VIA

Group Member;Moe Thu (0346999)Mya Ye Lai Khaing (1153181)Hnin Thiri (1151936 )

All stages and parties involved, directly or indirectly, in fulfilling a customer request.

Internally, the purchasing process includes all functions involved in fulfilling a customer request (product development, marketing, operations, distribution, finance, customer service).

Externally, it includes the suppliers, vendors, manufacturers, transportation, and distributors, that exist to transform raw materials to final products and supply those products to customers.

Outsourcing & In House

Multiple Sources

Locally & Internationally

Supplier’s Responsibility

Inventory Management

Distribution System

Retail Strategy

ZARA AppleOutsourcing

Single Source & Multiple Sources

Internationally

Supplier’s Responsibility

Inventory Management

Distribution System

Retail Strategy

Outsourcing vs In-House

keeping design and half of its products

manufacturing in-house or with some

strategic partnerships located nearby

Headquarters La Corunna

Use around 500 sub-contractors located

close to the head office for all sewing

operations

Half of its products are procured from

400 outside suppliers

.

ZARAOutsourcing • Low Overhead –outsource labor to a

country with very cheap labor and favorable taxes, that why Apple done by 100% outsourcing in china.

• Low Cost of Goods Sold – Make friends with suppliers, get very cheap raw materials, By shouldering part of the factory production, Apple got major discounts.

• Effective Supply Chain – Ensure that the customers get the products at the shortest time possible, Apple has access to new component technology months or years before its rivals. This allows it to release groundbreaking products that are actually impossible to duplicate.

Apple

ZARA

Multiple Sources

Fabrics comes from a range of 260

suppliers . In order to minimize

dependency on single supplier and

encourage maximize responsiveness

from them.

Having its own dying facilities can

quicker respond to customer demand.

AppleMultiple Sources

Flash memory come from Korea

(Samsung ,Toshiba).

Aluminum and stainless steel case is

also made by a Taiwanese firm,

Catcher Technology and others.

Display by LG Display, Samsung and

Seiko Epson

Single Source• Dragon trail Glass was manufactured by

Asahi Glass Company in Japan.

ZARA Locally & Internationally

70% are in Europe & most of the rest

are Asia where has a clear cost & quality

advantage.

Why they located production plants in

Europe and Not in Asia? Although the

increased cost in production will not be

offset by the cost reduction in

transportation concerning the labour

cost is on average 17-20 times the cost in

Asia.

Apple Internationally

80% are in China & most of the rest are

UK , USA, Germany , Japan where has the

advance technology of important parts for

their product.

To get great profit margins. Charge high

prices or reduce costs. Apple does both.

Apple have perfect supply chain skill to do

manufacturing internationally.

ZARA

Ensure Quality

Adherence to the production

schedule

Responsible for picking up &

deliver of Production items

Timely Delivery & Service

Apple

Ensure Quality

Social Responsibility such as

quality, cost, and timely delivery.

Environmental Responsibility

Perfect communication with

industrial management system.

Apple Maintain a fairly low inventory-on-

hand ratio.

To hold the inventory for a next-day sale

to grant its inventory control specialists

the time to “calmly and accurately”

process new shipments.

ZARA Decreased quantities & decreased

inventory risks.

Small shipments & carrying low

inventory

Product lines also up to date

market trends and consumer

behavior (Fresh Fashion). It

decrease the inventory holding

cost.

Policy of moving unsold items

after two or three weeks

ZARA Centralized

- Major Distribution center in La

Coruña

& Minor Distribution center in

Zaragoza

Short – Lead time (2 to 4 weeks)

compare with its competitors

Quick delivery to store twice a week

Maximum of 24 hours to stores inside

Europe & 48 hours in America.

Apple• Not sold through direct sales force due to

small volume

• High level of service

• On line services for companies

• Governments buy mainly through tenders.

ZARA’s Retail Strategically located all of their stores

in prime retail districts for visibility

marketing

Spends 0.3 % of total revenues on

marketing & advertising

Zara invest heavily in their store

layouts and customer are trained to

visit their stores often cos new design

are presented weekly

Apple’s Retail

Paying off for the company. As it continues to open new stores around the world, its share of the market grows.

the opportunity to introduce a consistent and strong retail presence of its own, rather than being represented only by a loose collective of third party resellers.

made their stores a touch-worthy experience.  Touch anything, stay as long as you want, ask as many questions as necessary and feel free to borrow their WiFi.

retail presence such a positive success

     

Overall Strategy ZARA Apple

Supply Chain Vertical Integration Vertical Integration

Make vs Buy Analysis Outsource & In House Outsource

Sources of Supply Multiple Single & Multiple

Inventory ManagementLow inventory risk & Low carrying cost

Low inventory risk & Low carrying cost

Supplier KPIQuality & timely delivery

Ensure Quality & Delivery, Social & Environmental Responsibility