BBA311 SUPPLY CHAIN MANAGEMENT Case Study

BBA311 SUPPLY CHAIN MANAGEMENT Case Study

BBA311 SUPPLY CHAIN MANAGEMENT Case Study Task brief & rubrics
Task
Students are required to develop an individual report addressing the specific tasks set out in the guideline below.
Task briefing:
CASE STUDY CONCEPT: Zara’s Unique Business Model is Driven by Its Supply Chain Capabilities.
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 company and its supply chain is a huge, highly automated distribution center (DC) called “The Cube”.
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.
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 shortterm 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 create a sense of urgency to buy because items often sell out quickly. And
that particular item or style 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.
Manufacturing and Supply Chain Operations Make Zara Unique in Its Industry
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 are mostly by truck.
Zara can deliver garments to stores worldwide in just a few days: China – 48 hrs; 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.
An Agile Supply Chain
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.
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 customer demand and making adjustments to manufacturing and supply chain operations.
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.
CREATE A FINAL REPORT showing Zara’s 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 to solve the challenges that Zara encountered. What were the biggest challenges and how did Zare
solve them?
• Identify places in Zara’s supply chain model (facilities, vehicles and routes) where they used new technologies. How do these technologies produce the
performance capabilities that Zara shows in their 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 Zara do to lower the carbon footprint of the supply chain and being more sustainable?
• Use data to illustrate your report.
Formalities:
• Wordcount: 2500-3000 words
• Cover, Table of Contents, References and Appendix are excluded of the total wordcount.
• Font: Arial 12,5 pts.
• Text alignment: Justified.
• The in-text References and the Bibliography have to be in Harvard’s citation style.
Submission:
Week 3 – Via Moodle (Turnitin).
Deadline: 17th October 2021 at 23:59 CEST.
Weight: This task is a 30% of your total grade for this subject.
It assesses the following learning outcomes:
• Outcome 1: Assess the impact of supply chain management decisions on a particular company and its internal processes, customer services and profit
optimization.
• Outcome 2: Appraise the important role of logistics and supply chains in 21st century organizations.
Rubrics:
Exceptional 90-100 Good 80-89 Fair 70-79 Marginal fail 60-69
Knowledge &
Understanding
(20%)
Student demonstrates
excellent understanding of
key concepts and uses
vocabulary in an entirely
appropriate manner.
Student demonstrates
good understanding of the
task and mentions some
relevant concepts and
demonstrates use of the
relevant vocabulary.
Student understands the
task and provides minimum
theory and/or some use of
vocabulary.
Student understands the task
and attempts to answer the
question but does not
mention key concepts or uses
minimum amount of relevant
vocabulary.
Application (30%) Student applies fully
relevant knowledge from
the topics delivered in
class.
Student applies mostly
relevant knowledge from
the topics delivered in
class.
Student applies some
relevant knowledge from
the topics delivered in
class. Misunderstanding
may be evident.
Student applies little relevant
knowledge from the topics
delivered in class.
Misunderstands are evident.
Critical Thinking
(30%)
Student critically assesses
in excellent ways, drawing
outstanding conclusions
from relevant authors.
Student critically assesses
in good ways, drawing
conclusions from relevant
authors and references.
Student provides some
insights but stays on the
surface of the topic.
References may not be
relevant.
Student makes little or none
critical thinking insights, does
not quote appropriate
authors, and does not
provide valid sources.
Communication
(20%)
Student communicates
their ideas extremely
clearly and concisely,
respecting word count,
grammar and spellcheck
Student communicates
their ideas clearly and
concisely, respecting word
count, grammar and
spellcheck
Student communicates
their ideas with some
clarity and concision. It
may be slightly over or
under the wordcount limit.
Some misspelling errors
may be evident.
Student communicates their
ideas in a somewhat unclear
and unconcise way. Does not
reach or does exceed
wordcount excessively and
misspelling