Zara, a flagship chain store of Inditex is a fast fashion for youth. It has turned control over garment factories into a competitive advantage. It has differentiated itself by reacting quickly to changing market trends by supplying current fashion in just 2-3 weeks while other brands take 9 to 12 months. Zara is innovative in its operation by controlling the design, production and distribution of clothes to itself. It uses IT tools through which the shop manager keeps an eye on the current fashion, the demand of the customers and communicates this information immediately to the design team at headquarters. They place orders for what they think would sell. Zara did not spend money on advertisements; instead they spend money on anything that would enforce speed and responsiveness of the business chain. They invest heavily in production and distribution facilities to fluctuating demand.
Zara’s supply chain is vertically integrated permitting rapid reaction to fashion changes. Design policy is mix and match and it creates a library of designs guided by observing fashion trends. It has raw material buying and finishing team which has capabilities to deliver even at last minute changes. Then a dedicated team of 55-60 designers are involved in creating a portfolio at the beginning of each season and then carefully looking at the latest fashion trends, they would adapt to the portfolio models and create 5-6 new designs every day. These product designs are tested in the real market and the order winners are launched and scheduled for mass production. Since the warehouse, the cutting facilities and internal logistics are all controlled in Mexico for North and Central America, this reduces the heavy import tariffs and also the transportation lead times.
On the other hand, M&S supply chain is a traditional textile apparel chain. A buying team defines cloth specification one year before delivery, then product developers define material and styles, merchandisers negotiate on...