GRIFFITH UNIVERSITY
Global Business Logistics 7103IB ssign!ent "#$ %eeting t&e '&allenges o( Global Logistics
Major Retailer: Zara
)*a+ing on t&e in(o*!ation ,*o-i.e. in ssign!ent 1 an. using t&e sa!e !e.iu! ti!e (*a!e/ analse an. .esc*ibe &o+ ou belie-e t&at t&e logistics c&anges +ill i!,act on an ente*,*ise suc& as a !a2o* *etaile* o( ou* c&oice4 T&e c&osen c&osen ente*,*ise can be one o( +&ic& ou ou a*e ,e*sonall ,e*sonall (a!ilia*/ (a!ilia*/ o* one (*o! an a,,*o,*iate te5tboo6 suc& as IE/ !a8on/ 'oles/ 9ool+o*t&s/ ust*alia :ost/ etc4 s be(o*e/ in t&e conte5t o( t&is assign!ent/ ;Logistics< s&oul. be ta6en as *e=ecting t&e sub>set o( su,,l c&ain !anage!ent t&at *elates to t&e t*ans,o*t an. +a*e&ousing (unction an. associate. in(o*!ation !anage!ent4 6e (acto* is assessing t&e stu.ents +o*6 +ill be t&e use o( a,,*o,*iate aca.e!ic (*a!e+o*6s to i.enti( an. analse t&e i!,act logistic c&anges an. .e-elo,!ents4
Introduction It is o(ten ta6en (o* g*ante. t&at a,,*o,*iate ,*o.ucts +ill be a-ailable to bu in t&e s&o,s4 9e e5,ect ou* lettuces to be (*es&/ t&e ne+ i:a. to be a-ailable on launc& .a an. ou* clot&es to be in goo. con.ition an. *ea. to +ea*4 9it& t&e a.-ent o( e> an. !>co!!e*ce +e &a-e co!e to .e!an. co!,lete a-ailabilit an. .eli-e* at ti!es/ an. to ,laces/ o( ou* c&oosing4 It is beco!ing clea* t&at t&e c&ange. con.itions in t&e global !a*6et,lace .e!an. a !uc& !o*e agile *es,onse (*o! o*ganisations an. t&ei* ,a*tne*s in t&e su,,l c&ange4 :*o.uct an. tec&nolog li(e ccles a*e li6el to continue to s&o*ten/ +&ile .e!an. +ill be inc*easingl .i?cult to (o*ecast @&ela86o-/ n4.4/ ,a*a4 14 T&e a,,a*el in.ust* is one o( t&e !ost globalise. in.ust*ies/ +it& #34A !illion +o*6e*s in o-e* #0 count*ies4 T&e !a*6et c&a*acte*istics in t&is in.ust* a*e s&o*t ,*o.uct li(eccles/ &ig& -olatilit/ lo+ ,*e.ictabilit/ an. a &ig& le-el o( i!,ulse ,u*c&ase/ !a6ing suc& issues as uic6 *es,onse o( ,a*a!ount i!,o*tance 'a*ugati/ C Liao/ R C S!it&/ : #00D/ ,4 14 Su,,l c&ain !anage!ent S'% is t&e success (acto* in (ast (as&ion business4 It .eals +it& su,,lie*s/ +it& su,,lie*s su,,lie*s/ an. +it& custo!e*s4 T&e out,ut o( su,,l c&ain is not 2ust a ,&sical ,*o.uct/ but a co!bination o( ti!e/ ,lace/ (o*! an. (unction o( a ,*o.uctse*-ice ,*o,osition @&ela86o-/ n4.4/ ,a*a4 #4 In t&e (as&ion +o*l./ +&e*e co!,anies a*e co!,eting on ti!e ti!e to !a*6et t&e nee. o( ne+ abilities a*e *ising4 gilit is suc& an abilit t&at *es,on.s to un,*e.ictable c&anges in .e!an.4 gile Su,,l '&ain S' is .*i-en b in(o*!ation suc& as !a*6et .ata an. in(o*!ation>s&a*ing bet+een business in t&e su,,l c&ain to !a6e uic6e* *es,onse/ .esc*ibe s&o*te*/ !o*e =e5ible/ .e!an. .*i-en su,,l c&ains @&ela86o-/ n4.4/ ,a*a4 34 T&is assign!ent +ill loo6 at @a*a one o( t&e !ost success(ul agile *etail su,,l c&ains in t&e +o*l.4 '*eate. in 17 in S,ain b !ancio J*tega/ @a*a is a clot&ing an. accesso*ies *etaile* +it& !o*e t&an #/000 sto*es o,e*ating in DD count*ies4 )u*ing t&e last t+o .eca.es @a*a &as t*i,le. its ,*oKts an. no+a.as is *an6e. 3*. biggest *etaile* +o*l.+i.e Lu #01/ ,a*a4 34 t @a*a/ s,ee. an. *es,onsi-eness a*e !o*e i!,o*tant t&an cost4
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T&e b*an. is *eno+ne. (o* its abilit to .eli-e* ne+ clot&es to sto*es uic6l an. in s!all batc&es4 T+ice a +ee6/ at ,*ecise ti!es/ sto*e !anage*s o*.e* clot&es/ an. t+ice a +ee6/ on sc&e.ule/ ne+ ga*!ents a**i-e4 T&e co!,an ,*o.uces about 0 !illion ite!s a ea* Lu #01/ ,a*a4 4
Hig&lig&ts o( t&is *e!a*6able co!,an inclu.e$ • • • • • • •
1 +ee6 to .e-elo, a ne+ ,*o.uct co!,a*e. to A !ont& in.ust* a-e*age Launc&es o-e* 1#/000 ne+ .esigns eac& ea* Ga*!ent &it sto*es +it&in 3 +ee6s Ne+ stoc6 a**i-es t+ice ,e* +ee6 in eac& sto*e Not&ing *e!ains in +a*e&ouses a(te* 7# &ou*s Lac6 o( a.-e*tising 'ont*ols !ost ste,s on t&e su,,l>c&ain .esigning/ !anu(actu*ing an. .ist*ibuting ,*o.ucts
Fo* @a*a/ its su,,l c&ain is its co!,etiti-e a.-antage4
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Global logistic changes impact on Zara Jne o( t&e ,*i!a* (acto*s in S'% in .ete*!ining t&e co!,etiti-eness o( o*ganisations (alls a*oun. logistics/ getting$ t&e *ig&t ,*o.uct/ in t&e *ig&t +a/ in t&e *ig&t uantit an. *ig&t ualit< in t&e *ig&t ,lace at t&e *ig&t ti!e< an. (o* t&e *ig&t custo!e* at t&e *ig&t cost %angan #01#/ ,4 4 In (ast (as&ion/ ,u*c&asing acti-ities ,la a c*itical *ole t&*oug& su,,lie* selection an. ,*o.uct .ecision>!a6ing/ an. in.ee./ buing is a*guabl c&anging (*o! ,u*el o,e*ational to !o*e st*ategic +&ic& is &o+ @a*as ,*ocu*e!ent o,e*ates @&ela86o-/ n4.4/ ,a*a4 174 Strategic Procurement (Zara) Goals$ 14 Rig&t :lace #4 Rig&t Muantit 34 Rig&t Mualit 4 Rig&t Ti!e 4 Rig&t :*ice A4 Rig&t Su,,l
Operational Procurement Goals$ 14 %anage uninte**u,te. =o+ o( !ate*ials an. se*-ices #4 %anage cost o( o,e*ational acti-ities 34 %ini!i8e in-ento* in-est!ent an. loss
%eln6 C )a-is C S,e6!an C San.o* #010/ ,4 33 su!s u, t&e su,,l c&ain o( to!o**o+ !ust .eli-e* -a*ing .eg*ees o( si5 outco!es .e,en.ing on 6e custo!e*s nee.s4 T&ese si5 outco!es a*e$ 14 #4 34 4 4 A4
'ost Res,onsi-eness Secu*it Sustainabilit Resilience Inno-ation
F*o! t&is analsis o( &o+ logistics an. su,,l c&ains inte*act/ (ou* 6e i!,acts &a-e e!e*ge. c&allenging su,,l c&ain !anage*s cu**entl an. +ill continue to .o so in t&e (utu*e4 T&ese (ou* i!,acts a*e a*oun.$ Tec&nolog/ 'usto!e* E5,ectations/ Globalisation an. En-i*on!ental conce*ns an. its t&ese (ou* i!,acts t&at t&is assign!ent +ill loo6 close* at +it& @a*a4
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Logistics hange Impact !" #echnolog$ T&e use o( tec&nolog is ,*e-alent an. !a5i!ise. t&*oug&out all ,a*ts o( t&e su,,l c&ain C business at @a*a4 @a*a ta6es on t&e !an.ate in-ento* O .eat&P an. a-oi.s ,iling u, in-ento* in an ,a*t o( its su,,l c&ain (*o! *a+ !ate*ials to Knis&e. ,*o.ucts4 T&e .o t&is b i!,le!enting tec&nolog a*oun. in-ento* o,ti!i8ation !o.els to assist t&e co!,an to .ete*!ine t&e uantit t&at s&oul. be .eli-e*e. to e-e* single one o( its *etail sto*es -ia s&i,!ents t&at go out t+ice e-e* +ee64 T&e stoc6 .eli-e*e. is st*ictl li!ite./ ensu*ing t&at eac& sto*e onl *ecei-es 2ust +ant t&e nee.4 T&is also assists t&e b*an. i!age o( being e5clusi-e +&ile a-oi.ing t&e buil.>u, o( un,o,ula* stoc64 T&an6s to tec&nolog t&is uic6 in>season tu*na*oun./ (*o! ,*o.uction (acilities locate. close to @a*as .ist*ibution &ea.ua*te*s in S,ain/ allo+s @a*a to s&i, !o*e o(ten an. in s!alle* batc&es4 I( t&e .esign @a*a &astil c*eates in an atte!,t to c&ase t&e latest t*en. .oes not in (act sell +ell/ little &a*! is .one .ue to t&e batc& being so s!all/ so t&e*es not a ton o( unsol. in-ento* to get *i. o(4 n. because t&e (aile. e5,e*i!ent is o-e* in a 2iQ/ t&e*es still ti!e to t* a .iQe*ent stle/ an. t&en a .iQe*ent one a(te* t&at Lu #01/ ,a*a4 104 @a*as sec*et to t&ei* success &as been a*oun. ;cent*ali8ation4 @a*as net+o*6e. business .esigns enable t&e (*euent .igital co!!unication (*o! sto*es to .esigne*s/ an. cent*alise. .ist*ibution allo+ t&e +it&in>1>.a .eli-e*ies to ensu*e t&e satis(action o( consu!e*s4 Zara’s Supply Chain Advantages and Disadvantages/ n4.4/ ,a*a4 A4 T&is (ast (as&ion sste! .e,en.s on a constant e5c&ange o( in(o*!ation t&*oug&out e-e* ,a*t o( @a*as su,,l c&ain > (*o! custo!e*s to sto*e !anage*s/ (*o! sto*e !anage*s to !a*6et s,ecialists an. .esigne*s/ (*o! .esigne*s to ,*o.uction staQ/ (*o! bue*s to subcont*acto*s/ (*o! +a*e&ouse !anage*s to .ist*ibuto*s4 9e can see t&at @a*as o*ganisation/ ,e*(o*!ance !easu*es/ o,e*ational ,*oce.u*es a*e .esigne. to !a6e in(o*!ation t*ans(e* eas4 Zara’s Supply Chain Advantages and Disadvantages/ n4.4/ ,a*a4 134 @a*as .esigne*s gat&e* .ata on sales an. in-ento* (*o! eac& o( its sto*es on a .ail basis an. use t&is to in(o*! t&ei* -ie+ o( t&e situation4 T&e *a+ .ata co!es (*o! uantitati-e an. ualitati-e a,,*oac&es4 Sales an. *e,lenis&!ent *e,o*ts a*e e5a!ine. &ou*l b t&e @a*as sto*e !anage*s4 Jn t&e ot&e* &an. sto*e !anage*s o*.e* ite!s t&e!sel-es instea. o( *eling on +&at &as being sent (*o! t&e &ea.ua*te*s4 T&e accu*ac o( t&ei* (o*ecasting aQects t&ei* co!,ensation/ +&ic& !a6es t&e! !o*e *es,onsible4 :a*t o( t&e ualitati-e .ata gat&e*ing is .i*ect custo!e* (ee.bac6 gi-en to s&o, assistants .ail4 not&e* one is a(te* t&e s&o, closes/ t&e sto*e !anage* an. assistants tu*n to a *eco-e* tea! an. t* to *ecall +&at &a,,e. .u*ing t&is .a/ as +ell as so*t out t*ie./ but unsol. ite!s in Ktting *oo!s an. t* to Kn. a ,atte*n/ +&ic& can be (e. to t&e .esign tea!4
T&e gat&e*e. *a+ .ata is analse. in @a*as &ea.ua*te*/ +&e*e .esign tea!/ (ast ,*otot,ing tea!/ !a*6et s,ecialists an. bue*s set toget&e* in a tig&tl cou,le. tea!s4 @&ela86o-/ n4.4/ ,a*a4 #>#4 Tec&nolog is also use. to ensu*e t&at eac& @a*a o*.e* a**i-es at .estination ,unctuall/ lase* ba*co.e scanne*s/ +&ic& a*e able to ,ic6 an. so*t o-e* D0/000 ,ieces o( clot&es +it& an e**o* *ate o( less t&an 04/ +as a.o,te. in so*ting t&e Knis&e. ,*o.ucts at @a*a @&ela86o-/ n4.4/ ,a*a4 114 @a*a also &as i!,le!ente. ne+ tec&nologies allo+ing a ,*o.uct ,*ice to c&ange cou,le o( ti!es a .a/ .e,en.ing on su,,l an. .e!an.4 T&e sa!e tec&nologies allo+ !onito*ing t&at ,*ocess @&ela86o-/ n4.4/ ,a*a4 134 n ne+ tec&nolog a.-ances in t&e (utu*e (o* @a*as su,,l c&ain +ill onl ,*o,el @a*a to i!,*o-e e?ciencies an. custo!e* satis(action4
Logistics hange Impact !% ustomer &'pectations 'usto!e* e5,ectations continuall c&allenge su,,l c&ain4 'onsu!e* belie(s an. nee.s &a-e alte*e.4 Ho+ consu!e*s be&a-e an. +&at +e .e!an. &as c&ange.4 Ju* +illingness to +ait to be satisKe. o* se*-e. &as *e.uce. an. +e e5,ect instant ,*o.uct a-ailabilit an. g*atiKcation4 It s&oul. be ob-ious (*o! t&is t&at a su,,l o* logistics sste! t&at gets ,*o.ucts (*o! ,*o.uction t&*oug& *etailing to consu!,tion &as also &a. to be t*ans(o*!e.4 :&sical .ist*ibution an. !ate*ials !anage!ent &a-e been *e,lace. b logistics !anage!ent an. a subseuent conce*n (o* t&e +&ole su,,l c&ain4 T&is consi.e*ation (o* t&e su,,l c&ain as a +&ole &as in-ol-e. t&e .e-elo,!ent o( integ*ate. su,,l c&ain !anage!ent S,a*6s et al4 #01/ ,4 14 Base. on t&e -alue net/ custo!e* -alue !anage!ent is a 6e issue to obtain a *egula* g*ou, o( bue*s4 J,,o*tunities (*o! cu**ent an. ,otential custo!e*s can be c*eate. b un.e*stan.ing t&e custo!e*s &obbies/ ,u*c&ase (*euenc/ be&a-iou*s an. nee.s4 Fu*t&e* actions &ence can be ta6en inclu.ing contacts o( !ulti>c&annel custo!e*s an. ca!,aigns ,*o!otional ta*geting/ oQe*s .esigne. to att*act an. se*-e .iQe*ent custo!e*s acco*.ing on t&ei* ,otential an. e5isting -alues4 T&e cu**ent s&o,,e*s a*e (*euent an. loal custo!e*s +&o -isit 17 ti!es on a-e*age to a @a*a sto*e ,e* ea*4 T&ei* inte*est is *etaine. b *egula*l u,.ating an. -a*ing o( stoc6s on s&el-es Zara’s Supply Chain Advantages and Disadvantages/ n4.4/ ,a*a4 1#4 @a*a &as a success(ul su,,l c&ain !anage!ent +&ic& (ocuses on custo!e*s ,*e(e*ences an. t&e custo!e* satis(action an. it is base. on t&e ,e*(o*!ance o( su,,l c&ain4 E?cient collabo*ation +it& su,,lie*s an. custo!e*s &as st*engt&ene. t&e long>te*! *elations&i, an. &as &el,e. to ac&ie-e tangible an. intangible beneKts a!ong t&e! .ue to t&e t*ans,a*enc o( .ata o( in.i-i.uals/ +&ic& allo+s @a*as !anu(actu*ing ca,acit to be !o*e a.a,ti-e to t&e custo!e*s *euests an. on t&e ot&e* &an./ bue*s a*e !o*e a+a*.e. o( t&e !anu(actu*ing ,*oce.u*es Zara’s Supply Chain Advantages and Disadvantages/ n4.4/ ,a*a4 #44 'usto!e* *elations&i, bet+een @a*a an. s&o,,e*s is st*engt&ene. b s&o+ing a sense o( sca*cit b .is,laing unKlle. s&el-es/ li!ite. oQe* notes on ce*tain ite!s an. .elibe*atel un.e*su,,l i!,*ession to encou*age custo!e*s to *un to t&e counte* Zara’s Supply Chain Advantages and Disadvantages/ n4.4/ ,a*a4 44 Jne o( t&e biggest a.-antages o( @a*as su,,l c&ain st*ateg is being able to *eact uic6l to all (as&ion t*en.s an. su,,l custo!e*s latest (as&ion outKts as soon as in (e+ +ee6s ti!e +&ic& .eli-e*s on custo!e* e5,ectations on !an le-els Zara’s Supply Chain Advantages and Disadvantages/ n4.4/ ,a*a4 1A4 Inc*easing ,*o.uct -a*iet in stle/ si8e/ ,ac6age/ (unction etc4/ can *esult in i!,*o-e. custo!e* satis(action/ &ig&e* !a*6et s&a*e an. en&ance. co!,etiti-eness4 :*o.uct -a*iet also aQects consu!e* ,u*c&ase be&a-iou* an. +el(a*e4 T&e nee.s an. .esi*es o( &ete*ogeneousl .ist*ibute. consu!e*s a*e A
bette* satisKe. b &ig&e* ,*o.uct -a*iet4 Ra+ !ate*ials costs/ +o*6>in>,*ocess/ Knis&e. goo.s an. ,ost>sales se*-ice in-ento*ies an. logistics costs a*e so!e e5a!,les o( costs a*ising (*o! inc*ease. -a*iet %e&*2oo C :ase6/ #01/ ,4 #74 @a*a is an e5,e*t in (ast (as&ion c&ain su,,l +&ic& is uic6 *eaction to consu!e*s nee.s an. uic6 *es,onse to c&anges in su,,l4 9&en ,*o.uct !eets t&e cu**ent nee.s o( t&e consu!e*/ consu!e* bus t&e ,*o.uct/ an. t&is is &o+ @a*a !aintains e5isting custo!e*s an. att*acts ne+ ones Zara’s Supply Chain Advantages and Disadvantages/ n4.4/ ,a*a4 #04 )eli-e* ti!es also in=uences t&e co!,an i!age4 Lac6 o( co!,ans ,*o.uct on t&e s&el(/ tu*ns t&e custo!e* to co!,etito*s ,*o.ucts an. a*oun. #0 ne-e* co!e bac64 In ot&e* +o*.s/ s&o*t .eli-e* ti!es can inc*ease !a*6et s&a*e @&ela86o-/ n4.4/ ,a*a4 1D4 T&is is one ,a*t o( t&e su,,l c&ain @a*a &as ,e*(ecte.4 Enoug& stoc6 to satis( .e!an.s/ but not too !uc& t&at a s&o,,e* (eels t&e can co!e bac6 an. ,u*c&ase ne5t +ee6 an. uic6 *e,lenis&!ent4 T&e nee. o( .ec*easing lea. ti!es an. being =e5ible in (ast (as&ion int*o.uce. in-ol-e!ent o( su,,lie*s in t&e ,*ocess as b*ing c*ucial to t&ei* abilit to attain &ig& le-els o( custo!e* satis(action4 Ho+e-e*/ in o*.e* to *eact on t&e *a,i. c&ange in consu!e* .e!an./ @a*a &as .e-elo,e. an e?cient agile su,,l c&ain/ +it& all .esigne*s/ bue* e5,e*ts an. !anage!ent in one ,lace an. ,*o.uct (acilities close to t&e!/ assu*ing (ull =e5ibilit an. agilit @&ela86o-/ n4.4/ ,a*a4 30/3#4
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Logistics hange Impact ! Globalisation T&e global econo! a,,ea*s to be .ecele*ating as se-e*al la*ge econo!ies (ace inc*easing t*ouble4 T&e !ain ones o( conce*n a*e '&ina an. t&e Eu*o8one as +ell as a (e+ e!e*ging !a*6ets suc& as B*a8il an. Russia )eloitte #01/ ,4 14 S,ain is t&e onl econo! in t&e Eu*o8one e5,e*iencing a signiKcant *eboun. in g*o+t& (ollo+ing ,*o.ucti-it gains an. +age *est*aints/ bot& o( +&ic& &a-e butt*esse. e5,o*t co!,etiti-eness4 lt&oug& une!,lo!ent *e!ains *uinousl &ig& )eloitte #01/ ,4 14 @a*as &ea.ua*te*s is in S,ain an. is t&*i-ing in its econo!4 s !entione. abo-e '&inas econo! &as slo+e. .o+n +&ic& &as le. to s&a*, .*o, in global co!!o.it ,*ices an. &as &u*t counties suc& as ust*alia/ B*a8il an. In.onesia4 @a*a &as a-oi.e. outsou*cing to '&ina/ an. t&ats a &uge *eason its been so success(ul4 9&ile t&e*e a*e so!e t&at +oul. a*gue t&at t&e*e is not !uc& .iQe*ence bet+een .o!estic an. inte*national logistics/ t&e*e a*e so!e substantial .iQe*ences +&ic& a*e o(ten c&a*acte*i8e. as t&e (ou* )sP .e!an./ .istance/ .ocu!entation/ an. .i-e*sit4 T&e .e!an. is g*eate*/ t&e .istances a*e longe*/ t&e .ocu!entation is !o*e e5tensi-e/ an. t&e*e is substantial .i-e*sit in *eui*e!ents an. cultu*es 'loss n4.4/ ,a*a4 #4 Jt&e* (as&ion K*!s &a-e t&ei* clot&es !a.e in '&ina4 T&is is c&ea,/ but !anaging a long su,,l c&ain is &a*.4 B t&e ti!e a boat &as saile. &al(+a *oun. t&e +o*l./ &e!lines !a &a-e *isen an inc& an. its ca*go +ill be as ,o,ula* as ge*iat*ic &a..oc64 @a*a/ b cont*ast/ sou*ces 2ust o-e* &al( o( its ,*o.ucts (*o! S,ain/ :o*tugal an. %o*occo4 T&is costs !o*e4 But because its su,,l c&ain is s&o*t/ @a*a can *eact uic6l to ne+ t*en.s4 Instea. o( betting on to!o**o+s &ot loo6/ @a*a can +ait to see +&at custo!e*s a*e actuall buingan. !a6e t&at4 9&ile ot&e*s co!,anies a*e stuc6 +it& un+ante. stoc6/ @a*a sells at (ull ,*ices G*ot& #01#/ ,a*a4 #>34 @a*a &as *esiste. t&e t*en. o( outsou*cing to *e.uce cost to cont*ol !o*e o( t&e su,,l c&ain an. 6ee,ing a s&o*t su,,l c&ain to o-e* .eli-e* on custo!e* e5,ectations +&ic& &as *esulte. in st*ong g*o+t& an. *e-enue4 9it& !a2o* global ,lae*s continuing to ente* t&e !a*6et in ust*alia an. a +ea6ening o( t&e ust*alian .olla*/ *etaile*s ac*oss all seg!ents +ill nee. t&e abilit to inno-ate/ .*i-e i!,*o-e. ,*ocesses an. to contact +it& t&e consu!e* +ill be c*ucial in o*.e* to *e!ain co!,etiti-e in bot& t&e e5isting an. (utu*e ust*alian *etail !a*6et )eloitte #01/ ,4 4 @a*a on ent* into t&e ust*alian !a*6et sol. D0 o( its ite!s in t&e K*st 3 !inutes o( o,ening4 Globalisation &as also gi-en ust*alian consu!e*s access to a (a* +i.e* *ange o( goo.s an. se*-ices/ o(ten at lo+e* ,*ices/ t&an +oul. be a-ailable (*o! .o!estic ,*o.uce*s alone4 global *etail t*en. (o* #01 in ust*alia is Faste* Retailing4 S,ee. &as been an i!,o*tant t*en. in *etail (o* o-e* a .eca.e4 In #01/ e5,ect *etailing to get e-en (aste* to !eet consu!e*s .esi*es4 %illennials +ill be .*i-ing D
!uc& o( t&is as t&e a*e t&e la*gest gene*ation +it& a lot o( s,en.ing ,o+e* an. ca** a lot o( in=uence4 T&e ,*e(e* (ast *es,onse an. i!!e.iate g*atiKcation an. *etaile*s li6e @a*a nee. to cate* to t&at )eloitte #01/ ,4 104 @a*a stic6s to a .ee,/ ,*e.ictable an. (ast *&t&!/ base. a*oun. o*.e* (ulKl!ent to sto*es4 Eac& @a*a outlet sen.s in t+o o*.e*s ,e* +ee6 on s,eciKc .as an. ti!ing4 T*uc6s lea-e at s,eciKc ti!es an. s&i,!ents a**i-e in sto*es at s,eciKc ti!es4 Ga*!ents a*e al*ea. labelle. an. ,*ice. u,on .estination4 s a *esult o( t&is clea*l .eKne. *&t&!/ e-e* staQ in-ol-e. (*o! .esign to ,*ocu*e!ent/ ,*o.uction/ .ist*ibution/ an. *etail 6no+s t&e ti!eline an. &o+ t&ei* acti-ities ,an out +it& *es,ect to ot&e* (unctions4 T&at ce*tainl also e5ten.s to @a*a custo!e*s/ +&o 6no+ +&en to -isit sto*es (o* (*es& ne+ ga*!ents Lu #01/ ,a*a4 #A>#D T&e s,ee. o( inno-ation an. t&e .is*u,tion globalisation cause. +ont cease/ an. t&e .e!an.s o( custo!e*s +ill continue to escalate4 To t&*i-e in t&is en-i*on!ent *etaile*s +ill *es,on. uic6l to t&*eats an. o,,o*tunities +it& inno-ations o( t&ei* o+n4 @a*as st*ong .ist*ibution net+o*6 enables t&e co!,an to .eli-e* goo.s to its Eu*o,ean sto*es +it&in # &ou*s an. to its !e*ican an. sian outlets in less t&an 0 &ou*s Lu/ #014 :a*a4 304 Jne (utu*e i!,act @a*a +ill nee. to sol-e +it& t&ei* cu**ent su,,l c&ain is as t&e continue to e5,an. to (a* locations/ as t&e o+n all t&e c&annels o( su,,l c&ain/ is to *e.uce t&e e5,ense to .ist*ibute suc& ,*o.ucts o* be +illing to abso*b t&is &ig& e5,ense4 T&e alte*nati-e !a be a secon. +a*e&ouse &o+e-e* t&*oug& *ecent *esea*c& t&is +oul. not +o*6 in t&ei* tig&t/ s&o*t/ agile su,,l c&ain !o.el4
Logistics hange Impact ! &n*ironmental oncerns+Sustainabilit$ @a*as -e* e?cient agile su,,l c&ain &as uite an i!,act on t&e en-i*on!ent inclu.ing t&e belo+ 3 6e a*eas$ 14 T&e (ast (as&ion in.ust* *esults in #4 !illion tons o( +aste ,e* ea* 'J# accounts (o* #41 !illion an. H#J accounts (o* 70 !illion Business of Fast Fashion/#0134 #4 Fast Fas&ion ,u*c&ases en. u, in t&e t*as& +it&in 1 to 14 ea*s .ue to lo+ ualit ,utting a st*ain on lan.Kll Business of Fast Fashion /#0134 34 T*ans,o*tation B 2ust (ocusing on .eli-e*ies # ti!es ,e* +ee6 ,e* sto*e using a -a*iet o( t*ans,o*t !et&o.s &as a &uge i!,act on natu*al *esou*ces an. t&e en-i*on!ent4 S&oul. t&e en-i*on!ent beco!e a &uge e!,&asis +it&in @a*as ta*get au.ience ;%illennials/ t&is +oul. i!,act &ea-il on @a*as su,,l c&ain4
Sustainabilit$ @a*a is all about .eli-e*ing (as&ionable an. t*en. nu!be*s cate*ing (o* .iQe*ent tastes t&*oug& a cont*olle. an. integ*ate. ,*ocess also 6no+n as 2ust in ti!e ,*o.uction4 To sa(egua*. t&ei* business/ @a*a 6ee,s a signiKcant a!ount o( its ,*o.uction in> &ouse an. !a6es su*e t&at its o+n (acto*ies *ese*-e D ,e*cent o( t&ei* ca,acit (o* in>season a.2ust!ents4 In>&ouse ,*o.uction allo+s t&e o*gani8ation to be =e5ible in t&e a!ount/ (*euenc/ an. -a*iet o( ne+ ,*o.ucts to be launc&e.4 T&e co!,an also *elies &ea-il on so,&isticate. (ab*ic sou*cing/ cutting/ an. se+ing (acilities nea*e* to its .esign &ea.ua*te*s in S,ain Lu #01/ ,a*a4 D> to tu*n a*oun. ,*o.uct uic6l4 E?cient co!!unication bet+een t&e co!,an an. su,,lie*s is essential in o*.e* to *e.uce ,*o.uction cost an. ualit !aintenance4 bout 0 o( @a*as !e*c&an.ise is inte*nall !anu(actu*e./ AA o( *a+ !ate*ials a*e i!,o*te. (*o! Eu*o,e an. No*t& (*ica/ an. onl a s!all a!ount o( basic ite!s ite!s +it& t&e b*oa.est an. least t*ansient a,,eal a*e outsou*ce. (*o! sia4 T&e global sou*ce. st*ateg ,*o-i.es a la*ge *ange o( ,ossible selection o( (as&ion (ab*ics an. *e.uces t&e .e,en.ence on an ,a*ticula* su,,lie*s4 %o*e t&an &al( o( t&e !ate*ial is ,u*c&ase. in g*e colou* an. is .e. in one o( In.ite5s @a*as ,a*ent co!,an (acilities4 Jnl one +ee6 is *eui*e. (o* t&is ,*ocess to co!,lete +&ic& s&o+s t&e beneKt o( ,*o5i!it an. .o!estic cont*ol Zara’s Supply Chain Advantages and Disadvantages/ n4.4/ ,a*a4 14 I( a ce*tain stle o* .esign su..enl beco!es t&e *age/ @a*a *eacts uic6l/ .esigns ne+ stles/ an. gets t&e! into sto*es +&ile t&e t*en. is still ,ea6ing4 @a*a also &as e5t*a ca,acit on &an. to *es,on. to .e!an. as it .e-elo,s an. c&anges4 Fo* e5a!,le/ it o,e*ates t,icall 4 .as ,e* +ee6 a*oun. t&e cloc6 10
on (ull ca,acit/ lea-ing so!e =e5ibilit (o* e5t*a s&i(ts an. te!,o*a* labou* to be a..e. +&en nee.e. Lu #01/ ,a*a4 1#/13/14
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onclusion In su!!a*/ @a*a +oul. be one o( t&e onl (e+ co!,anies t&at (ull un.e*stan. Global Logistics an. &as !a.e t&e necessa* ste,s to (utu*e ,*oo( t&e c&allenges t&at !a la a&ea. (o* t&ei* su,,l c&ain4 In (act !ost t&e i!,acts o* c&allenges in t&e i!!e.iate (utu*e +ill onl assist an. en&ance @a*as su,,l c&ain4 t @a*a/ c&ange .oesnt .is*u,t t&e sste!< its ,a*t o( t&e sste!4 T&ei* b*an.s success sto* s&o+s t&e st*engt& o( its o,e*ations4 Its c*oss> (unctional o,e*ations st*ateg/ cou,le. +it& its -e*ticall integ*ate. su,,l c&ain/ enables !ass ,*o.uction un.e* ,us& cont*ol/ lea.ing to +ell>!anage. in-ento*ies/ lo+e* !a*6.o+ns/ &ig&e* ,*oKtabilit/ an. -alue c*eation (o* s&a*e&ol.e*s in t&e s&o*t an. long te*! Lu #01/ ,a*a4 3#4 J-e* t&e last .eca.es @a*as int*o.uction o( an agile su,,l c&ain S' in t&e (ast (as&ion in.ust*/ &el,e. t&e! ,osition t&e!sel-es t&i*. in t&e +o*l. *etaile*s *an6ing4 T&is ca!e as a *esult o( close co!!unication bet+een custo!e*s an. its .esigne*s an. t&e abilit to s&i, t&e .esi*e. ite!s in a +ee6 catc&ing t&e sales !o!ent4 ll t&ese ,*o-e t&e S' is an as,ect en&ancing co!,etition a!ong o*ganisations4 not&e* lesson is t&at e?cient ,*o.uction o*gani8ation +it& a goo. balance bet+een in &ouse an. outsou*cing tas6 lea.s to !ini!u! lea. ti!es an. inc*ease in !a*6et s&a*e (o* @a*a4 9&at coul. be conclu.e. (*o! @a*as success (*o! t&e ,e*s,ecti-e o( s,ee. is t&at se-e*al beneKts suc& as i!,*o-e. custo!e* satis(action/ inc*ease. !a*6et o,,o*tunities/ .ec*ease. o-e*all *is6s/ an. *e.uce. total costs can be si!ultaneousl ac&ie-e. t&*oug& being (ast @&ela86o-/ n4.4/ ,a*a4 3D>34
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Re,erences Be*Kel./ S C Baigo**i/ % #013/ Zara’s Fast-fashion Edge/ Bloo!be*g Business/ -ie+e. on 1 Jctobe* #01/ &tt,$+++4bloo!be*g4co!b+a*ticles#013>11> 1#01>outloo6>8a*as>(as&ion>su,,l>c&ain>e.geW4 'a*ugati/ C Liao/ R C S!it&/ : #00D/ ;S,ee.>to>(as&ion$ %anaging global su,,l c&ain in @a*a/ Management of Innovation and e!hnology / ,4 1 14 'loss/ ) #01/ "lo#al $ogisti!s% he Bene&ts and Challenges/ -ie+e. 1 Jctobe* #01/ &tt,$logisticsua*te*l4co!issues10>#a*ticle14&t!l W4 Fis&e*/ % C Ra!an/ #010/ he 'e( S!ien!e of )etailing% *o( Analyti!s are transforming the Supply Chain and Improving +erforman!e/ Ha*-a*. Business :*ess/ Lon.on4 G*ot&/ #01#/ his Apparel Brand realised the Big Disadvantage of outsour!ing to China/ -ie+e. # Jctobe* #10/ &tt,$+++4businessinsi.e*4co!4aut&is> a,,a*el>b*an.>*eali8e.>t&e>big>.isa.-antage>o(>outsou*cing>to>c&ina>#01#>3W4 Lu/ ' #01/ Zara’s se!ret to retail su!!ess , its supply !hain / -ie+e. on #0 Jctobe* #01/ &tt,s$+++4t*a.egec6o4co!blog8a*a>su,,l>c&ain>its>sec*et> to>*etail>successW4 %anne*s>Bell/ X #01/ "lo#al $ogisti!s Strategies% Delivering the "oods / ogan :age/ Lon.on4 %angan/ L C Lal+ani/ ' C Butc&e*/ T C Xa-a.,ou*/ R #01#/ "lo#al $ogisti!s Supply Chain Management / #n. e.n/ Xo&n 9ile C Sons/ '&ic&este*/ U4 %e&*2oo/ % C :ase6/ @ #01/ ;I!,act o( :*o.uct Va*iet on Su,,l '&ain in Fast Fas&ion ,,a*el In.ust*/ +ro!edia CI)+/ -ol4 17/ ,4 #A>3014 %eln6/ S C )a-is/ E C S,e6!an/ R C San.o*/ X #010/ ;Jutco!e>)*i-en Su,,l '&ain/ MISloan Management )evie( / -ol4 1/ no4 #/ ,,4 33>3D4 Nan.las6a*/ #011/ *ungry Beast ZA)A #usiness su!!ess .ey model / -ie+e. #3 Jctobe* #01/ &tt,s$+++4outube4co!+atc&-On0!i6F1Es+ W4 S,a*6s C Leig& C Fe*nie C Xo&n #01/ $ogisti!s and )etail Management% Emerging Issues and 'e( Challenges in the )etail Supply Chain / t& e.n/ ogan :age/ Lon.on4 Ste-enson/ S #01#/ +ol/a Dot are in0 +ol/a dots it is1 / -ie+e. 1 Jctobe* #01/ &tt,$+++4slate4co!a*ticlesa*tso,e*ations#01#0A8a*aZsZ(astZ(as&ionZ&o+Z t&eZco!,anZgetsZne+ZstlesZtoZsto*esZsoZuic6lZ4&t!lW4 Un6no+n/#013/ he Business of Fast Fashion2 Minute MBA / -ie+e. ## Jctobe* #01/ &tt,s$+++4outube4co!+atc&-O@&6B(b+'85c W4
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Un6no+n n4.4/ Zaras Supply Chain Advantages and Disadvantages Business Essay / -ie+e. 1 Jctobe* #01/ &tt,$+++4u6essas4co!essasbusiness8a*as>su,,l>c&ain>a.-antages>an.> .isa.-antages>business>essa4,&,W4 Un6no+n #01/ "lo#al +o(ers of )etailing 3456% Em#ra!ing Innovation/ )eloitte/ ust*alian E.ition4 Von .e* G*ac&t/ H C )a*6lo+/ I #01#/ ;T&e (utu*e o( logistics (o* global +ealt& scena*ios an. .iscontinuities until #0#/ Foresight / -ol4 1/ no4 / ,,4 0>14 @&ela86o-/ G n4.4/ Agile Supply !hain% Zara’s !ase study analysis/ St*at&cl.e Uni-e*sit Glasgo+4
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