Flashcards in Lecture #3 Zara & Ch. 3 Deck (19):
two main goals in business
minimize risk, maximize return
What are the 4 points that make Zara so great
customer feedback, lowinventory, mess sells at full price, make their own mess (decreases time to market &flexibility)
What are the two incentives that allow Zara to turn inventory so quick?
Employees work on commission, buyers fear it may be gone if they dont buy it
difference between value chain and supply chain
value chain is internal and supply chain is external
How does ZAra leverage its informatuion to proiduce results?
vertically integrated& supplies itself, tech orchestrated supplier coordination, just in time manufacturing, finely tuned logistics
How does Zara manage design differently thatn competitiors?
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
What are Zara's main data sources?
Point of Sale systems, asking customers directly, investigating theunsold item pile.everything fed into the cube
How does Zara manage logistics differently?
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
How are ZAra operations managed differently?
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
How does ZAra mamage marketing differently?
little to no ads, Z-day (twice weekly delivery)consumer cult following, limited product runs to encourage buying at full pop
What is aat the center of all of ZAras efficiencies?
Inforamtion systems, but must be paired with the peiople & processes to make to work
What are the four steps in the Supply chain
Is Zara a product innovation company or a process innovation company?
what is disintermediation
removing a part of the supply chain
"direct from the source
What are two tools used by Dell
Demand shaping and just in time manufacturing
What is the bull whip efffect? & what is tge effect of the bull whip effect? & what do you do about it
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
If you share inforation itnerorganizationally across the supply chain what re the 4 effects?
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)
What is Zara's core competency?