Supply Chain Management Assignment Sample
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Supply chain management is considered a process of managing flow or movement of goods and services from manufacturer to the customer. Supply chain management process includes all the activities that transform 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 is providing brief analysis of supply chain management process and strategies that are used by Zara Sociedad Anonima. It is a retail sector organization and it was established by Amancio Ortega and Rosalia Mera in year 1975 in Spain. Currently, Zara Sa is operating over 2270 locations around the globe. This study is analysing importance of information and material flow in the supply chain management process. Scope of the supply chain management process also will be analysed in report. Role of supply chain management process to achieve competitive advantage in market place also will be discussed in report. In the study, impact of supplier to buyer relationship, business-to-business relationship and business to customer relationship has been analysed for the business operations of company. Role of distribution system that is used by the Zara SA also will be evaluated in study. 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 organization to keep the supply chain management process effective and productive for the company. The most important thing in the supply chain management process is related to effective flow of information and goods in process. In case of Zara, transaction of material and information is more crucial to manage the supply chain process effectively. The process of distribution that is used by the Zara is much faster than other competitive organizations in the global market. Because the fashion trends in Zara are much faster than the competitors so, the organization needs to maintain effective flow of material and information in supply chain process (Koberg and Longoni, 2019). The Flow of Material and information can be explained as smooth and effective flow of goods or information from the manufacturer to the customer. This is important for the business operation of Zara and satisfaction level of customers.
Time that organization have is around 4 to 6 weeks to supply final product to the company stores. So this is most important for the organization to develop effective system to transfer information and material to the endpoint within time to keep 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 same for the transfer for material flow in company. Effective material flow is important in the organization 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 company.
Scope in Supply Chain Management in Zara
The current supply chain management system that is used by the Zara is most effective to maintain the flow of goods and services in the market. The supply chain process used by Zara is effective to maintain the balance in the supply and demand on the global level. But still, some changes can be made in the supply chain management system of Zara to develop 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 the Zara to increase the visibility of the supply chain on the global level. This can help them to 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 ability to track the position of goods and information in process.
Zara is already using automation in the supply chain management process to gain high performance in management of supply chain of the company. To improve the automation process organization can develop Artificial intelligence system with the automation technology to make the production and transfer of goods faster (Wieland, 2020). There are some changes can be implemented in the information technology department of the company to increase the effectiveness of supply chain management system. For example, Zara can use Decision Support system and management information system in the IT department of company to increase the effectiveness of information processing system and business forecasting system. Zara also can develop standardised communication protocol to develop effective communication system in organization to effectively deal with customers and suppliers to manage the supply chain process effectively.
Advantages of Supply Chain Management in Competitiveness of Zara
Supply chain management process is most important for the business of an organization. This is also important for the organization to maintain the high customer satisfaction level in the business process. Supply chain management process of Zara is highly beneficial for their business operations on global level. Some of major advantages of supply chain management process of Zara are- Supply chain management process is helping the operations and sales department of the Zara to make effective collaboration with the supplier and distributors. This is important for the business of company. Effective supply chain process provides capability to the company to effectively plan the business process (Durach, Kembro and Wieland, 2017). This capability can help the organization to maintain high-quality standards in the company products and services. Supply chain management of Zara is also providing capability to the company to manage all the business operations efficiently. Supply chain management that is used by company is also effective to maintain effective flow of products as per the business plan of company. 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 high competitive position in market place.
Supplier Buyer Relationship in Zara
Supplier buyer relationship can be explained as effectiveness of all commercial transaction between organization in purchase and supply of goods and services. A supplier-buyer relationship only can be considered an effective relationship when it develops win-win situation for both suppliers and buyer. Supplier Buyer relationship for Zara is most effective. Organization has developed 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 the Zara to develop effective and productive relationship with suppliers. The organization has developed long term strategically alliances with the supplier to create 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 order as per the requirement of the company. There are different types of fabric is used in the Zara to manufacture clothing. Supplier Buyer relationship is most effective in case of Zara because the supplier of the company can deliver raw material within 5 days of order placed in bulk quantity (Lambert and Enz, 2017). This is highly important for the business and operations of company in an effective manner. This relationship is helping the organization to maintain effective supply chain management system with competitive advantage in global market. This is how supplier and buyer relation of Zara are effective to maintain competitive position in global market. It is also helping the organization to develop effective and accurate supply chain management system in business process.
Impact of Business-to-Business Relationships on Business Operations of Zara
This is most important for the business organization to develop effective relationship with the business organization that is associated with the collaboration company. The Business to business relationship can be explained as relationship or form of transaction between business organizations. For example, wholesaler and retailer or manufacturing and wholesaler can be considered as business-to-business relationship of company. Business to business relationship also can be explained as business transactions that are conducted between two different business organizations. In the business-to-business relationship, Zara has major advantage in process because of centralised management (Suryanto, Haseeb and Hartani, 2018). All the transactions that are performed between Zara and other business organizations 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 organization to manage and track all the transactions that are completed between the business organizations. The impact of business to business relation on Zara is effective because of the effective supply chain management process of company.
Impact of Business to Customer Relationships on Business Operations of Zara
This is most important for the business organization to develop effective relationship with the customers to make them loyal to the organization. Long term relationship with customer can help the company to stay competitive and productive in market place for long term. Business customer relationship can be focused on by the business organization achieve the long-term goals of company. In case of the Zara, business to customer relationship is much effective to keep organization profitable in target market. The impact of business to customer relationship is both negative and positive for the business organization (Kache and Seuring, 2017). The impact of business to customer relationship is most important for the business organization. Success and profitability of company are directly related to the relationship between customer and business organization. All the transactions that are occurred between the business organization and customers directly. This relationship can define the performance of organization in target market. If the business to customer relationship is effective than it can help the organization to stay profitable in market place.
Zara has created long term and mutually beneficial relationship with its customers. All the operations of the organization are based on the customer information that is collected from the market place and purchase behaviour of customers. All the customer-related information is focused by the organization to design products and services to stay productive in long business run. Customer of organization is key people for company that can drive the success of company in market place. For example, demographic characteristics are considered by the company to develop positive impact on the customers. In the business to customer relationship, various factors are considered by the organization related to the behaviour of customers. As per the likes and dislikes of customer, Designers of Zara analysis and predicts the future behaviour of the customer. In this process customer, behaviour is closely analysed by the business organization to develop and design products as per the demand and customer behaviour (Saudi, Sinaga and Roespinoedji, 2018). If the customer perspective is ignored by the company then it can affect the profitability of organization in target market. This is how impact of business to customer relationship is highly important for the business organization like Zara.
Role of Distribution in Supply Chain Management of Zara
Role of distribution in supply chain management is most important. This is one of most important element of the supply chain management process. There are different actions are performed by the distribution in the supply chain management process to improve the profitability of organization and develop better relationship with the retailers. The major roles of distribution can be divided into three different types which are- Balance supply and demand, protects against uncertainty, and support the production requirement. These are major roles of distribution in the supply chain management process. Distribution is major element of the supply chain. This element is directly connected to the market place. So, it can be used by the business organization to get endpoint information about the customers and market place (Ketchen Jr and Craighead, 2020). Major roles of distribution can be explained as- Main role of the distribution in the supply chain management process to collect the information about the demand of the customers as per the current market situations. This is role of the distribution to provide information related to customer perception and demand in the market place. This information can help the organization to make effective changes in the manufacturing and production process to meet the demand in market place. If the demand for company product is law in market than company can reduce the production of goods to keep operations of company productive and avoid losses in business process. This is one of main role of the distribution to manage balance in the supply and demand of company goods in market place.
This is also one of main role of the distribution to protect the organization from uncertain condition in business organization. There are different processes and methods are used by the Zara to evaluate the forecast of future demand in market place. In uncertain market, condition distribution can help the organization to prevent error in demand forecasting, supply disruption and demand spikes. Distribution helps the organization to stay unaffected from this uncertain condition in market place. This is most important for the business organization to analyse the production required to keep organization productive and minimise different type of losses in business process. In the long production run, this is most important for the business organization like Zara to analyse the demand in the market to make effective changes in the quantity of production to keep organization productive. Distribution helps the production department to understand the demand of the customer to keep operations of organization profitable in market place.
Distribution System Used in Zara
In the supply chain management process, distribution management can be explained as process or concept to get overview of movement of products from manufacture to the point of sell. Different activities are considered in the distribution management are - packaging, inventory management, warehousing, supply chain and logistics (Nakasumi, 2017). These are major operations that are managed by the distribution in the business organization. The distribution system that is used by the Zara is centralised. In this type of distribution system, all the products and raw material are transported through a central location.
The distribution system that is used by Zara is highly effective and productive. Chances of error with this centralised distribution system are very law. All the deliveries and transportations are managed by the central location of the organization. This system of distribution can help the organization to gain higher productivity in the market place. The centralised distribution system of Zara is located in Spain and it is connected to the manufacturing and distribution process of goods from the organization. The Cube is a 464500 Square meter area that is consists of highly automated monorail that are linked to 11 factories that are in radius of 16-kilometre radius. As per the distributed system of company all, the raw material is passed through the cube to the manufacturing plan of company and ready sale product also passes through the cube in the distribution process (Tönnissen and Teuteberg, 2020). The prepared goods are shifted to the Zara Logistic Hub that is 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 centralised distribution system is used by Zara to manage the supply chain on global level.
Contribution of Supply Chain Management System, in particular, Industrial Sector
The supply chain management process is one of the most effective processes that is used by the business organization 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 customers ineffective way to keep them satisfied with the services of company. The role of supply chain management is highly important for the textile industry on global level. Customers are highly active on the social media platforms and digital platforms and they are aware of the global fashion trends. This is important for the business organizations 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 main goal of the supply chain management process in the clothing industry.
This is highly important for the business organization to ensure the delivery of goods to the customer within the time to maintain profitability in operation (Kot, 2018). If the supply chain management process of organization is not effective then it can affect the profitability of company on global level. Poor supply chain process cannot meet the demands of the customer and it can affect the sales of company in target market and goods of company also can remain unsold in company outlets. The other role of the supply chain management process is to reduce the production cost of goods in manufacturing plant of company. Using supply chain management process new machines can be introduced in the manufacturing process to increase the productivity of organization in target market. Effective supply chain management process also effective to reduce manufacturing errors in the company to reduce the operational cost of the company. It also helps the organization to increase the quality standards of products and services. Some other important roles of supply chain management in business organization are- improve the financial position of company in target market. Supply chain management process also can help the business organization to develop effective marketing strategy to improve the sales of organization on global level. This is how role of supply chain management process is highly beneficial and revolutionary for textile industry.
Ways Industry Relates to Supply Chain Management in Business
In the clothing industry role of supply chain management process is most important. This is important in fashion and clothing industry to run according to the trends on global level. any kind of error or failure can affect the profitability of organization in target market. Fashion industry is completely based on the supply chain management process. Complete industry is dependent on the global supply chain process. With effective supply chain process, fashion trends can be met globally in an effective way. Supply chain management is considered as management of flow of goods and services that includes the transportation of raw material in final product. This process also consists of streamlining of business side activities to increase the customer value and gain competitive advantage in global market. This is how the effectiveness of textile industry is based on the supply chain process.
Impact of Supply Chain Management on Industry in Business
The impact of supply chain management process is very high on the fashion industry it has changed the complete processes that were used by the business organization in traditional process. Before supply chain process, fashion trends are limited in an area or region (Sodhi and Tang, 2020). People who lives outside these limits are mostly not aware of these changes. So, without supply chain fashion industry has certain boundaries. But supply chain management process has provided new direction to the complete industry. With supply chain management process helped textile industry to expand globally. It has provided the opportunity to the complete industry to get international exposure to develop a new market on global level. This is how supply chain management has imposed some changes in the fashion retail sector on global platform.
Contribution of Supply Chain Management to the Industrial Sector in which Zara Operates
The contribution of supply chain management process is highly important for the industry in which Zara is operating. Supply chain management process has helped the complete industrial sector to grow internationally and develop new standards in the business process. It has also provided various opportunities to the small suppliers and manufacturers to get in streamline to connect to the fashion industry (Blossey, Eisenhardt and Hahn, 2019). It has provided opportunity to complete industry to improve the level of collaboration in international platform to improve productivity. Supply chain management process is also effective to improve the quality standards on global level. Supply chain management process is also effective to manage the demand and supply in the industry to keep balance in economy. Level of risk is also reduced with supply chain management process in clothing industry.
This study is providing overview of supply chain management process that is used by Zara SA I business operations. The impact of the supply chain management process has been analysed on the business outcomes of company. Scope and importance of supply chain management in achieving competitive advantage also has been discussed in report. The relationship between supplier and buyer also has been analysed in report. The impact of this relationship also has been analysed for the business operations of business organization. Importance and role of distribution system have been analysed for the performance of organization on global platform. The distribution system that is used by Zara Sa also has been evaluated in study. The relationship between the supply chain management process and industry has been evaluated in report. For the evaluation process benefits and impact of supply chain management has been analysed for the complete 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.
Nakasumi, M., 2017, July. Information sharing for supply chain management based on block chain 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 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