategy. A fast-paced retail company like Zara needs to strengthen its IT system by getting rid of its aging systems. They need to do it quickly before another company overtakes them in this race..