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As a Supply Chain professional, Amancio Ortega is one of my biggest role models. Their returns rate is almost zero, their discounting is nonexistent, their conc
by saosebastiao 14y ago
As a Supply Chain professional, Amancio Ortega is one of my biggest role models. Their returns rate is almost zero, their discounting is nonexistent, their conception-to-floor time is two weeks, and they manage to do all that with the labor costs found in a developed economy.
It surprises me that the fashion industry has largely overlooked Zara as a technical leader, referring to them as nothing more well-practiced copycats. It is just a pathetic excuse. Zara can create a similar design (they never blatantly copy, they always have their own spin), mass produce a garment and sell 50k units in less time than it takes the original creator of the "copied" garment to solidify a production plan with a Honduran Maquila with a 6 month lead time.
New fashion companies should be aware that if they can't compete logistically, they have no chance at survival. Old fashion companies with bad logistics practices are only squeaking by due to brand cachet.
- joonix 14y agoI don't think Zara's supply chain innovation has gone unnoticed. I think many if not most in the fashion industry understand that it's the reason they excel. I'm wondering what other industries are ripe for disruption-by-supply-chain. Dell did it to PC, Zara did it to fashion, FedEx did it to post...
- kmfrk 14y ago... Steve Jobs did it, when he ordered all remaining air transportation way back when and blocked everyone else from using it. It may have been before the iPod. Tim Cook is a bit of a logistics genius as well.
- medell 14y agoThere are several reasons they excel, but when I did a Harvard Business Case about them the main factors were the supply chain innovation due the ability to move quickly and keep less inventories + not having to hire expensive designers by copying = fast copying. http://hbswk.hbs.edu/archive/4652.html http://hbswk.hbs.edu/archive/4652.html
- waterlesscloud 14y agoConception-to-floor is 2 weeks? I'd love to read about that if anyone has any relevant links.
- goatforce5 14y agoThe NYT article: http://www.nytimes.com/2012/11/11/magazine/how-zara-grew-into-the-worlds-largest-fashion-retailer.html?pagewanted=all http://www.nytimes.com/2012/11/11/magazine/how-zara-grew-int... As I understand it, H&M has a similar supply chain/business model, but Zara came along and turned it up a notch. From my not-really-interested totally non-scientific observations, Zara does seem to be expanding faster than H&M at the moment.
- waterlesscloud 14y agoThank you! "They also monitor customers’ reactions, on the basis of what they buy and don’t buy, and what they say to a sales clerk: “I like this scooped collar” or “I hate zippers at the ankles.” Inditex says its sales staff is trained to draw out these sorts of comments from their customers. Every day, store managers report this information to headquarters, where it is then transmitted to a vast team of in-house designers, who quickly develop new designs and send them to factories to be turned into clothes."
- swah 14y agoI have the impression that Zara is much better (and sells much more) in portugal than here in brazil. No idea why though - we're a big market.
- smackfu 14y agoSeems like just the time in the container being shipped would eat up a lot of that.
- saosebastiao 14y agoAir Freight is used extensively by Zara.