Supply Chain in the Readymade Garments Industry (Zara Case Study)
Written by: Dr. Amany Aabed
Lecturer at the Fashion Department , High Institute of Applied Arts, 6th of October City.
A supply chain is a system of organizations, people,
activities, information, and resources involved in moving a product or service
from supplier to customer. Suply chain is also known as oversight of maerials,
information, and information as they move in a process from supplier to
manufacturer to wholesaler to retailer to consumer. Supply chain activities
involve the transformation for natural resource, raw materials and components
into a finished product that is delivered to the end customer in sophisticated
supply chain system. Supply chain management involves coordinating and
integrating these flows both within and among companies.
One of the industry that we always use everyday is
fashion industri. Fashion industry is one of the most primitive form of supply
chain management and its practices have been extended, adopted and become the best
practices that we use today.
One of the challenges of global fast fashion supply
chain is the marking-down of slow-moving items at the end of the season, an
example which highlights the rationale behind a number of important decisions
made by companies in relation to network design and inventory location.
Zara is one of the main clothing and accessory
retailers internationally based in Spain. They are mainly focused on new,
trendy and cutting edge fashion for men and women alike. Currently it operates
in 88 different markets worldwide, their main distributors are in Madrid and
Zaragoza. Every two weeks Zara changes their desaign of its clothing compared to
their competitors which change their design every two or three months. 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.
Factories can increase and decrease production quickly,
thus there is less inventory in the supply chain and less need to finance that
inventory with working capital. They do only 50 – 60 percent of their
manufacturing in advance versus the 80 – 90 percent done by competitors.
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. This way fabric
manufacturers can make quick deliveries of bulk quantities of fabric directly
to the Zara DC – the Cube. The company purchases raw fabric from suppliers in
Italy, Spain, Portugal and Greece. And those suppliers deliver within 5 days of
orders being placed. Inbound logistics from suppliers are mostly
by truck.
The Cube is 464,500 square meters (5 million square
feet), and highly automated with
underground monorail links to 11 factories within a
16 km (10 mile ) radius of the Cube. All raw materials pass through the cube
and all finished goods also pass through on their way to stores. The diagram
below illustrates Zara’s supply chain model.
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 cut fabric to these factories for dyeing and assembly
into clothing items. The factories also use the monorail system to return finished
products to the Cube for shipment to stores. Here are some facts about the
company’s manufacturing operations:
Zara competes on flexibility and agility instead of low
cost and cheap labor. They employ about 3,000 workers in manufacturing
operations in Spain at an average cost of 8.00 euro per hour compared to
average labor cost in Asia of about 0.40 euro per hour Zara factories in Spain
use flexible manufacturing systems for quick change over operations.
50% of all items are manufactured in Spain
26% in the rest of Europe
24% in Asia and Africa
The screenshot below illustrates how the Zara supply
chain is organized. Manufacturing is
centered in northwestern Spain where company headquarters
and the Cube are located. But for their main distribution and logistics hub
they chose a more centrally located facility. That facility is located in Zaragoza in a large logistics hub
developed by the Spanish government. Raw material is sent by suppliers to
Zara’s manufacturing center. Then finishedgar ments leave the Cube and are
transported to the Zara logistics hub in Zaragoza. And from there they are
delivered to stores around the world by truck and by plane.
Since the concept of supply chain management was
introduced, there has been a great deal of
confusion about what it actually involves. While some
managers and researchers continue to use supply chain management
interchangeably with logistics, there is an increasing understanding that it is
much more than logistics. In recent years, many authors have stressed the
importance of implementing supply chain management as part of a process
orientation to management. However, most of what is written about
supply chain management advocates business process reengineering and integration without
specifying the processes that are to be included in these efforts. It would be much easier for
management to implement a process orientation within their firm if there were clear guidelines
as to what the processes ought to be, what sub-processes and activities are
included, and how the processes interact with each other and with the
traditional functional silos. Further, how can the members of a supply chain
practice process integration if there is not a common understanding of what the
business processes are? The members of The Global Supply Chain Forum identified
eight business processes that must be implemented within a firm and then
linked up, as appropriate, with key supply chain members
In this paper, we provide strategic and operational descriptions of each of
these processes. Our goal is to provide:
1) companies with a common structure for
implementing supply chain management,
2) instructors with material that can be used in
teaching supply chain management, and
3) researchers with fertile groundwork for
delving more deeply into the issues within
each process and with their integration
between companies.
Referensi : http://www.journal.faa-design.com/pdf/7-4-abed.pdf
About the Author
1 komentar
Sourcing is a core part of Supply Chain Management. It's compulsory to source different products individually to maintain a production chain like yarn, fabrics, Dyes & Chem, Trims and Accessories and so on. Manual sourcing simultaneously loss the time and sometime it's a wast of money also. It's an era of digital marketing.Everyone interest on online Sourcing. That's why anyone can maintain a smooth supply chain management and increase production capacity.
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