SCM300 / SCM 300 Exam 2: (Latest
Update ) Global Supply
Operations | Questions & Answers |
Grade A | 100% Correct - ASU
Question:
Zara's Supply Chain
Answer:
The company can design, produce, and deliver a new garment and put it on
display in its stores worldwide in a mere 15 days.
Question:
Zara's Margins
Answer:
Because Zara can offer a large variety of the latest designs quickly and in
limited quantities, it collects 85% of the full ticket price on its retail clothing,
while the industry average is 60% to 70%. As a result, it achieves a higher net
margin on sales than its competitors; in 2001, for example, when Inditex's net
margin was 10.5%, Benetton's was only 7%, H&M's was 9.5%, and Gap's was
near zero.
,Question:
Zara's Supply Chain Strategy
Answer:
• Close the communication loop
• Stick to a rhythm across the entire chain
• Leverage you capital assets to increase supple chain flexibility
Question:
Zara Close the Loop
Answer:
• Small Batches of new goods
• Few Items on display
• A customer thinks, "This green shirt fits me, and there is one on the rack. If I
don't buy it now, I'll lose my chance."
Question:
Inditex headquarters in La Coruña consists of three spacious halls
Answer:
one for women's clothing lines, one for men's, and one for children's. Unlike
most companies, which try to excise redundant labor to cut costs, Zara makes
a point of running three parallel, but operationally distinct, product families.
Accordingly, separate design, sales, and procurement and production-
planning staffs are dedicated to each clothing line.
,Question:
Zara Market Price Points
Answer:
Designers can quickly and informally check initial sketches with colleagues.
Market specialists, who are in constant touch with store managers (and many
of whom have been store managers themselves), provide quick feedback
about the look of the new designs (style, color, fabric, and so on) and suggest
possible market price points.
Question:
Zara avoids overproduction by
Answer:
In an industry that traditionally allows retailers to change a maximum of 20%
of their orders once the season has started, Zara lets them adjust 40% to 50%.
In this way, Zara avoids costly overproduction and the subsequent sales and
discounting prevalent in the industry.
Question:
Zara's out of stock idea
Answer:
Empty racks at Zara don't drive customers to other stores. Being out of stock
in one item helps sell another.
, Question:
Zara's shipments
Answer:
A central warehouse in La Coruña prepares the shipments for every store,
usually overnight. Once loaded onto a truck, the boxes and racks are either
rushed to a nearby airport or routed directly to the European stores. All trucks
and connecting airfreights run on established schedules—like a bus service—
to match the retailers' twice-weekly orders. Shipments reach most European
stores in 24 hours, U.S. stores in 48 hours, and Japanese shops in 72 hours, so
store managers know exactly when the shipments will come in.
Question:
Zara Leverage you Assets
Answer:
In a volatile market where product life cycles are short, it's better to own fewer
assets—thus goes the conventional wisdom shared by many senior managers,
stock analysts, and management gurus. Zara subverts this logic. It produces
roughly half of its products in its own factories. It buys 40% of its fabric from
another Inditex firm, Comditel (accounting for almost 90% of Comditel's
total sales), and it purchases its dyestuff from yet another Inditex company.
Update ) Global Supply
Operations | Questions & Answers |
Grade A | 100% Correct - ASU
Question:
Zara's Supply Chain
Answer:
The company can design, produce, and deliver a new garment and put it on
display in its stores worldwide in a mere 15 days.
Question:
Zara's Margins
Answer:
Because Zara can offer a large variety of the latest designs quickly and in
limited quantities, it collects 85% of the full ticket price on its retail clothing,
while the industry average is 60% to 70%. As a result, it achieves a higher net
margin on sales than its competitors; in 2001, for example, when Inditex's net
margin was 10.5%, Benetton's was only 7%, H&M's was 9.5%, and Gap's was
near zero.
,Question:
Zara's Supply Chain Strategy
Answer:
• Close the communication loop
• Stick to a rhythm across the entire chain
• Leverage you capital assets to increase supple chain flexibility
Question:
Zara Close the Loop
Answer:
• Small Batches of new goods
• Few Items on display
• A customer thinks, "This green shirt fits me, and there is one on the rack. If I
don't buy it now, I'll lose my chance."
Question:
Inditex headquarters in La Coruña consists of three spacious halls
Answer:
one for women's clothing lines, one for men's, and one for children's. Unlike
most companies, which try to excise redundant labor to cut costs, Zara makes
a point of running three parallel, but operationally distinct, product families.
Accordingly, separate design, sales, and procurement and production-
planning staffs are dedicated to each clothing line.
,Question:
Zara Market Price Points
Answer:
Designers can quickly and informally check initial sketches with colleagues.
Market specialists, who are in constant touch with store managers (and many
of whom have been store managers themselves), provide quick feedback
about the look of the new designs (style, color, fabric, and so on) and suggest
possible market price points.
Question:
Zara avoids overproduction by
Answer:
In an industry that traditionally allows retailers to change a maximum of 20%
of their orders once the season has started, Zara lets them adjust 40% to 50%.
In this way, Zara avoids costly overproduction and the subsequent sales and
discounting prevalent in the industry.
Question:
Zara's out of stock idea
Answer:
Empty racks at Zara don't drive customers to other stores. Being out of stock
in one item helps sell another.
, Question:
Zara's shipments
Answer:
A central warehouse in La Coruña prepares the shipments for every store,
usually overnight. Once loaded onto a truck, the boxes and racks are either
rushed to a nearby airport or routed directly to the European stores. All trucks
and connecting airfreights run on established schedules—like a bus service—
to match the retailers' twice-weekly orders. Shipments reach most European
stores in 24 hours, U.S. stores in 48 hours, and Japanese shops in 72 hours, so
store managers know exactly when the shipments will come in.
Question:
Zara Leverage you Assets
Answer:
In a volatile market where product life cycles are short, it's better to own fewer
assets—thus goes the conventional wisdom shared by many senior managers,
stock analysts, and management gurus. Zara subverts this logic. It produces
roughly half of its products in its own factories. It buys 40% of its fabric from
another Inditex firm, Comditel (accounting for almost 90% of Comditel's
total sales), and it purchases its dyestuff from yet another Inditex company.
