Bus Optim

Topics: Manufacturing, Italy, Lean manufacturing Pages: 9 (422 words) Published: August 30, 2014

Zara also boasts impressive financial figures. Profits at
Inditex SA, the owner of the Zara retail chain, have jumped 64% in the first quarter of 2010, while the company’s stock has risen 43% in the past 12 months. Zara, now present in 77 countries, also recently launched online operations in 85 countries encouraged by the two million people who have downloaded Zara’s

smartphone application in the first six months after its launch (Bjork 2010).

5 flexibility princeples on which zara manufacturing build on The second one is the capability to be flexible enough to
Competitive
advantage
&
Sustained
profitable
Decreased total costs growth
Decreased overall risks
Increased customer satisfaction
LIncreas.ed.ma.rke-t op-portu-nity-_>
Fig. 2. Benefits achieved from being fast
367
gybrif of agile and lean systems
Raw materials are procured through the
company’s buying offices in the UK, China and
The Netherlands, with most of the materials themselves coming in from Mauritius, New Zealand, Australia, Morocco, China, India, Turkey, Korea, Italy and Germany. Approximately 40% of garments
-
those with the
broadest and least transient appeal
-
are
imported as finished goods from low
-
cost manufacturing centres in the Far East. The rest
are produced by quick
-
response in Spain, using Zara’s own highly automated factories and a network of smaller contractors.
Material or fabric is also held in ‘greige’ i.e.undyed
and unprinted and if demand for a particular garment turns out to be higher than expected then local manufacturers can quickly manufacture additional product. Zara’s manufacturing systems are similar

in many ways to those developed and employed
so successfully by Benetton in Northern Italy, but refined using ideas developed in conjunction with Toyota. Only those operations which enhance cost -
efficiency through
economies of scale are conducted in
-
house
(such as dying, cutting, labelling and
packaging). All other manufacturing activities, including the labour -
intensive finishing
stages are completed by networks of more than 300 small subcontractors, each specialising in one particular part of the produc
tion process or garment type. These
subcontractors work exclusively for Zara’s parent, Inditex SA. In return they receive the necessary technological, financial and logistical support required to achieve stringent time and quality targets. The system is

flexible enough to cope with sudden changes in
demand, though production is always kept at a level slightly below expected sales, to keep stock moving. Zara has opted for undersupply, viewing it as a lesser evil than holding slow
-
moving or obsolete stock. (agile%supply%)
strategic management paper xara talks abouy ecological problems analysis of successful
Sourcing strategu 813
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