Zara case study

Supply Chain Practices of Three European Apparel Companies: Zara, H&M and Benetton
I. ZARA
Zara, the flagship brand of the Spain-based Inditex Group, operated through 1,058 stores located in 69 countries across the world as of March 2008. Zara pioneered the concept of customized retailing and was able to conceptualize the garment, develop, and deliver it to the stores within two to three weeks.The key to Zara’s success was its vertically integrated supply chain where design, production, distribution, and retailing were integrated. Zara was founded by Amancio Ortega Gaona (Ortega), in A Coruña, Spain and the first store was opened in 1975. Between 1976 and 1984, Zara extended its presence to major Spanish cities. The first store outside Spain was opened in 1988 in Portugal. From thenon, Zara expanded rapidly in international markets. Design Zara’s design process began with spotting the trends across the world. The details of the trends in vogue were then passed on to the design and production center at Zara’s headquarters in Spain. Zara had a dedicated design team in Arteixo, A Coruña, in northern Spain. Ideas for new designs or for modifications to be made in existing designsmainly came from Zara’s stores. The store managers and sales staff updated the head office every day about the moving stock and provided inputs regarding the new lines, colors, styles, and fabrics that customers were demanding. Another source of inspiration for the new designs was the team of designers who traveled across the world looking for new designs and the emerging trends. Zara’s employeeskept scouting around at fashion shows, discotheques, universities, and watched movies and music videos to spot new trends. The store managers across Zara’s stores placed orders twice a week, on Wednesdays and Saturdays in Southern Europe and Spain and on Tuesdays and Fridays in the other parts of the world. At the Zara headquarters, the store specialists collected the information gathered fromdifferent stores across the globe. Each of the store specialists was responsible for a group of stores. Most of the store specialists would have had worked as store managers and possessed a deep knowledge about managing stores. At the design and production center, a team of 200 designers churned out about 60 styles each. The center had three different units -- one each for women’s, men’s, andchildren’s clothing lines. The designers were encouraged to experiment, but within Zara’s defined parameters. The store specialists provided the designers with an outline of the new styles, designs, and fabric as demanded by the stores. The procurement and production managers provided inputs regarding the capacity and manufacturing costs. The designers came out with the design specifications and thetechnical brief. With all the teams working in tandem, the prototypes were ready within a few hours.
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Production Once the team came out with the final design, a prototype was made. It did not take much time as the fabric was already available with Zara. The teams decided on the sizes and the number of garments to be produced (Zara procured unprocessed and undyed fabric and colored the productbased on the need. Zara sourced undyed fabric from the Far East, Morocco, and India). Fabric was then sent for cutting to Zara’s own automated cutting facilities. Several layers of fabric, meant for garments of a particular design, were laid out on cutting tables, vacuum sealed, and cut by machines, based on a computer layout of the sample pieces. The layout was prepared so as to minimize wastage.The cut pieces were then bar-coded and marked for sewing. The pieces were distributed for sewing among 350 small workshops in Spain and northern Portugal (About 60% of Zara’s total production was carried out in Portugal and Spain). These workshops, which were not owned by Zara, employed about 11,000 workers and were provided with a set of instructions on how to sew the garment. The garments were...