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Zara

Zara. Our Team. Presentation Agenda. Introduction Competitors Updates Challenges Recommendations. Introduction. About Zara. Founded by Amancio  Ortega In 1975, the first Zara  store was  opened  in  La  Coruna, Spain

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Zara

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  1. Zara

  2. Our Team

  3. Presentation Agenda Introduction Competitors Updates Challenges Recommendations

  4. Introduction

  5. About Zara Founded by Amancio Ortega In 1975, the first Zara  store was  opened  in  La  Coruna, Spain Inditex  was  formed  as  the  holding  company  atop  of Zara, other  retail  chains  &  a  network  of  internally ownedsuppliers (1985)

  6. About Zara Focused  on  opening  stores in  prime  city  locations Rapid response to market demands Offer new clothing styles faster than its competitors  Inditexhas become one of the world's largest clothes makers in the fast fashion industry 1,671 branches in 78 countries worldwide

  7. Zara’s Supply Chain Maintains control over its product design, manufacturing, distribution & retailing operations Consists of 4 Phases:

  8. Competition

  9. Competitor Closest competitor Hennes and Maurtiz (H&M) Founded on 1947, Sweden Innovating around design and distribution Supply Chain Phases Design, Production, Distribution and Retail

  10. H&M’s Supply Chain Production Phase Outsource production process 60% in Asia, 40% in Europe Low production cost to maximize profit at Asia Implications to Zara No production outsourcing Higher overall production cost

  11. H&M’s Supply Chain Distribution Phase Distribution center(DC) located at every country Daily replenishment to increase stock turnover rate Able to meet customer’s demand on time Implications to Zara 2 Large DCs located in Spain Slower replenishment rate Unable to meet customer’s demand on time

  12. H&M’s Supply Chain Retail Phase 40% lower product selling cost compared to most competitors Implication to Zara Higher product cost due to higher production cost

  13. Competitors Challenges Zara faced against H&M Higher production cost Slower replenishment rate Slower at meeting customer demand

  14. Updates on Zara’s SCM

  15. Updates on Zara’s SCM Retailer’s Work Process Distribution Network and Centre Inventory Management

  16. Retailer’s Work Process Shifted to third party logistics providers Shifted to factories Enhancements made to PDA

  17. Distribution Network and Centre Consolidated transportation across Zara’s different brands DCs are equipped to handle small scale customer orders

  18. Inventory Management Implemented sophisticated inventory allocation model

  19. Challenges Faced

  20. Challenges Limitation of company wide interconnectivity Obsolescence and Limitation of Technologies used

  21. Challenge 1 • Discrepancies between orders and sales data • More time and energy spent on administrative work

  22. Challenge 2

  23. Mobile Enterprise Applications

  24. Our Recommendation Run complete OS software Useful functions for SCM execution Gradually Replace PDAs

  25. Benefits Timeliness and Correctness Instant access and updates Improve cycle time & efficiency Employee Responsiveness Better “reachability” Scalibility & Updates  More functionalities

  26. Challenges Addressed Obsolescence of PDA Systems Technical support issues Limited Connectivity Information Sharing Data Discrepancy

  27. Feasibility Evaluation Cost Requirecustomizedapps Time Training for personnel

  28. Upgrade POS Terminals

  29. Our Recommendation Intuit-HP Retail Solution HP’s POS Software Full fledged Mouse & Keyboard Industry-proven software Gradual replacement of DOS systems  Phased Approach

  30. Benefits Interconnectivity between stores Merging of data into one system Precise measurement of stocks Global trends and developments Real-time information sharing React faster to sales information Improve decision making

  31. Challenges Addressed Limitations of Existing Network Automatically collect and process data Reduces need for calls & manual checks Increasing obsolescence of DOS Modern, widely supported OS Reduce reliance on sole vendor Future-proof their operations

  32. Feasibility Evaluation Staff adaptability to change Need to ensure sufficient training Empower staff to fully utilize system Risks associated with change Use phased implementation approach Test stability on pilot stores

  33. Conclusion

  34. Conclusion ZARA’s competitor (H&M) The need to stay competitive ZARA’s SCM updates Importance of continual innovation Challenges & Recommendations Innovations through cutting-edge technologies

  35. Questions & Answers

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