0% found this document useful (0 votes)
25 views18 pages

Zara Clothing Company Supply Chain SCM Globe

Uploaded by

Shahed Shaon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
0% found this document useful (0 votes)
25 views18 pages

Zara Clothing Company Supply Chain SCM Globe

Uploaded by

Shahed Shaon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 18

SCM Globe

Zara Clothing Company Supply Chain


mhugos 5 years ago

CASE STUDY CONCEPT: The Zara supply chain drives its successful business
model. Run simulations of the Zara supply chain to see how it works, and how to
improve it.

Zara changes its clothing designs every two weeks on average, while competitors
change their designs every two or three months. It carries about 11,000 distinct items
per year in thousands of stores worldwide compared to competitors that carry 2,000
to 4,000 items per year in their stores. Zara’s highly responsive supply chain is central
to its business success. The heart of the Zara supply chain is a huge, highly automated
distribution center (DC) called “The Cube”. The screenshot below shows a closeup
satellite view of this facility.

(click on screenshot for larger image)

The company was founded in Spain in 1974 by Amancio Ortega and his wife Rosalía

https://www.scmglobe.com/zara-clothing-company-supply-chain/?amp=1 26/4/25, 1 37 PM
Page 1 of 21
:
Mera. It is the flagship business unit of a holding company called Inditex Corporation
with headquarters in Arteixo, Galicia, a city in northwestern Spain near where Mr.
Ortega was born. In 2020 Zara was ranked as the 41st most valuable brand in the
world by Forbes (see bibliography below).

NOTE: This is an advanced case. Work through the three challenges of the
beginning case, “Cincinnati Seasonings” before taking on the challenges in this case.

[ Instructors, students and professionals can request a free SCM Globe trial demo
]

Company Business Model

Agents for the company are always scouting out new fashion trends at clubs and social
gatherings. When they see inspiring examples they quickly send design sketches to the
garment designers at the Cube. New items can be designed and out to the stores in 4 –
6 weeks, and existing items can be modified in 2 weeks.

The company’s core market is women 24 – 35 years old. They reach this market by
locating their stores in town centers and places with high concentrations of women in
this age range. Short production runs create scarcity of given designs and that
generates a sense of urgency and reason to buy while supplies last. As a consequence,
Zara does not have lots of excess inventory, nor does it need to do big mark-downs on
its clothing items.

Zara has 12 inventory turns per year compared to 3 – 4 per year for competitors.
Stores place orders twice a week and this drives factory scheduling. Such short term
focused order cycles make forecasts very accurate, much more accurate than
competitors who may order every two weeks or every month.

Clothing items are priced based on market demand, not on cost of manufacture. The
short lead times for delivery of unique fashion items combined with short production
runs enable Zara to offer customers more styles and choices, and yet still generate
urgency to purchase because items often sell out quickly. And a particular item or style

https://www.scmglobe.com/zara-clothing-company-supply-chain/?amp=1 26/4/25, 1 37 PM
Page 2 of 21
:
may not be available again after it sells out. Zara sells 85 percent of its items at full
price compared to the industry average of selling only 60 percent of items at full price.
Annually there is 10 percent of inventory unsold compared to industry averages of 17 –
20 percent.

In Spain customers visit Zara stores 17 times per year on average compared to 3 times
per year for competitors. Because their clothing designs change often, it is harder for
people to see them clearly online. So they are encouraged to come into the stores
instead and try on the unique fashions that Zara offers (screenshot below shows
people at a Zara store in Madrid, Spain).

Zara spends its money on opening and growing its stores instead of spending a lot on
ad campaigns. Estimates vary on the number of Zara stores worldwide. An article in
the New York Times Magazine (November 2012, “How Zara Grew into the World’s
Largest Fashion Retailer“), placed the store count at around 5,900. An article in
Forbes simply states there are “more nearly 3,000 stores” (2020, “The World’s Most
Valuable Brands – #41 Zara“). Annual sales for 2019 were estimated by Forbes to be
$21.9 billion. The holding company, Inditex SA, is a public company and Inditex
provides annual statements, but it does not break out Zara sales from sales of the other
brands owned by Inditex (Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho,

https://www.scmglobe.com/zara-clothing-company-supply-chain/?amp=1 26/4/25, 1 37 PM
Page 3 of 21
:
Zara Home, and Uterqüe). Zara uses a flexible business model where its stores can be
owned, franchised, or co-owned with partners. So it is not always possible to find exact
numbers for Zara’s business operations and finances.

Manufacturing and Supply Chain Operations Make Zara


Unique

Zara buys large quantities of only a few types of fabric (just four or five types, but they
can change from year to year), and does the garment design and related cutting and
dyeing in-house. This way fabric manufacturers can make quick deliveries of bulk
quantities of fabric directly to the Zara DC – the Cube. The company purchases raw
fabric from suppliers in Italy, Spain, Portugal and Greece. And those suppliers deliver
within 5 days of orders being placed. Inbound logistics from suppliers is mostly by
truck.

The Cube is 464,500 square meters (5 million square feet), and highly automated with
underground monorail links to 11 Zara-owned clothing factories within a 16 km (10
mile ) radius of the Cube. All raw materials pass through the Cube on their way to the
clothing factories, and all finished goods also pass through on their way out to the
stores. The diagram below illustrates Zara’s supply chain model.

https://www.scmglobe.com/zara-clothing-company-supply-chain/?amp=1 26/4/25, 1 37 PM
Page 4 of 21
:
(click on diagram for larger image)

Zara’s factories can quickly increase and decrease production rates, so there is less
inventory in the supply chain and less need to finance that inventory with working
capital. They do only 50 – 60 percent of their manufacturing in advance versus the 80
– 90 percent done by competitors. Zara does not need to place big bets on yearly
fashion trends. They can make many smaller bets on short term trends that are easier
to call correctly.

The Zara factories are connected to the Cube by underground tunnels with high speed
monorails (about 200 kilometers or 124 miles of rails) to move cut fabric to these
factories for dyeing and assembly into clothing items. The monorail system then
returns finished products to the Cube for shipment to stores. Here are some facts
about the company’s manufacturing operations:

Zara competes on flexibility and agility instead of low cost and cheap labor. They
employ about 3,000 workers in manufacturing operations in Spain at an average
cost of 11.00 euros per hour compared to average labor cost in Asia of about 0.80
euros per hour.

https://www.scmglobe.com/zara-clothing-company-supply-chain/?amp=1 26/4/25, 1 37 PM
Page 5 of 21
:
Zara factories in Spain use flexible manufacturing systems for quick change over
operations.
50% of all items are manufactured in Spain
26% in the rest of Europe
24% in Asia and Africa

The screenshot below illustrates how the Zara supply chain is organized.
Manufacturing is centered in northwestern Spain where company headquarters and
the Cube are located. But for their main distribution and logistics hub they chose a
more centrally located facility. That facility is located in Zaragoza in a large logistics
hub developed by the Spanish government. Raw material is sent by suppliers to Zara’s
manufacturing center. Then finished garments leave the Cube and are transported to
the Zara logistics hub in Zaragoza. And from there they are delivered to stores around
the world by truck and by plane.

(click on screenshot for larger image)

[ Instructors, students and professionals can request a free SCM Globe trial demo
— NOTE: This is an advanced case. Work through the three online challenges of
the beginning case, “Cincinnati Seasonings” before working with this case. ]

Zara can deliver garments to stores worldwide in just a few days: China – 48 hrs;

https://www.scmglobe.com/zara-clothing-company-supply-chain/?amp=1 26/4/25, 1 37 PM
Page 6 of 21
:
Europe – 24 hrs; Japan – 72 hrs; United States – 48 hrs. It uses trucks to deliver to
stores in Europe and uses air freight to ship clothes to other markets. Zara can afford
this increased shipping cost because it does not need to do much discounting of
clothes and it also does not spend much money on advertising.

Zara’s Supply Chain is Lean and Agile

Stores take deliveries twice per week, and they can get ordered inventory often within
two days after placing their orders. Items are shipped and arrive at stores already on
hangers and with tags and prices on them. So items come off delivery trucks and go
directly onto the sales floor. This makes it possible for store managers to order and
receive the products customers want when they want them, week by week.

Zara stores respond practically in real-time as styles and customer preferences evolve.
It is a great business model for success in the high-change and hard to predict fashion
industry. It means about half of the clothing the company sells, which includes most of
its high margin and unique fashion items (but not its lower margin basic items), is
manufactured based on highly accurate, short-term (2 – 6 week) demand forecasts.
Because this business model tracks so closely to real customer demand from one
month to the next, it frees the company to a large degree from getting caught in
cyclical market ups and downs that ensnare its competitors (those cycles are driven by
boom-to-bust gyrations generated by the bullwhip effect). Turbulence in the global
economy since 2008 has hurt sales at many competing fashion retailers, but Zara has
seen steady, profitable growth during this time.

[Editor’s Note: During 2020 Inditex, owner of Zara and other fashion brands
closed more than 1,000 stores worldwide in response to the Covid pandemic and
increased its focus on online sales. Then in 2021 store business rebounded and
surpassed pre-pandemic levels. Can you think of some ways these changes in Zara’s
business model affected Zara’s supply chain? ]

A fast-moving and finely tuned supply chain like Zara’s requires constant attention to
keep it running smoothly. Supply chain planners and managers are always watching

https://www.scmglobe.com/zara-clothing-company-supply-chain/?amp=1 26/4/25, 1 37 PM
Page 7 of 21
:
customer demand and making adjustments to manufacturing and supply chain
operations. The screenshot below shows the result of one simulation using the supply
chain model outlined above. Continuous adjustments need to be made to factory
production rates, vehicles, delivery routes, and schedules to keep this supply chain
working well.

(click on screenshot for larger image)

Zara is a clothing and fashion retailer that uses its supply chain to significantly change
the way it operates in a very traditional industry. No other competitor can copy its
business model until it first copies its supply chain. And since supply chains are
composed of people, process, and technology, even the latest and greatest technology
is not a competitive advantage all by itself. People must be well trained, and processes
must be put in place that enable people to apply their training and their technology to
best effect.

Buying technology similar to that used by Zara is easy. But for the technology to be
used effectively, competitors must learn about the mental models and the operating
procedures used by Zara. Good mental models enable people to understand the
potentials and see the opportunities that a real-time supply chain offers. Effective
operating procedures enable people to act on what they see and capitalize on the

https://www.scmglobe.com/zara-clothing-company-supply-chain/?amp=1 26/4/25, 1 37 PM
Page 8 of 21
:
competitive advantages their technology gives them.

Zara has spent more than 30 years building its unique real-time supply chain and
training its people. So competitors have a lot of learning to do to create the mental
models, and roll out the operating procedures needed to do what Zara does so well.

[ See our blog article “Five New Supply Chain Technologies and How to Use
Them” for more about new technologies and how they can be used to improve
supply chain operations and create competitive advantages for companies.]

YOUR FIRST SUPPLY CHAIN CHALLENGE

Get this supply chain to run for 15+ days and keep inventory and
operating costs as low as you can.

Imagine you are in charge of Zara’s supply chain operations. This case study and
supply chain simulation will give you an appreciation of what that job is like. In this
exercise your mental model of Zara’s supply chain will expand and your understanding
of how this supply chain works will deepen. You will see the continuous adjustments
that need to be made to keep the supply chain working and to keep operating expenses
and inventory levels under control.

Import a copy of the Zara supply chain model from the online library into your
account. When you run the first simulation you will see a problem occurs on day 5. As
in the real world, there are many possible ways to respond to this problem. And
depending on how you respond, other problems will appear as you work toward
getting your supply chain to run for 15 days. Start by trying things and doing whatever
seems necessary based on simulation results. When you get an initial 15-day solution,
then refine your solution to keep the supply chain running for 15 days, but at lower
costs in transportation, facility operations and amounts of on-hand inventory across
the supply chain.

https://www.scmglobe.com/zara-clothing-company-supply-chain/?amp=1 26/4/25, 1 37 PM
Page 9 of 21
:
Its agile and responsive supply chain enables Zara to work on a short sales and
operations planning (S&OP) cycle. Let’s assume Zara works on a 15 day cycle where its
competitors work on 30-day or even 60-day planning cycles. So you are creating a 15-
day supply plan to meet the 15-day demand plan which is already entered into
the model in the form of product demand at the different stores. To get this supply
chain to meet demand and run for 15+ days you need to make adjustments to
elements of your supply plan:

Store delivery amounts and frequencies for different truck and air freight routes
Product manufacturing rates at Zara clothing factories
Movement of products between Zara Cube, Zara factories, and Logistics Hub in
Zaragoza
Supplier delivery amounts and frequencies for delivering bulk fabric to the Cube

The screenshot below shows a closeup of the Zara Logistics Hub in Zaragoza, Spain.
Product deliveries are made to stores by airplane and truck from this facility every day.

When you have questions about how to work with this case, the answer is always to
ask yourself, “What would I do if this was the real world and I was the
person in charge?” Model and simulate different ideas. Make reasonable

https://www.scmglobe.com/zara-clothing-company-supply-chain/?amp=1 26/4/25, 1 37 PM
Page 10 of 21
:
assumptions and estimates. Then add/change/delete products, facilities, vehicles and
routes as called for in your supply chain model to reflect your ideas. When you run
simulations you will see how well different ideas work. Go with the ideas that work
best to find the solutions you need.

Look in the online guide for useful tips and techniques that will help as you work with
this case. Here are some places to look:

Analyzing Simulation Data


Tips for Building Supply Chain Models
Cutting Inventory and Operating Costs

ZARA SUPPLY CHAIN REPORTING TEMPLATE: Import your simulation data


into this template to create 15-DAY P&L REPORTS and key performance
indicators. Zara’s agile supply chain enables it to use shorter planning cycles (15-days
instead of 30-days). The reporting template is designed for use with the supply chain
model in the online library titled “Zara Clothing Company Ver4”. If you add more
products, facilities, or vehicles to the model you will need to expand the spreadsheet to
accommodate those additions. A sample P&L report created from simulation data is
shown below: Download a copy of the Zara Clothing Company P&L
Reporting Template here

[If you are using SCM Globe Professional version, these reports can be generated
automatically by clicking on the “Generate P&L Report” button on the Simulate
Screen]

https://www.scmglobe.com/zara-clothing-company-supply-chain/?amp=1 26/4/25, 1 37 PM
Page 11 of 21
:
(click on image for larger picture)

CREATE AN EXECUTIVE BRIEFING — a 3 to 5 page report or a short deck of


presentation slides. Use screenshots and data produced by simulations to illustrate
what you learned about how the Zara supply chain operates. Explain what were the
main problems you encountered in getting your supply chain to run efficiently for 15+
days. Show what you did to address those problems. Present the three or four main
things you learned about this supply chain, and explain why these things make this
supply chain such a competitive advantage for Zara.

SAVE BACKUP COPIES of your supply chain model from time to time as you make
changes. Click “Save” button next to your model in Account
Management screen. There is no “undo”, but if a change doesn’t work out, you
can restore from a saved copy. And sometimes supply chain model files (json files)
become damaged and they no longer work, so you want backup copies of your supply
chain to restore from when that happens.

YOUR SECOND CHALLENGE

Expand this supply chain to support more stores, and keep inventory and

https://www.scmglobe.com/zara-clothing-company-supply-chain/?amp=1 26/4/25, 1 37 PM
Page 12 of 21
:
operating costs under control.

Do some research on store rental costs, labor rates, transportation costs and product
demand in different markets, then use your research to update and expand your model
of Zara’s supply chain:

Go to websites of commercial real estate brokers in cities of interest and see what
you can find out about rents (for cities in North America start with
www.cityfeet.com and for cities in other parts of the world start with
www.knightfrank.com).
Research salary levels and median incomes in different cities. New stores open in
cities with median incomes high enough to be profitable markets for Zara. Store rent
and operating costs will also be set by market rates in those cities.
Go to 3PL and logistics services company websites to find out about transportation
costs. Assume air freight rates from Zaragoza remain the same to any city, but truck
transportation costs will be different in different cities.
Consider subdividing the two high level product categories (Zara Basics Pack, Zara
Fashion Pack) into lower level product categories to get more insight and into how
this supply chain operates. What are some lower level product categories that make
up the Fashion Pack, or the Basics Pack?
Do searches to find fashion industry demand forecasts for clothing in different cities
around the world. Use that research to set the product demand levels in the new
stores. You can also update product demand levels at existing stores based on this
research.
You can measure the carbon footprint of different supply chain designs. There are
default estimates of carbon generation already entered for facilities and vehicles,
and the simulations use this to calculate the supply chain carbon footprint. You can
enter your own estimates for carbon generation for the facilities and vehicles if you
wish.

Do the best you can with the time available! — Do internet searches on
relevant key words and phrases. See what comes up, and select sources that seem the

https://www.scmglobe.com/zara-clothing-company-supply-chain/?amp=1 26/4/25, 1 37 PM
Page 13 of 21
:
most trustworthy and accurate (that’s what we did for this case study; our assumptions
and sources are listed below). If you can’t find the exact numbers you are looking for,
then estimate numbers you need based on other numbers you find in your research
(please read “All Supply Chain Models are Approximations“). Do not spend
more than your allocated time doing research. As the saying goes, “Good is good
enough.” Document your sources; make your best estimates; and move on.

Update and expand the Zara supply chain model using your research
data. Update product prices and demand at the existing stores based on your
research. Also experiment with adding new stores in other cities in Europe, Asia,
North America, South America or Africa (represent all stores in a single city with just
one or two stores and keep the total number of facilities in your model to between 15 –
20).

For added realism see how stores in New York and Shanghai are located in the existing
supply chain model in the SCM Globe library. Stores can be on actual Zara store
locations or can be placed in the middle of a cluster of actual Zara stores. Enter the
collective demand, costs and on-hand inventory for all actual stores represented by a
single store in your model.

https://www.scmglobe.com/zara-clothing-company-supply-chain/?amp=1 26/4/25, 1 37 PM
Page 14 of 21
:
Note in the existing model how flights from the logistics hub in Spain land at nearby
airports for stores in New York and Shanghai, then delivery trucks move garments
from those airports to the stores as shown in the screenshot above. Use this same
approach as you expand into other countries outside of Europe. Add new vehicles and
create delivery routes for them to deliver products to the new stores. This adds an
extra layer of realism and shows how dependent this supply chain is on tight
scheduling and just-in-time (JIT) delivery of products.

Adjust your supply chain model to support these new stores and still run
for 15+ days. Once you get it running for 15+ days, then make adjustments to your
model to lower transportation and operating costs and on-hand inventory amounts.

CREATE A FINAL PRESENTATION showing your expanded supply chain model


and describing the supply chain challenges you encountered. Explain why successful
solutions to those challenges provides such a competitive advantage for Zara.

Explain the supply chain principles and best practices you used to solve the
challenges you encountered. What were your biggest challenges and how did you
solve them?
Identify places in your expanded supply chain model (facilities, vehicles and routes)
where you used new technology such as that explained in the blog article “Five
New Supply Chain Technologies and How to Use Them“. How do these
technologies produce the performance capabilities you show in your simulation
results?
Show how a supply chain with these capabilities makes it possible for Zara to use its
fast fashion business model. If Zara competitors were to emulate Zara’s business
model, what supply chain capabilities would they need?
What can you do to lower the carbon footprint of your supply chain?
Use screenshots and data from your simulations to illustrate your report.

NOTE: This is an ADVANCED LEVEL case study – work through a beginning level
case such as Cincinnati Seasonings before attempting to work with this case.

https://www.scmglobe.com/zara-clothing-company-supply-chain/?amp=1 26/4/25, 1 37 PM
Page 15 of 21
:
Working on this case will be challenging… but the skills and insights you
develop here will be the same skills and insights you use to manage a real supply chain
like Zara’s.

FIND USEFUL IDEAS in the Online Guide to help you expand and improve your
Zara supply chain model. There is a lot going on in this case so check out these ideas:

See techniques for expanding this supply chain model in “Tips for Building
Supply Chain Models”
Reduce on-hand inventory and calculate optimum delivery amounts and schedules
in “Cutting Inventory and Operating Costs“
Make sure you are familiar with the techniques presented in “Analyzing
Simulation Data“
Consider using the S&OP process as a framework to organize your work,
S&OP is explained in a case called “Java Furniture Company” — scroll down to
the heading “Sales & Operations Planning (S&OP) is a Best Practice“
If you use same size shipping containers for all your products, the beta test reporting
template can help identify opportunities to improve performance, see “Supply
Chain Optimizing & Reporting Template“
Look through the Table of Contents of the Online Guide to find other useful
information

ZARA SUPPLY CHAIN REPORTING TEMPLATE: Import your simulation data


into this template to create 15-DAY P&L REPORTS and key performance
indicators. Download a copy of the Zara Clothing Company P&L Reporting
Template here

[If you are using SCM Globe Professional version, these reports can be generated
automatically by clicking on the “Generate P&L Report” button on the Simulate
Screen]

To share your changes and improvements to this model (json file) with other SCM

https://www.scmglobe.com/zara-clothing-company-supply-chain/?amp=1 26/4/25, 1 37 PM
Page 16 of 21
:
Globe users see “Download and Share Supply Chain Models”

SAVE BACKUP COPIES of your supply chain model from time to time as you make
changes. Click “Save” button next to your model in Account
Management screen. There is no “undo”, but if a change doesn’t work out, you
can restore from a saved copy. And sometimes supply chain model files (json files)
become damaged and they no longer work, so you want backup copies of your supply
chain to restore from when that happens.

Assumptions and Simplifications Used in this Model

Because Zara operations and financial reporting is combined with the other retail
brands owned by Inditex, specific details of the Zara business model and supply chain
can be difficult to verify. Yet the supply chain model presented here is still a useful
picture of the Zara supply chain and illustrates its operations and its capabilities (see
more about this in “Supply Chain Modeling and Simulation Logic“). This case
study and supply chain model is based on data from articles listed in the bibliography
below. The assumptions and specifications listed here are built into the model, and
you can easily change them as better data becomes available. New products,
facilities, vehicles and routes can also be added to this model to further explore how
Zara’s supply chain operates.

Zara finished goods garments are combined into two categories of products, Zara
Fashion Pack represents in-house manufactured high fashion items, Zara Basics
Pack represents basic items contract manufactured by others
Zara Fashion Pack = 100 garments; price of 5,000 euros; weight of 40 Kg; volume of
1 cubic meter;
Zara Basics Pack = 200 garments; price of 3,000 euros; weight of 60 Kg; volume of
0.5 cubic meters
The Cube employs 3,000 people at average rate of 8 euros per hour = 64 euros per
day

https://www.scmglobe.com/zara-clothing-company-supply-chain/?amp=1 26/4/25, 1 37 PM
Page 17 of 21
:
Automated warehouse in Zaragoza employs 800 people at avg of 64 euros per day
and other facility operating costs for utilities, insurance, etc. cost additional 15,000
euros daily
Raw fabric costs per case: Fabric 1 = 1 cubic meter; price of 1,000 euros; Fabric 2 =
0.5 cubic meter; price of 800 euros; Fabric 3 = 0.6 cubic meter, price of 1,200 euros
Zara factories need mix of raw fabrics to create their finished goods; see the
definition of these facilities to see individual requirements and production
The Cube has 1.6 million cubic meters of product storage space
150 million items pass through Cube annually or 411,000 per day
11 actual Zara factories are represented by 5 factories in the model
Monorail shipping containers are 50 cubic meters in volume, can carry 10,000
kilograms of weight, and travel at average speed including loading and unloading of
60 kilometers per hour
Zara stores in a single city are represented by a single store that combines the
demand of all stores in that city – not all cities are included and more cities can be
added to this model
Vehicle operating costs per km are set to be just half the normal cost for trucks and
airplanes. This more accurately models the process where Zara pays for one-way
shipping containers to move products from one facility to another without paying
the full round-trip cost (carbon per km was also adjusted to half of normal for the
same reason). This compensates for the model logic which calculates vehicle costs
based on the round trip distance instead of the one-way distance.
Full operating cost per km is used for the monorail vehicles that move products
between the Cube DC and the Zara garment factories because Zara owns those
vehicles and pays for full round-trip costs.
All specifications for Products, Facilities, Vehicles and Routes in this supply chain
model can be edited and changed if you have better data
New products, facilities, vehicles and routes can be added to this model and you
can simulate the results as you expand your model

https://www.scmglobe.com/zara-clothing-company-supply-chain/?amp=1 26/4/25, 1 37 PM
Page 18 of 21
:

You might also like