Zara Rapid Fulfillment

491 Words2 Pages
Zara- Rapid Fire Fulfillment Zara is a company started by Amancio Ortega, from Spain and has become the richest man in Spain. Ortega said, to be successful, “you need to have five fingers touching the factory and five touching the customer.” Translation: Control what happens to your product until the customer buys it. (Harvard Business Review). Small batches of Zara products are manufactured and distributed because they don’t rely on others instead they manage all of the designs, distributing, warehousing and the logistic functions. Zara’s growing company has a strategy that’s highly responsive to prices that are affordable and the changing trends. New garments by the company can be designed, produced, and delivered then displayed in stores throughout the world in a mere 15 days. Being that Zara offer different designs very quick with unlimited quantities and collects 85% on retail clothing at full price when others averages 60% to 70%. By doing this their margins are higher on sale than their competitors. By having rapid timing and synchronicity, Zara spends its money on things that can help increase the responsiveness and speed of the chain. Zara can reduce inventories and forecast error by postponement of the decisions after knowing the trends. The apparel industry cycle time has averaged more than six months. For five to six weeks cycle time has been achieved. By having this speed Zara can introduce new designs weekly and every three to four weeks 75% of their merchandise is displayed, which matches the customers preferences more than competitors. Most of Zara’s products are sold at full price with half the markdowns in their stores than competitors. Zara’s retail stores have strict time to keep order placed and stocks received. Before the items are shipped they already have a price tag on them so they want be crowded at the store and encourage occasional
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