ZARA is a miracle in the clothing industry. It has created a new road between the traditional top clothing brands and mass clothing brands, and created a precedent for fast fashion. ZARA's success is mainly attributed to its unique and fast supply chain system and advanced information technology.
Competitive advantage of 1 ZARA
ZARA provides customers with "affordable fast fashion", that is, they can buy the fashionable fashion they need at a low price. This competitive advantage is mainly based on the following points:
(1) Short lead time: lead time is the time from design to putting ready-made clothes on the counter for sale. Clothing industry in China generally lasts for 6 ~ 9 months, and internationally renowned brands generally last for 120 days. ZARA has a minimum of 7 days, which is generally 12 days. Shorter delivery time ensures that ZARA's design is always customer-oriented.
(2) More fashions, less fashions: ZARA launches about 65,438+020,000 fashions a year, and the number of each fashion is very limited. Usually there are only two fashions in a specialty store, and they are not replenished after being sold out. Various small amounts have cultivated a large number of loyal and satisfied customers.
(3) Low price strategy: ZARA does not design new fashions, but imitates the designs of top brands. So similar products, ZARA can be sold at a price lower than that of top clothing brands.
2 ZARA supply chain system
2. 1 Cross-departmental team design
ZARA's design team consists of designers, marketing experts and purchasing experts. ZARA's store manager communicates directly with customers, collects first-hand information, and quickly feeds it back to the headquarters database to provide reference materials for designers. ZARA's designers travel to Milan, Paris and other major fashion shows every day, observe the cutting-edge design concepts and design elements, and initially draw sketches. Designers work with purchasing experts and marketing experts to determine the final draft of design, production cost and output. It is precisely because of this "trinity" [1] team design method that ZARA greatly shortens the delivery time of products and can also meet the needs of customers at low prices.
2.2 Global Procurement and Delay Strategy
ZARA mainly relies on the clothing production, purchasing and fabric processing departments of the parent company Inditex to provide support. Inditex buys raw fabrics from Spain, the Far East, India and Morocco [2], ZARA buys dyes and 40% fabrics from Inditex, and the rest raw materials are processed and produced by its own factory [3]. By keeping control of the dyeing and processing fields, ZARA has the ability to produce on demand and can provide the required fabrics for new styles. In addition, ZARA gains more flexibility through the delay strategy. ZARA is more flexible to deal with the color change in the middle of the season by purchasing more than 50% undyed fabrics [3]. By adopting the delay strategy, ZARA can provide customers with various styles and colors of fashion without increasing the inventory cost.
2.3 Vertical integrated production
A large part of ZARA's supply chain is completed in its own factory, including product design, 50% product production, logistics management and retail [3]. ZARA's unique production mode provides it with four important advantages: First, ZARA can respond to changes in customer demand more quickly. ZARA has its own factory, which can increase or decrease the production capacity of some special items according to the real needs of customers without communicating with outsourcers, thus adjusting the rhythm of the whole supply chain. Second, ZARA improves the efficiency of the whole supply chain by increasing the control of planning, capacity and decision-making of different nodes in the whole supply chain. Third, ZARA can communicate and share information in the whole supply chain more efficiently. Fourth, all nodes in the supply chain can work towards the same goal, that is, shortening the lead time and providing customers with low-priced products.
2.4 product distribution
ZARA dug 200 miles underground (1 mile ≈ 1.6 km) between the Spanish factory and more than 400 foundries, set up an underground conveyor belt network, and used underground pipelines to transport clothing raw materials and semi-finished products, which doubled the transportation efficiency and shortened the time [1]. In order to avoid wasting time by manual selection, ZARA uses optical reading tools to sort products, and the sorting equipment can handle 60,000 garments per hour. After sorting, the products will be transported to two distribution centers in La Coruna and Zaragoza respectively, and then the products will be transported to their destinations by trucks or planes by third-party logistics. All trucks and planes must follow a fixed schedule, and all store managers must place orders according to a strict schedule. ZARA is very strict about time. All goods must reach European stores within 24 hours, American stores within 48 hours and Japanese stores within 72 hours [3]. ZARA's rapid delivery system ensures that its products can be listed in stores all over the world at the same time.
3 information technology
In order to better fit ZARA's unique business process and reduce it procurement costs, most of ZARA's information systems are independently developed. The application of IT system can quickly connect ZARA's product design, global procurement, vertically integrated production, distribution and sales, and accelerate the operation of supply chain. ZARA's professional fashion buyers send the latest global trend information back to the headquarters database through the information system to provide designers with design decision-making information. ZARA global store managers are each equipped with a PDA, which can directly communicate with the Spanish headquarters, including customer demand information and order information. The application of ZARA IT system greatly shortens the delivery time, makes the design and production of products fully meet the needs of customers, realizes multi-batch and small-batch transportation in the clothing industry, and breaks through the constraints of economies of scale.
In the clothing industry, ZARA has created an industry miracle with its unique rapid supply chain system and its own IT technology. However, ZARA's organizational structure also adds risks to the whole supply chain: totally relying on its own assets, including production, logistics and IT, may lead to a crisis in ZARA's future global expansion. In addition, since all ZARA's production activities are concentrated in Spain, with the changes in oil prices and European labor prices, ZARA's low-price strategy may be difficult to maintain. Whether ZARA can maintain its competitive advantage in the future development needs further study.