Essay about Zara Operations Strategy

4079 Words Mar 3rd, 2016 17 Pages
ZARA’S OPERATIONS STATEGY, A CRITIQUE OF A BUSINESS CASE.
1.Excecutive summary.
Operations management is in regard to all operations within the organization responsible for creating goods and services that organizations pass to their customers. This function is at the heart of all organizations, giving the means of achieving their aims and reason for their existence. These activities include: managing purchases, inventory control, quality control, storage and logistics. A great deal of focus in operations is on efficiency and effectiveness of such a process.
An example of successful operations strategy in the retail industry is the strategy employed by Zara which is discussed in this critique. Zara started as a single shop in La Coruna
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What makes Zara such successful when other competitors are falling? Which business model does Zara use? What are the challenges that Zara faces? The questions can be best answered through a SWOT analysis of the firm.
3.0 S.W.O.T Analysis.
3.1 Strengths. * Zara’s strong supply Chain Management.
An efficient supply chain is becoming more and more key success factor for companies. According to McMillan and Mullen (Operations Management Vol-2, 2002), “the purpose of SCM is to integrate all tasks associated with the bi-directional flow of materials, information and finance into organized, coherent, managed processes in order to provide end-to-end management and control.” * To analyze Zara supply chain, it is interesting to look closely at the product design, inventory management, evaluation of suppliers and vendors, logistics management, material management, time scheduling, information systems which are the main contributors in allowing Zara to offer cutting edge fashion at affordable prices.
Zara as part of the Inditex group has a very strong distribution network. Hence their superior supply chain management enables the retailer to deliver goods within 24 hours of the receipt of order at its European stores and 40 hours at its American and Asian outlets. Inditex’s logistics is carried out from distribution centers located in Spain. Currently the company’s logistic department employs more than

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