Introduction Of Supply Chain Management Assignment Sample
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Supply chain management manages the flow or movement of goods and services from the manufacturer to the customer. ----Supply chain management process includes all the activities that transform the material into the ready to sale product. This process also ensured the effective delivery of goods and services to the customer (Kshetri, 2018). This report provides a brief analysis of the supply chain management process and strategies used by Zara Sociedad Anonima. It is a retail sector organisation, and Amancio Ortega and Rosalia Mera established it in 1975 in Spain. Currently, Zara Sa is operating in over 2270 locations around the globe. This study analyses the importance of information and material flow in the supply chain management process. The scope of the supply chain management process also will be analysed in the report. The role of the supply chain management process to achieve competitive advantage in market place also will be discussed in the report. In the study, the impact of the supplier to buyer relationship, business-to-business relationship, and business to customer relationship has been analysed for the company's business operations. The role of the distribution system that the Zara SA uses also will be evaluated in the study. The complete relationship between industry and supply chain management also will be studied in the report.
Material and Information Flow Necessary in Supply chain Management of Zara
In the supply chain management process, different considerations are made by the organisation to keep the supply chain management process effective and productive for the company. The most important thing in the supply chain management process is the effective flow of information and goods. In the case of Zara, the transaction of material and information is more crucial to manage the supply chain process effectively. This is because the process of distribution used by Zara is much faster than other competitive organisations in the global market. Because the fashion trends in Zara are much faster than the competitors so, the organisation needs to maintain an effective flow of material and information in the supply chain process (Koberg and Longoni, 2019). The Flow of Material and information can be explained as the smooth and effective flow of goods or information from the manufacturer to the customer. This is important for the business operation of Zara and the satisfaction level of customers.
The organisations have around 4 to 6 weeks to supply the final product to the company stores. So this is most important for the organisation to develop an effective system to transfer information and material to the endpoint within time to keep the business productive and free from errors. Information transfer in Zara is more important because of chub within time. Changes implemented by Zara are more frequent as compared to the competitors. So, this is important for the company to the customer to make the product available in the company stores within time without any delay. This is the same for the transfer for material flow in the company. Effective material flow is important in the organisation to meet deadlines and deliver final products to the distribution hub and customers. This is important for the effectiveness of the supply chain management process of the company.
Scope in Supply Chain Management in Zara
Zara's current supply chain management system is most effective in maintaining the flow of goods and services. The supply chain process used by Zara is effective to maintain the balance in the supply and demand on the global level. However still, some changes can be made in the supply chain management system of Zara to develop a better system to improve the effectiveness of the supply chain management system. The most appropriate changes that can be applied in the supply chain management system of Zara are- This important for Zara to increase the visibility of the supply chain on the global level. This can help them manage and track their consignments within time with high accuracy. For this process, Zara can implement blockchain and Artificial intelligence in the supply chain process to develop the ability to track the position of goods and information in the process.
Zara is already using automation in the supply chain management process to gain high performance in managing the company's supply chain. To improve the automation process, an organisation can develop an Artificial intelligence system with automation technology to make the production and transfer of goods faster (Wieland, 2020). In addition, some changes can be implemented in the company's information technology department to increase the effectiveness of the supply chain management system. For example, Zara can use a Decision Support system and management information system in the I.T. department of the company to increase the effectiveness of the information processing system and business forecasting system. Zara also can develop a standardised communication protocol to develop an effective communication system in the organisation to effectively deal with customers and suppliers to manage the supply chain process effectively.
Advantages of Supply Chain Management in Competitiveness of Zara
The supply chain management process is most important for an organisation's business. This is also important for the organisation to maintain a high customer satisfaction level in the business process. The supply chain management process of Zara is highly beneficial for their business operations on a global level. Some of the major advantages of the supply chain management process of Zara are that- Supply chain management process helps the operations and sales department of Zara to make effective collaboration with the supplier and distributors. This is important for the business of the company. Effective supply chain process provides the capability to the company to effectively plan the business process (Durach, Kembro and Wieland, 2017). This capability can help the organisation to maintain high-quality standards in the company products and services. The Supply chain management of Zara also provides the capability to the company to manage all the business operations efficiently. Supply chain management used by the company is also effective to maintain an effective flow of products as per the company's business plan. The supply chain management process of Zara is also effective for the company to meet all the market demands within the time. This is how supply chain management is highly beneficial for Zara. Supply chain management is also effective for the company to retain a highly competitive position.
Supplier Buyer Relationship in Zara
Supplier buyer relationship can be explained as the effectiveness of all commercial transactions between an organisation to purchase and supply goods and services. A supplier-buyer relationship only can be considered an effective relationship when it develops a win-win situation for both suppliers and buyers. Supplier Buyer relationship for Zara is most effective. The organisation has developed an effective system to maintain the transaction of goods and services as per the requirement. In the supply chain management process, an effective system is used by Zara to develop effective and productive relationships with suppliers. The organisation has developed long-term strategic alliances with the supplier to create a long-term win-win situation for both parties in the business transactions.
In the supplier-buyer relationship, management and leaders of Zara have developed a supply chain management system with the suppliers in which suppliers are provided with bulk orders as per the company's requirements. There are different types of fabric used in Zara to manufacture clothing. The supplier Buyer relationship is most effective in the case of Zara because the supplier of the company can deliver raw material within five days of order placed in bulk quantity (Lambert and Enz, 2017). This is highly important for the business and operations of the company in an effective manner. This relationship is helping the organisation to maintain an effective supply chain management system with a competitive advantage in the global market. This is how the supplier and buyer relation of Zara are effective to maintain a competitive position in the global market. It is also helping the organisation to develop an effective and accurate supply chain management system in the business process.
Impact of Business-to-Business Relationships on Business Operations of Zara
This is most important for the business organisation to develop an effective relationship with the business organisation associated with the collaboration company. The business-to-business relationship can be explained as a relationship or transaction between business organisations. For example, wholesalers and retailers or manufacturing and wholesalers can be considered the company's business-to-business relationship. Business to business relationships can also be explained as transactions between two different business organisations. Zara has a major advantage in the process in the business-to-business relationship because of centralised management (Suryanto, Haseeb and Hartani, 2018). All the transactions performed between Zara and other business organisations are conducted effectively. Due to the centralised supply chain management process, the decision making of Zara is most effective. The centralised supply chain management system is effective for the organisation to manage and track all the transactions that are completed between the business organisations. Therefore, the impact of business to business relations on Zara is effective because of the company's effective supply chain management process.
Impact of Business to Customer Relationships on Business Operations of Zara
This is most important for the business organisation to develop an effective relationship with the customers to make them loyal to the organisation. Long term relationships with customers can help the company stay competitive and productive in the marketplace for the long term. The business organisation can focus on business customer relationships to achieve the company's long-term goals. In case of the Zara, business to customer relationship is much effective to keep the organisation profitable in the target market. Business to customer relationships is negative and positive for the business organisation (Kache and Seuring, 2017). The impact of business to customer relationships is most important for the business organisation. The success and profitability of a company are directly related to the relationship between customers and business organisations. All the transactions that are occurred between the business organisation and customers directly. This relationship can define the performance of the organisation in the target market. If the business to customer relationship is effective, it can help the organisation stay profitable in the marketplace.
Zara has created long term and mutually beneficial relationships with its customers. All the organisation's operations are based on the customer information collected from the marketplace and customers' purchase behaviour. The organisation focuses all the customer-related information to design products and services to stay productive in the long business run. The organisation's customer is key people for a company that can drive the company's success in the marketplace. For example, demographic characteristics are considered by the company to develop a positive impact on the customers. In the business to customer relationship, various factors are considered by the organisation related to customers' behaviour. As per the likes and dislikes of the customer, Designers of Zara analyse and predict the customer's future behaviour. In this process, customer behaviour is closely analysed by the business organisation to develop and design products according to demand and customer behaviour (Saudi, Sinaga and Roespinoedji, 2018). If the company ignores the customer perspective, it can affect the organisation's profitability in the target market. This is how the impact of business to customer relationships is highly important for a business organisation like Zara.
Role of Distribution in Supply Chain Management of Zara
The role of distribution in supply chain management is most important. This is one of the most important supply chain management process elements. There are different actions performed by the distribution in the supply chain management process to improve the organisation's profitability and develop a better relationship with the retailers. The major roles of distribution can be divided into three different types: balance supply and demand, protect against uncertainty and support the production requirement. These are major roles of distribution in the supply chain management process. Distribution is a major element of the supply chain. This element is directly connected to the marketplace. So, it can be used by the business organisation to get endpoint information about the customers and marketplace (Ketchen Jr and Craighead, 2020). Major roles of distribution can be explained as the main role of the distribution in the supply chain management process to collect the information about the customers' demand as per the current market situations. This is the role of the distribution to provide information related to customer perception and demand in the marketplace. This information can help the organisation make effective changes in the manufacturing and production process to meet the demand in the marketplace. For example, suppose the demand for company products is law in the market. In that case, the company can reduce the production of goods to keep the company's operations productive and avoid losses in the business process. This is one of the main roles of the distribution to manage the balance in the supply and demand of company goods in the marketplace.
This is also one of the main roles of the distribution to protect the organisation from the uncertain condition in a business organisation. There are different processes and methods are used by Zara to evaluate the forecast of future demand in the marketplace. In an uncertain market, condition distribution can help the organisation prevent errors in demand forecasting, supply disruption and demand spikes. Distribution helps the organisation stay unaffected from this uncertain condition in the marketplace. This is most important for the business organisation to analyse the production required to keep the organisation productive and minimise different types of losses in the business process. In the long production run, this is most important for a business organisation like Zara to analyse the demand in the market to make effective changes in the quantity of production to keep the organisation productive. Distribution helps the production department understand the customer's demand to keep operations of the organisation profitable in the marketplace.
Distribution System Used in Zara
In the supply chain management process, distribution management can be explained as a process or concept to get an overview of the movement of products from manufacture to the point of sale. Different activities are considered in the distribution management are - packaging, inventory management, warehousing, supply chain and logistics (Nakasumi, 2017). These are major operations managed by the distribution in the business organisation. The distribution system that Zara uses is centralised. In this distribution system, all the products and raw materials are transported through a central location.
The distribution system that Zara uses is highly effective and productive. Chances of error with this centralised distribution system are very low. The central location of the organisation manages all the deliveries and transportations. This distribution system can help the organisation gain higher productivity in the marketplace. The centralised distribution system of Zara is located in Spain, and it is connected to the manufacturing and distribution process of goods from the organisation. The cube is a 464500 Square meter area consisting of the highly automated monorail linked to 11 factories in a radius of 16-kilometre radius. As per the distributed system of the company all, the raw material is passed through the cube to the company's manufacturing plant, and ready sale product also passes through the cube in the distribution process (Tönnissen and Teuteberg, 2020). Then, the prepared goods are shifted to the Zara Logistic Hub located in Zaragosa for further processing and transportation of goods. Most of the transportation of goods is performed by trucks and by air transportation. This is how Zara uses a centralised distribution system to manage the supply chain on a global level.
Contribution of Supply Chain Management System, in particular, Industrial Sector.
The supply chain management process is one of the most effective processes used by the business organisation to manage the supply of goods services to the customers in an effective way. The main objective of the supply chain management is to ensure the delivery of goods and services to the customer's ineffective way to keep them satisfied with the company's services. The role of supply chain management is highly important for the textile industry on a global level. Customers are highly active on social media platforms and digital platforms, and they are aware of the global fashion trends. This is important for the business organisations in the textile industry to manage the supply chain process effectively to meet the customer demands effectively. The main role of supply chain management in the textile industry are- Increase customer services. This is the main goal of the supply chain management process in the clothing industry.
This is highly important for the business organisation to ensure the delivery of goods to the customer to maintain profitability in operation (Kot, 2018). If the supply chain management process of an organisation is not effective, then it can affect the company's profitability globally. Poor supply chain processes cannot meet the customer's demands, and it can affect the sales of the company in the target market, and goods of the company can also remain unsold in company outlets. The other role of the supply chain management process is to reduce the production cost of goods in the company's manufacturing plant. Using the supply chain management process, new machines can be introduced in the manufacturing process to increase the organisation's productivity in the target market. An effective supply chain management process is also effective in reducing manufacturing errors in the company to reduce the company's operational cost. It also helps the organisation increase the quality standards of products and services. Some other important roles of supply chain management in a business organisation are improving the company's financial position in the target market. The supply chain management process can also help the business organisation develop an effective marketing strategy to improve the organisation's sales on a global level. This is how the role of the supply chain management process is highly beneficial and revolutionary for the textile industry.
Ways Industry Relates to Supply Chain Management in Business
In the clothing industry, the supply chain management process is most important. This is important in the fashion and clothing industry to run according to the trends on a global level. Any error or failure can affect the organisation's profitability in the target market. The fashion industry is completely based on the supply chain management process. The entire industry is dependent on the global supply chain process. With an effective supply chain process, fashion trends can be met globally effectively. Supply chain management is considered the management of the flow of goods and services that includes the transportation of raw materials in the final product. This process also involves streamlining business activities to increase customer value and gain a competitive advantage in the global market. This is how the effectiveness of the textile industry is based on the supply chain process.
Impact of Supply Chain Management on Industry in Business
The impact of the supply chain management process is very high on the fashion industry. It has changed the complete processes used by the business organisation in the traditional process. Before the supply chain process, fashion trends were limited in an area or region (Sodhi and Tang, 2020). People who live outside these limits are mostly not aware of these changes. So, without a supply chain fashion industry has certain boundaries. However, the supply chain management process has provided a new direction to the entire industry. With supply chain management process helped the textile industry to expand globally. It has provided the opportunity to the entire industry to get international exposure to develop a new market on a global level. This is how supply chain management has imposed changes in the fashion retail sector on a global platform.
Contribution of Supply Chain Management to the Industrial Sector in which Zara Operates
The contribution of the supply chain management process is highly important for the industry in which Zara is operating. The supply chain management process has helped the entire industrial sector grow internationally and develop new standards in the business process. It has also provided various opportunities for small suppliers and manufacturers to streamline to connect to the fashion industry (Blossey, Eisenhardt and Hahn, 2019). It has provided an opportunity to complete industry to improve collaboration in international platforms to improve productivity. The supply chain management process is also effective in improving the quality standards globally. The supply chain management process is also effective in managing the industry's demand and supply to keep balance in the economy. The level of risk is also reduced with the supply chain management process in the clothing industry.
This study provides an overview of the supply chain management process used by Zara SA I business operations. The impact of the supply chain management process has been analysed on the company's business outcomes. The scope and importance of supply chain management in achieving competitive advantage also has been discussed in the report. The relationship between supplier and buyer also has been analysed in the report. The impact of this relationship also has been analysed for the business operations of business organisations. The importance and role of the distribution system have been analysed for the organisation's performance on a global platform. The distribution system used by Zara Sa has also been evaluated in the study. The relationship between the supply chain management process and industry has been evaluated in the report. The evaluation process benefits and impact of supply chain management have been analysed for the whole industry.
Books and Journals
Blossey, G., Eisenhardt, J. and Hahn, G., 2019, January. Blockchain technology in supply chain management: An application perspective. In Proceedings of the 52nd Hawaii International Conference on System Sciences.
Durach, C.F., Kembro, J. and Wieland, A., 2017. A new paradigm for systematic literature reviews in supply chain management. Journal of Supply Chain Management. 53(4). pp.67-85.
Kache, F. and Seuring, S., 2017. Challenges and opportunities of digital information at the intersection of Big Data Analytics and supply chain management. International Journal of Operations & Production Management.
Ketchen Jr, D.J. and Craighead, C.W., 2020. Research at the intersection of entrepreneurship, supply chain management, and strategic management: Opportunities highlighted by COVID-19. Journal of Management. 46(8). pp.1330-1341.
Koberg, E. and Longoni, A., 2019. A systematic review of sustainable supply chain management in global supply chains. Journal of cleaner production. 207. pp.1084-1098.
Kot, S., 2018. Sustainable supply chain management in small and medium enterprises. Sustainability. 10(4). p.1143.
Kshetri, N., 2018. 1 Blockchain's roles in meeting key supply chain management objectives. International Journal of Information Management. 39. pp.80-89.
Lambert, D.M. and Enz, M.G., 2017. Issues in supply chain management: Progress and potential. Industrial Marketing Management. 62. pp.1-16.
Nakatomi, M., 2017, July. Information sharing for supply chain management based on blockchain technology. In 2017 IEEE 19th conference on business informatics (CBI) (Vol. 1, pp. 140-149). IEEE.
Saudi, M.H.M., Sinaga, H.O. and Roespinoedji, D.S., 2018. The role of tax education in supply chain management is a case of Indonesian supply chain companies. Polish Journal of Management Studies. 18.
Sodhi, M.S. and Tang, C.S., 2020. Supply Chain Management for Extreme Conditions: Research Opportunities. Journal of Supply Chain Management.
Suryanto, T., Haseeb, M. and Hartani, N.H., 2018. The correlates of developing green supply chain management practices: Firms level analysis in Malaysia. International Journal of Supply Chain Management. 7(5). p.316.
Tönnissen, S. and Teuteberg, F., 2020. Analysing the impact of blockchain technology for operations and supply chain management: An explanatory model drawn from multiple case studies. International Journal of Information Management. 52. p.101953.
Wieland, A., 2020. Dancing the supply chain: Toward transformative supply chain manage