Integration is an act or instance of combining into an integral whole and non-integration is combining or coordinating separate elements to provide a harmonious, interrelated whole.
There are many advantages of an integrated supply chain such as: it is easier to negotiate with suppliers, they offer flexibility and ability to adapt for future plans, improved efficiency, lower costs,
reduced waste and ability to stay ahead of trends.
All of these can be seen in Zara’s supply chain.
Zara operates with a vertical integrated supply chain meaning Zara’s supply chain is totally owned by the company; this combined with a couple of other factors means Zara is one of the most effective brands in the UK in terms of getting trends straight from the catwalk into stores in a matter of a couple of weeks despite producing over 450 million items per year.
Zara uses a technique called ‘just in time production’ in order to produce garments that will still be on trend when they hit stores, this means they only commit six months in advance to between 15-25% of stock and lock 50-60% of the line at the start of the season so that up to 35% of stock are designed and manufactured mid season ensuring that what they are putting out is on trend and selling well in other stores.
They also ensure that their factories reserve 85% of capacity for mid season adjustments in order to keep up with both the trends and fads of the season.
Zara also relies on European manufacturing such as the fabric sourcing, cutting and sewing facilities as although the wage requirements are higher in Europe, the turnaround time is significantly better.
Feedback plays a big part in Zara’s success as they take feedback on what shoppers are looking for, what they dislike and what is selling best that store managers provide and instantly send this to designers who begin work on new designs to fit what customers want.
INTEGRATED VS NON-INTEGRATED