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Zara - Operational Analysis

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Zara is owned by Inditex, one of the largest apparel retailers in Spain. Since its first official international roll-out in 1990, Zara has become Inditex’s largest and the most internationalized chains, operating 500 stores in 30 countries and generating more than 85% of Inditex’s sales. The success of Zara can be contributed to the company’s operational strategy which is to offer the wide variety of utmost trendy and fashionable products in high frequency and to adjust its production by quickly responding to the current sales at the stores.

Business System and Process
Zara’s operations system and process are designed to manufacture its most fashion-sensitive products internally and to reduce cycle time of production, in order to quickly respond to current market trend. Zara’s production process starts from designing, which takes place twice a year - July and January, by referring to the luxury brand collections and working with store managers to develop initial designs. Simultaneously, development of samples is carried out, while determining the venues of sourcing – internal or outsourced, based on price competitiveness. Throughout the selling period, design team continues to work with store managers to figure out better selling items, and communicate back to its manufacturing team to get these items quickly to capture the demand.

In production stage, Zara sources fabric and other components with the help of purchasing offices in Barcelona and Hong Kong. For the components that are produced outside of Spain, Comditel, wholly-owned subsidiary of Inditex, works with one of its 200 external suppliers in production of the parts. Comditel purchases one-half of fabric un-dyed (gray) material to facilitate in-season adjustment throughout the season and manages dyeing, patterning and finishing of fabric production and finally ships the finished products to in-house manufacturing factories or external outsourced sewing factories. 40% of the finished garments are...

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