One of the pivotal examples of successful operations management in the retail sector is the operations management practices in ZARA. From just a single shop in La Coruna, Zara's retail chain has expanded to about 650 stores and it has its operations in more than 50 countries across the world. While major competitors across the world focus on bulk production in order to minimize cost, Zara focuses more on delivering fashion faster to its customer. The vertically integrated supply chain of Zara analyses and communicates the latest trends in fashion, and thereby designs, produces and delivers the fashion within fifteen days on the shelves. Zara has also effectively illustrated the practice of Six Sigma in order to mitigate the risks of their continuous innovation of fashion.
Zara focuses on the apparel business more as a consumption market rather than being a commodity market. Hence Zara focuses on speed and thus looks at continuous reduction of response time.
Zara's value chain comprises of members who dedicated work closely with customers in spotting new trends of demand in fashion. The average age of the designing team is 26 years. These designers spot the latest trends from different sources such as fashion shows, magazines and trade fairs. They have the ability to launch new trends, designs and variation of products. Most of the designs developed are done using CAD. This is a major reason for making the manufacturing process rapid. Zara is following the method of inspection in order to keep a check on the quality of its products. The quality control teams at Zara inspected the designs before placing them in stores. Apart from this, Zara has an effective vertically integrated supply chain which is very closely integrated with the customers. It is from here that the latest trends in fashion are identified and the garments are produced accordingly and delivered to stores within a period of 2 weeks. Zara has a centralized distribution unit that operates from its head office in La Coruna. Zara uses all modes transportation for shipment namely trucks, trains and even planes in some cases. Trucks are loaded as per the specific order in the evening and they are dispatched at night at a specific time. In addition, Zara designs around 10,000 new models every year and replenishes ranges within every one of its 650 retail stores twice per week, but in strictly limited quantities of stock. This ensures Zara’s brand promise to customers of exclusivity, and also of design freshness.
Employees at Zara is one of the main reasons for the effective quick response system of Zara. The HR policies revolve around high level of employee motivation. Zara believes in hiring young and creative people. Employees at Zara are given holistic training across all skill sets and they are also given high incentives. These practices motivates employees to market the brand Zara effectively.
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