· Write a case study on supply chain network design. · In this regard you need to select a case company (e.g. Zara, H&M, IKEA, Toyota, Amazon, Apple, Samsung ……… etc.) and · identify the...

Supply Chain Design of Zara
Supply Chain Design of Zara
[Document subtitle]
Abstract
The report gives an insight on supply chain network design of Zara and helps the user to understand the strategic importance associated with it. Different types of supply chain designs are discussed which can be compared and analysis can be done about the advantages and disadvantages related to it. To understand the importance of supply chain design network example of Zara provides information about how agile supply chain network has helped them grow their business and what changes could be implemented to boost their growth even further. The various components which are part of supply chain are discusses in detail and how it has made an impact on the quick fashion business. The supply chain strategy of H&M
and is compared with Zara to understand the advantages and disadvantages of the cu
ent methodology the
and has been following.
Introduction
The rise in global competitiveness has made it clear that agile response is required to deal with the changing conditions in global marketplace. The report gives an insight of the supply chain strategy of ZARA and the methods they have adopted to make their business successful. The agile supply chain that the company has implemented and how it has given the
and the strategic importance. The company has become pioneer in fast fashion by developing new abilities every day.
Adopting agility has been enabling the companies to respond towards the unpredictable demand variations. The Agile Supply chain has been able to capture business opportunities by gathering information related to market data and also efficiently sharing between business who are part of supply chain. (Christopher, 2000).
This case study has been prepared to identify the key aspects of Agile Supply Chain in fast fashion. The case of ZARA has been taken to elaborate which has pioneered the industry in the cu
ent scenario. As a part of analysis, the company supply chain is discussed along with the structure. The impact of the strategy and results are discussed. Finally, conclusion is drawn followed by references cited in the case study.
Literature Review
Supply chain Design and its strategic importance
The increase in global competitiveness in the marketplace has saw the emergence of supply chain in past 2 decades. Supply chain design offer capabilities to the organizations by developing ties between the customers and suppliers. As a result, significant benefit can be fetched by firms in various forms like reduction in inventory size, lowering down the cost, increased response, and better focus on design, implementation and capital flow. AS per AMR which is one of the leading firms in supply chain research states that companies which follow best supply chain practices have shown better results which is 17.89% as compared to 6.43% who follow normal practices. The world top organizations have already adopted these practices to keep up with the increasing competition. (Reuters, 2008)
It is important to understand that a truly effective supply chain is possible by proper planning with a purpose. Companies following traditional practices need to
ing the transition mode by procuring, developing and configuring the supply chain resources which can help them to achieve the required competitiveness in the marketplace. Also, it should be understood that one size does not fit all suits for this concept. The changes must be made according to the firm requirement and what suits them the best. In many cases demand driven supply chain followed by Toyota and Walmart might not suit for companies which work best in supply driven environments. (Apte, Aruna, 2009)
Different types of supply chain design
Supply chain design can be categorized into many types but they can grouped into following categories explained further:
Just in time supply chain: These supply chains are focuses on waste reduction and removing redundant inventory by ensuring to deliver products only when the organization needs them. The method was developed by Toyota Motor Company which has been widely accepted by major organizations in the world. This method helps in various ways by improving productivity and enhance control between the stages of production, improving the inventory turnover rate, lowering the distribution cost, improving the quality of supplier products etc. (Kannan and Tan, 2005)
Risks Associated: The implementation involves high level of skilled resources and technology for smooth operations. For companies lacking infrastructure to adopt this can face poor results even post implementation phase. Sharing of information might be required which is confidential for the organization. This might put the organization at risk. For those firms which are implementing the traditional supply chain model will have to bear high initial cost for conversion. This
ings financial risk for the organization which is planning to implement the system. (Sell,1999)
Flexible Supply Chain: Adopting Supply chain which has flexibility to adopt with the changing customer demands and lower lead times. This type of supply chain is recommended for organizations which has large portfolio of products. For the vast range of products that company produces share similar characteristics and can be manufactured in same production line by slight modifications. Mass customization is a requirement for this case. Sports
ands or personal computer companies are one of the example of companies which generally adopt this kind of methodology. The flexibility of supply chain of handling large volume of production helps in achieving firms competitiveness as the process can be done in cost effective method even for lower volumes. One of the vital points that need to be taken care for operating this is managing cost within the supply chain and optimize the fixed and variable components. Apparels companies also prefer this method as they provide them freedom to produce wide range of products in efficient manner. Customer demand can be fulfilled with customized orders or make on order basis. Better adaptation of consumer demand pattern helps in better responsiveness and prediction. In case of high demand, the supply chain can handle peak load movement without much difficulties. (Stevenson and Spring, 2007)
Associated Risk: To cater large demand high inventory cost can become a burden for the company which
ings risk related to store extra inventory. It is important that this is controlled carefully by firms in order to avoid wastage of inventory. To handle orders in peak demand, there might be possibility of outsourcing some of the activities such as logistics, manufacturing etc. This
ings risk of degrading the quality of products due to involvement of third party resources. Business risk always increases with the involvement of third party players. (Sa
i and Beamon, 2000)
Risk Adverse Supply Chain: This kind of supply chain is generally adopted in case of high uncertainty of both demand and supply of raw material. The aspects of supply chain can be combined with other supply chain strategies when the business is facing uncertainty with the suppliers and logistic networks. The risk adverse supply chain can be generally be seen by organizations doing business in areas which have poor infrastructure or have instable external environment. High inventory level and work in progress are some of the characteristics of this methodology. It is prefe
ed where demand is stable but there are certain production and supply side risk attached to this. Due to this, achieving full capacity utilization is tough to reach due to inefficiencies. This type of methodology can be found in oil/petrochemical industries.
Risk associated: Due to large volume of inventory level, inventory holding risk increases. Involves large capital requirement due to larger inventory holding cost
ing in the financial...