Lecture #3 Zara & Ch. 3

Question 1

two main goals in business

Answer 1

minimize risk, maximize return

Question 2

What are the 4 points that make Zara so great

Answer 2

customer feedback, lowinventory, mess sells at full price, make their own mess (decreases time to market &flexibility)

Question 3

What are the two incentives that allow Zara to turn inventory so quick?

Answer 3

Employees work on commission, buyers fear it may be gone if they dont buy it

Question 4

difference between value chain and supply chain

Answer 4

value chain is internal and supply chain is external

Question 5

How does ZAra leverage its informatuion to proiduce results?

Answer 5

vertically integrated& supplies itself, tech orchestrated supplier coordination, just in time manufacturing, finely tuned logistics

Question 6

How does Zara manage design differently thatn competitiors?

Answer 6

hire young designers & rotate them in with Veterans, make a whole mess of items(30,000), forcasts fashion trends using data rather than hunch, incentives for designers to make good mess, work backwards approach

Question 7

What are Zara’s main data sources?

Answer 7

Point of Sale systems, asking customers directly, investigating theunsold item pile.everything fed into the cube

Question 8

How does Zara manage logistics differently?

Answer 8

Vertical integration, resopnsive to fashion shifts(to the point of ordering fabric undyed to remain fast & flexible), not much in the way of contract manufacturing & limits these contracts to longer self life items like jeans & tees, huge distribution center where nothing sits for more than 72 hrs, Inventory=death

Question 9

How are ZAra operations managed differently?

Answer 9

fabric cut and dyed by automated machines, stitching done locally, schedule more employess to serve peak times & slash slots for least busy times, clothes shipped on hangers

Question 10

How does ZAra mamage marketing differently?

Answer 10

little to no ads, Z-day (twice weekly delivery)consumer cult following, limited product runs to encourage buying at full pop

Question 11

What is aat the center of all of ZAras efficiencies?

Answer 11

Inforamtion systems, but must be paired with the peiople & processes to make to work

Question 12

What are the four steps in the Supply chain

Answer 12

Suppliers->Manufacturers->distributors->retailers

Question 13

Is Zara a product innovation company or a process innovation company?

Answer 13

process innovation

Question 14

what is disintermediation

Answer 14

removing a part of the supply chain

“direct from the source

Question 15

What are two tools used by Dell

Answer 15

Demand shaping and just in time manufacturing

Question 16

What is the bull whip efffect? & what is tge effect of the bull whip effect? & what do you do about it

Answer 16

variablity in order size and order timing increases as you move up the supply chain (toward suppliers), it decreases profits,give all participants in the supply chain access to the consumer demand information 7 have interorganizational info sharing

Question 17

If you share inforation itnerorganizationally across the supply chain what re the 4 effects?

Answer 17

1) reduces bullwhip effect(increasing pofits by lowering costs)
2) allows suppliers and customers to reduce inventory size and costs
3) improves delivery secheduling (just in time delivery)

Question 18

What is Zara’s core competency?

Answer 18

Process innovation

Question 19

What are some issued for Zara moving forawrd

Answer 19

only one distribuion center in spain, fuel price & exchange rate sensitive, competition is catching on