It allows zara to match demand for fickle trends more accurately. This in turn means that they can sell products at full price and thus secure their margins and make a profit.
It also increases customer loyalty to the brand as zara builds a reputation for being up to date on trends which increases demand products.
It also allows zara to reduce inventories and forecast error.
Why has Inditex chosen to have both in-house and outsourced manufacturing?
In-house manufacturing is used as part of a responsive pull supply chain strategy and also as the final leg of its manufacturing process. After the sales season has started Inditex begins to use …show more content…
How does the frequency of replenishment affect the design of Zaras distribution system?
The frequency of replenishment has made zara increase the size and also centralise its distribution design by handling its global operations through 8 Distribution canters based in Spain. This centralised structure means that products can be distributed rapidly from in house manufacturing in order to meet worldwide demands in as little time as possible.
Do you think Zara’s responsive replenishment infrastructure is better suited for online sales or retail sales?
Whilst its quick distribution system allows zara to respond to trends very quickly its lack of decentralised distribution means that it is better suited to retail as online sales tend to have more a diverse product demand and customers expect quicker delivery times. Companies such as amaazon are able to respond quicker to online sales due to the fact that they have distribution centres all around the world and can offer same