zara. group h ang ruixianu096845y chia joo leng jasmineu097028b nah zheng xiang philsona0067379m tan...
TRANSCRIPT
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Zara
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Group HAng Ruixian U096845Y
Chia Joo Leng Jasmine U097028B
Nah Zheng Xiang Philson
A0067379M
Tan Hong Chuan Julian A0067407A
Tan Jian Yue A0075054J
Wong Chih Yong A0075128E
Our Team
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Introduction Competitors Updates Challenges Recommendations
Presentation Agenda
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Introduction
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About Zara
Founded by Amancio Ortega In 1975, the first Zara store was opened in La Coruna, Spain
Inditex was formed as the holding company atop of Zara, other retail chains & a network of internally owned suppliers (1985)
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Focused on opening stores in prime city locations
Rapid response to market demandsOffer new clothing styles faster than its competitors
Inditex has become one of the world's largest clothes makers in the fast fashion industry
1,671 branches in 78 countries worldwide
About Zara
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Zara’s Supply Chain
Maintains control over its product design, manufacturing, distribution & retailing operations
1. Design
2. Production
3. Distribution
4. Retail
Consists of 4 Phases:
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Competition
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Closest competitorHennes and Maurtiz (H&M)
Founded on 1947, SwedenInnovating around design and distributionSupply Chain Phases
Design, Production, Distribution and Retail
Competitor
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Production PhaseOutsource production process
60% in Asia, 40% in EuropeLow production cost to maximize profit at Asia
Implications to ZaraNo production outsourcing
Higher overall production cost
H&M’s Supply Chain
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H&M’s Supply Chain
Distribution PhaseDistribution center(DC) located at every countryDaily replenishment to increase stock turnover rateAble to meet customer’s demand on time
Implications to Zara2 Large DCs located in Spain
Slower replenishment rateUnable to meet customer’s demand on time
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Retail Phase40% lower product selling cost compared to most competitors
Implication to ZaraHigher product cost due to higher production cost
H&M’s Supply Chain
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Competitors
Challenges Zara faced against H&M
Higher production costSlower replenishment rateSlower at meeting customer demand
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Updates on Zara’s SCM
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Retailer’s Work Process
Distribution Network and Centre
Inventory Management
Updates on Zara’s SCM
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Shifted to third party logistics providers
Shifted to factories
Enhancements made to PDA
Retailer’s Work Process
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Consolidated transportation across Zara’s different brands
DCs are equipped to handle small scale customer orders
Distribution Network and Centre
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Implemented sophisticated inventory allocation model
Inventory Management
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Challenges Faced
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1. Limitation of company wide interconnectivity
2. Obsolescence and Limitation of Technologies used
Challenges
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Challenge 1• Cannot determine order requirements
accurately• No comprehensive overview of the
overall inventory and sales information
POS Terminals used in store were not interconnected via any in-store network
• Slow transmission of data• Inaccurate data • Sales tallied and audits done manually
POS terminals/PDAs could not share information
• Inefficient store operations • Inaccurate stock information• Unhappy customers
Telephone to check whether a nearby store had a particular item
•Discrepancies between orders and sales data•More time and energy spent on administrative work
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Challenge 2
• Any upgrades for existing machines rendered DOS-incompatible
• No guarantee from vendor• Core operations at risk
DOS outdated, no longer supported
• Zara disadvantage• Store managers need more functions• Business continuity at risk
Limited capabilities
•Unable to find vendor to supply or service hardware
•Hard to find developers for outdated platform •Limited capabilities
PDA becoming obsolete
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Mobile Enterprise Applications
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Run complete OS softwareUseful functions for SCM execution
Gradually Replace PDAs
Our Recommendation
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Benefits
Timeliness and Correctness
Instant access and updatesImprove cycle time & efficiency
Employee Responsiveness
Better “reachability”
Scalibility & Updates More functionalities
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Challenges Addressed
Obsolescence of PDA Systems
Technical support issues
Limited Connectivity Information SharingData Discrepancy
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Feasibility Evaluation
CostRequire customized apps
TimeTraining for personnel
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Upgrade POS Terminals
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Intuit-HP Retail SolutionHP’s POS SoftwareFull fledged Mouse & KeyboardIndustry-proven software
Gradual replacement of DOS systems
Phased Approach
Our Recommendation
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Benefits
Interconnectivity between stores
Merging of data into one system
Precise measurement of stocksGlobal trends and developments
Real-time information sharingReact faster to sales informationImprove decision making
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Limitations of Existing NetworkAutomatically collect and process dataReduces need for calls & manual checks
Increasing obsolescence of DOSModern, widely supported OSReduce reliance on sole vendorFuture-proof their operations
Challenges Addressed
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Feasibility Evaluation
Staff adaptability to changeNeed to ensure sufficient trainingEmpower staff to fully utilize system
Risks associated with changeUse phased implementation approachTest stability on pilot stores
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Conclusion
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ZARA’s competitor (H&M) The need to stay competitive
ZARA’s SCM updatesImportance of continual innovation
Challenges & Recommendations Innovations through cutting-edge technologies
Conclusion
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Questions & Answers