Write a 600–800 word management report about the supply chain of an apparel retailer, based on a library article.
This assessment focuses on the supply chain management process, its importance to the success of a company, and the sequence of events and processes that bring products from manufacturers to consumers.
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
• Competency 1: Design a supply chain to support an organizational strategy.
o Explain why a company’s supply chain strategy is successful.
o Describe the importance of a company’s fast response and information infrastructure.
• Competency 3: Manage a supply chain in order to satisfy customers.
o Describe how a company’s unique replenishment strategy satisfies customers.
• Competency 4: Communicate in a professional manner that is consistent with the expectations for supply chain managers and participants.
o Exhibit proficiency in writing, critical thinking, and academic integrity by appropriately attributing sources.
A supply chain is an interrelationship through which information, physical goods, and services flow back and forth. It consists of business entities that contribute the value-creating activities of supplying necessary materials and transforming various resources into finished goods and services, and distributing the final outputs to the customer.
Questions to Consider
To deepen your understanding, you are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of the business community.
• What are the implications of a successful supply chain management strategy to a business in today’s competitive global economy?
• How can a supply chain help a company reach its strategic goals?
• Why do many companies choose to contract with third-party logistics companies?
• What are components of a successful supply chain?
Zara is the flagship brand for Europe’s fastest-growing apparel retailer and has about 1500 stores in major cities around the globe.
For this assessment, consider that you work as a manager in Zara’s corporate organization. Zara’s leadership team is considering changes in their supply chain management practices, and your manager asked you to prepare a report that analyzes their current practices as input to their decision-making process. Your report will be reviewed by the overall leadership team. After conducting some research on the topic, you identified a highly useful resource, which is a summary of Zara’s supply chain management practices provided in the Harvard Business Review article, “Rapid Fire Fulfillment,” (linked in the Resources under the Required Resources heading). Your manager agreed with you about that resource being highly useful, and the two of you further agreed that your report should address the following key questions as items Zara’s leadership team will be interested in:
• Analyze and explain why the company’s supply chain strategy is successful. As part of that, examine the effect of the selection and management of suppliers and determination of information needs and systems.
• Analyze the importance of the company’s fast response and information infrastructure as related to the company’s supply chain strategy. For example, what advantage does Zara gain against the competition by having a very responsive supply chain? What information infrastructure does Zara need in order to operate its production, distribution, and fast fashion retail network effectively?
• Analyze how the company’s unique replenishment strategy satisfies customers. For example, what advantage does the company gain from replenishing its stores multiple times a week compared to a less frequent schedule? How does the frequency of replenishment affect the improved customer satisfaction?
• What information infrastructure does Zara need in order to operate its production, distribution, and fast fashion retail network effectively?
Based on a leadership team audience, your report should be well organized and written in clear, succinct language. Target 600–800 words. Attributing sources in your professional and academic work supports your analysis and conclusions and demonstrates ethical behavior and academic honesty. Following APA rules for attributing sources provides consistency and ensures that readers can locate original sources if desired.
Academic Integrity and APA Formatting
As a reminder related to using APA rules to ensure academic honesty:
1. When using a direct quote (using exact or nearly exact wording), you must enclose the quoted wording in quotation marks, immediately followed by an in-text citation. The source must then be listed in your references page.
2. When paraphrasing (using your own words to describe a non-original idea), the paraphrased idea must be immediately followed by an in-text citation and the source must be listed in your references page.
The following reading is available full-text in the Capella University Library. Search for the article by clicking the linked title and following the instructions in the Library Guide.
• Ferdows, K., Lewis, M. A., & Machuca, J. A. D. (2004). Rapid-fire fulfillment. Harvard Business Review, 82(11), 104–110.
The following optional resources are provided to support you in completing the assessment or to provide a helpful context.
• The Supply Chain Process | Transcript.(attached/provided)
The following e-books or articles from the Capella University Library are linked directly in this course:
• Blanchard, D. (2010). Supply chain management best practices (2nd ed.). Hoboken, NJ: Wiley.
• Drake, M. (2011). Global supply chain management. New York, NY: Business Expert Press.
• Greeff, G., & Ghoshal, R. (2004). Practical e-manufacturing and supply chain management. Oxford, England: Newnes.
• Farooqui, S. U. (2010). Encyclopedia of supply chain management: Volume I. Mumbai, India: Himalaya Books Pvt.
• Farooqui, S. U. (2010). Encyclopedia of supply chain management: Volume II. Mumbai, India: Himalaya Books Pvt.
• Farooqui, S. U. (2010). Encyclopedia of supply chain management: Volume III. Mumbai, India: Himalaya Books Pvt.
Course Library Guide
You are encouraged to refer to the resources in the BUS-FP3022 – Fundamentals of Supply Chain Management library guide to help direct your research.
Access the following resources by clicking the links provided. Please note that URLs change frequently. Permissions for the following links have been either granted or deemed appropriate for educational use at the time of course publication.
• Arizona State University: W. P. Carey School of Business. (2010). Module 1: What is supply chain management? Retrieved from http://youtu.be/Mi1QBxVjZAw
• FedEx. (2011). FedEx supply chain global distribution center. Retrieved from http://www.youtube.com/watch?v=rJOWB_6IEkk
• Sustainable Supply Chain Foundation. (n.d.). Retrieved from http://www.sustainable-scf.org/
Zara-Rapid Fire Fulfillment
Over the years, Zara has retained its position as a leading brand in Europe’s fastest-growing apparel retailer industry. Zara’s success in this industry is marked by several factors, including its tremendous growth in physical stores in cities globally, skyrocketing sales relative to its competitors, and massive profits from year-to-year. Based on the analysis of information from the “Rapid Fire Fulfillment” article, it is evident that Zara’s success is based on its highly responsive supply chain strategy and control from production to consumption. Hence, the firm’s fast response and information infrastructure facilitate seamless communication across all key players in the supply chain and the replenishment strategy that fosters a constant supply of new designs that meet customers’ needs and wants.
The Success of Zara’s Supply Chain Strategy
Zara’s supply chain strategy is successful because of its responsiveness and total control of the supply chain, allowing efficiency in all critical processes. Ferdows et al. (2004) note that Zara keeps all its production in-house, unlike other industrial peers. Zara also uses a seamless communication strategy that facilitates the transfer of information from shoppers to designers. This communication strategy fosters the entity’s responsiveness to consumer demands because all stakeholders can communicate data in real-time. The firm also selects and manages suppliers from the Inditex company, enabling it to increase its overall flexibility in all supply chain processes.
Moreover, the company manages a majority of its processes, including designing, warehousing, distribution, and logistics. The total control over Zara’s supply chain enables the firm to be highly responsive because it can adjust its in-house processes to meet the customer demands. Moreover, the high integration of the company’s supply chain is successful because it helps the management keep track of all operations, including distributing products and avoiding delays that may result from outsourced services.
Importance of the Company’s Fast Response and Information Infrastructure
Besides the total control over its supply chain, Zara’s fast response and technology-based information infrastructure are vital because they facilitate seamless communication across the supply chain, prompt response to consumer needs, and attain the clients’ satisfaction relative to other competitors. As findings from previous research show, “IT infrastructure integration and flexibility indirectly and positively impact organizational performance through the mediating effect of supply chain capability, and the mediating effect is a full mediation” (Hou, 2019, p. 576). This aspect is evident in Zara, whereby the use of information infrastructure enhances the firm’s supply chain capability and overall performance. For example, Ferdows et al. (2004) note that Zara carefully deploys the latest information technology to facilitate information exchange across departments. This information exchange enables each unit to remain updated about shifts in industry practices and consumers’ needs, thus allowing immediate response and customer satisfaction.
Besides boosting customer satisfaction, faster response and information infrastructure enable Zara to stay ahead of the competition and generate more profits by beating its peers in stocking new fashion designs. Ferdows et al. (2004) note that Zara’s fast-fashion system depends on the constant information exchange throughout the year from every unit of the firm’s supply chain. Notably, store managers communicate information about consumers’ demand to market specialists who communicate to designers and other production staff. This seamless exchange of information across the units enables Zara to introduce new fashion designs faster than competitors with bureaucratic processes.
Replenishment Strategy and Customer Satisfaction
Besides its fast response and information infrastructure, Zara has a unique replenishment strategy that satisfies customers by ensuring a constant flow of new fashion that matches consumer demands and trends. Ferdows et al. (2004) note that Zara replenishes its stores with limited inventory batches, unlike other peers. This replenishment strategy enables the firm’s inventory to move fast and allows stocking of new designs based on industry trends. Moreover, Zara’s replenishment strategy promotes consumer satisfaction by ensuring that new stock is available at specific times. For example, Ferdows et al. (2004) posit that Zara has a strict rhythm for its retail stores. Managers order stock, and the warehouse fulfills the orders by sending out inventories on specific days and times. Therefore, consumers are well-oriented when to expect new inventories, which triggers them to visit the stores frequently. This precise rhythm of order placement, fulfillment, and replenishment of the retail stores enable Zara to move its products faster than competitors and satisfy consumers’ demand for new designs as they emerge.
Information Infrastructure Required by Zara
Overall, information plays a critical role in Zara’s success; thus, the firm must employ the latest information infrastructure to operate its supply chain network more effectively. Among the information infrastructures that would be suitable for Zara is enterprise resource planning (ERP), a technology that has been used in several organizations to integrate business functions. Scholars aver that ERP is suitable for integrating internal and external management information across the organization, from suppliers to consumers (Chumbalkar et al., 2018). Notably, firms can use the ERP to collect and relay information gathered from different supply chain parties. Zara requires this type of information system to enable all stakeholders to monitor production and distribution and ensure consumers receive the final product on time.
Chumbalkar, N., Chaudhari, P., & Gaikwad, V. (2018). Benefits of ERP system and its use in supply chain management. International Journal of Innovative Research in Science, Engineering and Technology, 7(3), 2898-2904. https://doi.org/10.15680/IJIRSET.2018.0703150
Hou, C. (2019). The effects of IT infrastructure integration and flexibility on supply chain capabilities and organizational performance: An empirical study of the electronics industry in Taiwan. Information Development, 36(4), 576-602. https://doi.org/10.1177%2F0266666919884352
Ferdows, K., Lewis, M.A., & Machuca, J.A.D. (2004, November). Rapid-fire fulfillment. Harvard Business Review. https://hbr.org/2004/11/rapid-fire-fulfillment