Executive Summary:
This content of this presentation consists of analysis of the International fashion retail brand. This paper mainly focuses on the operational strategy technologies which are being adopted by fashion retail brand which makes them stay far ahead from competitors. The study was carried out on supply chain management and logistics management strategies of fashion retail brand. How could they meet the challenges and market demands parallel to capturing new markets like opening one stare every day across the globe on an average and around 500 stores in a year. The corporate governance policy, the technology, the manufacturing, Research and development concepts which are contributing to their business growth. How they are striving to make their product to be proffered by customers. The Standard operating procedures, the product positioning, Innovation, Quality, pricing, the work scheduling, new trends, the people and the processes were analyzed to understand the success stories and challenges and the gaps. There were few gaps which were Identified and the recommendations were given in technical aspects analysis.
The fashion retail brand is an flagship brand of Inditex incorporated in 1975 in Spain. The fashion retail brand is has its presence in 88 countries with 6500 Stores. The fashion retail brand is growing in such a phase of opening one store every day and an average of 500 stores in a year. The main business objective of fashion retail brand is “ Link customer demand to Manufacturing and link Manufacturing to Distribution. The Main range of fashion retail brand are Men’s, Women’s and Kid’s fashions.
The fashion retail brand has got its Global Head Quarters at Arteixo which is beside La Coruna the same is the head Quarters for fashion retail brand Home which are two brands out of eight Inditex brands. Apart from these fashion retail brand has Head quarters based on states and countries. The fashion retail brand has got Manufacturing setup here and half of their production is being done here. Apart from fashion retail brand has got own manufacturing in Portugal, Moracco and turkey. The fashion retail brand has also out sourced productions at China, Bangladesh, Vietnam, Brazil etc and there are few manufacturing units which are outsources with in the limits of the corporate offices. The turn around time for product to reach from manufacturing to retail is two to three weeks.
The core Team of fashion retail brand consists of Designers, Sourcing Specialists and the Product Development Specialists. The major designs will be released twice in a year by names Fall/Winter and Spring/Summer. Dozens of designs will be created every day and hardly the finest one third will go for production. The turn around time for availability of approved design in store is 15 days. Right from Idea, design, approval, manufacturing and the making the product available at store is 15 days and this is the key for fashion retail brand to make their product ahead and away from competition and competitors. The sourcing specialists across the locations source for best vendor to manufacture and make product available at stores with in TAT.
The other major aspect of fashion retail brand in its product promotion is participation in fashion weeks and events conducted in Paris, Spain, New York, London and Milan. Apart from these TV Ads, Online Marketing, Digital Marketing, university campaigns etc are other promotional activities which are being done by fashion retail brand . In all these the linking of product design to store is the point to be noted. The new product which is developed will be made available at high end and high revenue stores as sample sale and based on the product movement the bulk production will flow and the product will be made available across all stores. The reason behind 1% failure rate compared to 10% failure rate of competitors at fashion retail brand is the trail basis production and sale. The Data from Store Manger, the Data from soft ware etc will be thoroughly analyzed on repeated order patterns, stock dumping, fast moving and slow moving etc is helping fashion retail brand to focus and control the flow. There is a separate team working on this.
The Quality of the product which is keeping fashion retail brand ahead from competitors and the key contributor in this is fabric. More than half of the fabric is being purchased form their purchase offices situated at Barcelona and Hongkong. Recently they have started procuring material from other locations like china etc as well. The major production will be happening at Global Head Quarters and they have tie up with 450 work shops which consists of Man power ranging from 20 – 100 employees in Galicia and Portugal and the cloths will be sent to them for sewing and cutting for final finishing and from them they will come to Main unit again from here the labeling and packing will be done and through trucks etc the products will be sent to their retails across the globe.
The fashion retail brand products will be delivered in less than three weeks where as compared to other competitors who are taking 3 months for design and another three months for manufacturing. The manufacturing of fashion retail brand is highly automated and they are following Just in Time and six Sigma strategies. There is Turn around Time and dead lines even for out sourced vendors as they have more than 200 vendors. The fashion retail brand is mainly focusing on eco friendly manufacturing, the toxic free production is their objective and it will save environment. From 2012 the fashion retail brand has taken oath to produce complete non toxic products and it is following the same not only fashion retail brand it has mandated to their out sourced manufacturers to follow the same.
The fashion retail brand has its own centralized distribution channel. The fashion retail brand has 400000 Square Meters facility at Arteixo and smaller facilities in Mexico, Brazil and Argentina. The Arteixo operates in two shifts and all merchandises happens from the central ware house. The facility has got mobile tracking system, automated machines, Bar coded charts which are capable enough to handle 45000 folded garments in an hour. The distribution is being made as per the orders received and they do will analyze the past sales and the demand and then they will decide on lots and the models which need to be distributed to the respective store. The turn around time for delivering the product at stores is 24 – 36 hours for the stores located in European continent and 24 – 48 hours for the stores which are located outside European continent. 75% of the deliveries will be done by their own trucks and vehicles and the 25% of deliveries will be done by the courier companies like KLM and DHL etc.
The organizational structures and the levels and verticals are framed in very professional manner. All the middle level and top level have a common objective which is vision and strategy of fashion retail brand . The Decision making authority, decentralization of power and decision is making fashion retail brand to have Innovation in their every step.
International Scenario: fashion retail brand feels it is viable to export products to its newly operating countries rather than having manufacturing setup at initial stages. They have an option of alternate channel of marketing/sale like franchisee model. They are open to have a strategic tie up with national level brands when they are entering into new markets and new countries.