Amancio Ortega Gaona used the expertise from working for La Coruna as an errand boy starting in 1949, to determine that costs in the supply chain were built up in distinct areas. From his past experiences he learned to reduce costs and to manufacture more efficiently. Inditex runs six businesses that do business as Zara, Massimo Dutti, Pull & bear, Bershka, Stradivarius, and Oysho. Compared to the others companies Zara uses key supply chain drivers that contribute to its efficient supply chain network. Zara’s channel structure was one important measure of their supply chain which contributed to large profit margins and quick inventory turns.
The key advantage in the supply chain happened after Ortega purchased his first computer; this led to his fascination of information technology, ultimately making a successful business network. The transparency of information throughout the supply chain beginning at the retailer reduced uncertain demand for each type of clothing needed for manufacturing. During the early 1990s Zara used customer store data and improved its logistics with investments, this allowed them to develop new systems for internal development. The advanced information technology that Zara used separated them from the competition by allowing them to carrying 250% more products in inventory. Zara managed its entire supply chain starting with sourcing, the company owned Comditel which dealt with 200 external raw fabric suppliers used for manufacturing their apparel. It was this partnership that allowed Zara to source all of its fabric from one company. Having one supplier allowed Zara to easily negotiate for materials needed, since the supplier knew it had no competition. This also allowed Zara to have short turnaround times because they did not have to search for the best supplier. The fast turn-around in the manufacturing design process had a large impact on the amount of inventory Zara carried in its distribution centers which would also...