Appendix 4: Zara’s Supply Chain
Supplier Network Production Customer Network
Stores
(1,700 in 78 countries)
Transforming
Resources
(Facilities, staff)
S
Adapted from Source: Merdith and Shafer (1999) Operations Management for MBAs. New York, John Wiley & Sons Inc.
Support activities
Infrastructure:
Multi-national company, wholly-owned subsidiary of Inditex group, geographically centralised core operations, standardised business model and corporate services from parent company
Human Resource Mgt:
Corporate HR services provided by Inditex (as above), environmental and ethical CSR policies, collegiate culture
Technology Development:
Bespoke IT systems developed in-house, in-house design expertise, product and process research and development
Procurement:
Vertical integration, long term relationships with and close proximity to suppliers, CSR policy applied to supplier contracts
Inbound Logistics
Vertical integration
Long-term supplier relationships
Operations
Differentiated products designed and manufactured
“Just in Time” manufacturing
Centrally controlled operations (The Cube)
Outbound Logistics
Large scale Distribution Centres
Products tagged prior to distribution to stores
Backward vertical integration
Marketing & Sales
Little advertising
Few markdowns
CRM captures data on buying behaviour / sales patterns
E-commerce
Service
CRM captures customer opinion on product designs
Customer-centric business model translates into service differentiation
Source: From Competitive Advantage: Creating and Sustaining Superior Performance by M E Porter, 1985
Appendix 3: Zara Business Process Configuration
Channel
% of total production
Primary purpose
Strategic priorities
Differences in process activities
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