Fashion "Chasing Wind" Zara Supply Chain

The powerful collaborative supply chain operation system and the “mass centralized” system behind it are the key to the rapid success of Zara, a clothing retailer from Spain.

Who is Zara? It is both a clothing brand and a retail chain that specializes in Zara brand clothing. Ranked No. 1 in Spain and No. 3 in global apparel retailers, Inditex owns eight apparel brands, and Zara, founded in 1975, contributes 70% of the stores in only one-third of the group's stores. Sales.

Therefore, when Zara enters the Chinese market on January 1 this year, it immediately aroused people's curiosity about the reasons for their success. “Zara is like a 'foster chaser' in the fashion field. Its strong supply chain management and supporting information systems are the most powerful guarantees for ensuring its return in the “Wind Wind.” Tsinghua Science Park Modern Enterprise Innovation Liu Haifeng, director of the Research Center of Management Research, said.

"Fast" supply chain

“For each industry benchmarking company, its supply chain management level generally exceeds other competitors in the industry by a wide margin. Supply chain management level is exactly the core competitiveness of these companies.” A consulting company Accenture in it The report concludes. Zara, whose business philosophy is "affordable fashion" and "fast, small, and varied," confirms Accenture's conclusions in everything from product design to marketing.

Zara's supply chain highlights a "fast" word. First of all, in product design, Zara rarely completely rely on their own design and research and development, more to find inspiration from the conference of other fashion brands. According to the tradition of the clothing industry, high-end brand fashion will release fashion information about six months ahead of schedule in the sales season. Generally, it will release autumn and winter fashion in March and spring/summer fashion in September. These fashion companies will release their new clothes in fashion centers in Paris, Milan, Florence, New York, etc., while Zara's designers are the most active "spectators."

Immediately after this information is quickly returned to the headquarters, a team of professional fashion designers will be redesigned in categories, styles and styles, and re-assembled into Zara's own new product theme series. Zara headquarters has a 260-person professional team composed of design experts, market experts and procurement experts (responsible for purchasing samples, fabrics and production plans, etc.) to discuss possible future fashion styles, designs, fabrics, etc., and discuss the general Problems such as costs and retail prices form initial consensus.

After the designer has painted and perfected the costumes, the team will further discuss the issues of batch size, price, etc., and decide whether or not to put into production. The open team, frequent communication, and assurance are immediately implemented, which makes Zara's design, in addition to having low-cost and popular elements, has six months of fashion information "in advance."

Zara's procurement process is also very distinctive. In fabric purchasing, Zara mainly purchases the original grey cloth (an undyed woven fabric) and dyes it as needed. This not only can quickly respond to the trend of market changes, but also can effectively reduce the cost of raw material inventory and prevent the risk of out of stock. In order to prevent reliance on a supplier and encourage faster response from suppliers, Zara's remaining supply of raw materials comes from 260 suppliers near its company, each with a share of no more than 4%.

When clothing enters the production stage, Zara's approach is quite different from the popular outsourcing model in the world today. It not only owns its own textile mills and garment processing plants, but also establishes independent logistics transportation companies in some major regions of Europe. Zara Investment Holdings' 14 plants are linked together into one large-scale automatic distribution warehouse, which is completely self-manufactured. Although the production cost is increased by 15% to 20% compared to outsourced production, high-efficiency operation management has improved the production speed. It also reduces the cost of hysteresis brought about by inventory, so in addition to effectively eliminating this part of the visible costs, the production companies can basically maintain a stable profit of 10%.

Next, the distribution process is crucial. To speed up the logistics, Zara headquarters has a two-lane expressway that goes directly to the distribution centers. Usually the goods can be carried away within eight hours after the order is received, and the stores are allocated twice a week. Garments are transported directly from the logistics center to various stores in Europe, and are transported to the United States and Asia using two nearby air transport bases, and then transported by third-party logistics trucks to special stores.

The last is marketing management. Zara requires each store to send sales back to headquarters on a daily basis, and to send replenishment requests to headquarters twice a week based on current inventory and sales expectations in the last two weeks. The accuracy of these information is the key content of store management personnel assessment. In addition, in order to ensure that orders can be mass-produced in batches, reducing production conversion time and reducing costs, each store must deliver orders before the specified time, and if it is missed, it will only wait until the next application.

After the headquarters received the sales, inventory, and order information from each store, it comprehensively analyzed whether the various products were sold or unsalable. If the slow-moving products were sold, the original production plan was cancelled. Since Zara only produces about 15% of the shipments in the next quarter before the quarter, Zara's clothing is limited to no more than 18% at the end of a sales season, and the industry average is about 35. %. It can be said that the most fundamental reason for Zara's success is its efficient collaborative supply chain operation system.