2014

SUPPLY CHAIN MANAGEMENT : ASSIGNMENT # 1 NOOR-UL-HUDA 101631098 ABDUL REHMAN 101631042 ABDUL WAHAB 101631047 TALHA TAHIR 101631060

SUBMITTED TO : SIR HARIS ASLAM

Supply Chain Management : Zara Apparel Manufacturing and Retail

Question 1 : What advantage does Zara gain against the competition by having a very responsive supply chain? Answer 1 : They sells most of it products on half markdowns in its store. Short lead time for new variety increases there market. Increase in number of there retail store. Increase their flexibility in providing new styles to coustmer.

Question 2 : Why has Inditex chosen to have both in-house manufacturing and outsourced manufacturing? Why has Inditex maintained manufacturing capacity in Europe even though manufacturing in Asia is much cheaper? Answer 2 : To fullfill there uncertain and predictible demands. To launch their new styles according to there targets ( 5 to 6 week). To setting their trends quickly to compete with there competitors in market. To control their demand.

They choose europe because there max number of stores are in europe and there they also have a quick and flexible sources which helps them to lauch their designs quickly.

Question 3 : Why does Zara source products with uncertain demand from local manufacturers and products with predictable demand from Asian manufacturers? Answer 3 : There main target is to launch new design after every 5 to 6 week to attract the coustmer so at that point cost doesnt matter that much so they utilize there local manufacturers because they are quick and flexible so thats why they source uncertain demand from them. And outsource the predictable demand from asia at low cost.

Question 4 : What advantage does Zara gain from replenishing its stores multiple times a week compared to a less frequent schedule? How does the frequency of replenishment affect the design of its distribution system? Answer 4 : It allow them to match supply closely to the coustmer demand other than there competitors. In this manner there distribution system keep them up to date to derived the coustmer interest towards them. Question 5 : Do you think Zaras responsive replenishment infrastructure is better suited for online sales or retail sales? Answer 5 : Responsive replenishment is better suited for the retail stores because in online sales there is a time to deliver the product to the coustmer so in this time we can manage our product to parcel the coustmer. But in retail store we have to display the products.