Inditex also own other retailer brands, there are 1,770 Zara stores in 86 countries around the world, Zara represents a massive 66% of Inditex totals sales and this is all due to the way there supply chain works.
Zara uses an integrated supply chain in order to achieve the produce of 450 million items a year. They keep their supply chain and there turnover of product running so quickly by ensuring that they have small batch deliveries twice a week to all of their stores around the world at a specific time to ensure that they are running the supply chain efficiently.
Zara focuses using diversification to ensure their growth as a company, this is done by using vertical integration. It does this by adapting couture designs, then manufactures them, then distributes and finally retail the clothes within 2 weeks of the original design first appearing on the cat walks. Zara’s key to success is the speed in which they can turnover their product from the catwalk onto the shop floor this means that the supply chain is an extremely important aspect to their business. If Zara had non-integrated supply chain, they wouldn’t be able to monitor their product and would most definitely not be able to create ‘fast fashion’ this is due to the fact they would have less control and it would take longer to keep up to date with each aspect of the supply chain. However, a smaller business with less dependants within their supply chain would find it easier to use a non-integrated supply chain.
What works better? Integrated or non-integrated supply chains?
Within this article I will be establishing what type of supply chain that popular high street retailer Zara use and why it works best for them and why that form of supply chain may not work best for other retailers.
First of all, let’s start with what actually are integrated and non-integrated supply chains? An integrated supply chain is concerned with improved co-ordination so that material and information flows efficiently through the supply chain, this can lead to improved performance of the supply chain especially when there is technology involved. A non- integrated supply chain is when a business has disconnected flow of product and information, they have limited ability to react to customers’ requests, unpredictable product delivery rate, limited visibility on shipment information and performance based on functional activities. So let’s find out how Zara makes their supply chain so efficient and effective.
As a brand Zara value their speed and responsiveness to the latest fashion trends within the high end fashion houses. They are owned by the international distribution group named inditex.