2/21/2005
Spanish retailer Zara has hit on a formula for supply chain success that
works. By defying conventional wisdom, Zara can design and distribute a
garment to market in just fifteen days. From Harvard Business Review.
by Kasra Ferdows, Michael A. Lewis and Jose A.D. Machuca
Editor's note: With some 650 stores in 50 countries, Spanish clothing
retailer Zara has hit on a formula for supply chain success that works by
defying conventional wisdom. This excerpt from a recent Harvard
Business Reviewprofile zeros in on how Zara's supply chain
communicates, allowing it to design, produce, and deliver a garment in
fifteen days.
In Zara stores, customers can always find new productsbut they're in
limited supply. There is a sense of tantalizing exclusivity, since only a few
items are on display even though stores are spacious (the average size is
around 1,000 square meters). 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."
Such a retail concept depends on the regular creation and rapid
replenishment of small batches of new goods. Zara's designers create
approximately 40,000 new designs annually, from which 10,000 are
selected for production. Some of them resemble the latest couture
creations. But Zara often beats the high-fashion houses to the market and
offers almost the same products, made with less expensive fabric, at
much lower prices. Since most garments come in five to six colors and five
to seven sizes, Zara's system has to deal with something in the realm of
300,000 new stock-keeping units (SKUs), on average, every year.
This "fast fashion" system depends on a constant exchange of information
throughout every part of Zara's supply chainfrom customers to store
managers, from store managers to market specialists and designers, from
designers to production staff, from buyers to subcontractors, from
warehouse managers to distributors, and so on. Most companies insert
layers of bureaucracy that can bog down communication between
departments. But Zara's organization, operational procedures,
performance measures, and even its office layouts are all designed to
make information transfer easy.
Zara's single, centralized design and production center is attached to
Inditex (Zara's parent company) headquarters in La Corua. It consists
of three spacious hallsone 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. A store may receive three different calls from La
Corua in one week from a market specialist in each channel; a factory
making shirts may deal simultaneously with two Zara managers, one for
men's shirts and another for children's shirts. Though it's more expensive
to operate three channels, the information flow for each channel is fast,
direct, and unencumbered by problems in other channelsmaking the
overall supply chain more responsive.
Zara's cadre of 200 designers sits In each hall, floor to ceiling windows
right in the midst of the
overlooking the Spanish countryside
production process.
reinforce a sense of cheery informality
and openness. Unlike companies that sequester their design staffs, Zara's
cadre of 200 designers sits right in the midst of the production process.
Split among the three lines, these mostly twentysomething designers
hired because of their enthusiasm and talent, no prima donnas allowed
work next to the market specialists and procurement and production
planners. Large circular tables play host to impromptu meetings. Racks of
the latest fashion magazines and catalogs fill the walls. A small prototype
shop has been set up in the corner of each hall, which encourages
everyone to comment on new garments as they evolve.
The physical and organizational proximity of the three groups increases
both the speed and the quality of the design process. 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. Procurement and production
planners make preliminary, but crucial, estimates of manufacturing costs
and available capacity. The cross-functional teams can examine
prototypes in the hall, choose a design, and commit resources for its
production and introduction in a few hours, if necessary.
Zara is careful about the way it deploys the latest information technology
tools to facilitate these informal exchanges. Customized handheld
computers support the connection between the retail stores and La
Corua. These PDAs augment regular (often weekly) phone
conversations between the store managers and the market specialists
just 0.3 percent of its sales on ads, far less than the 3 percent to 4 percent
its rivals spend.
Excerpted with permission from "Rapid-Fire Fulfillment," Harvard Business
Review, Vol. 82, No.11, November 2004.
[ Order the full article ]
Kasra Ferdows is the Heisley Family Professor of Global Manufacturing at
Georgetown University's McDonough School of Business in Washington
DC.
Michael A. Lewis is a professor of operations and supply management at
the University of Bath School of Management in the UK.
Jose A.D. Machuca is a professor of operations management at the
University of Seville in Spain.
For Fast Response, Have Extra Capacity on Hand
Class Overview
This class consists of a combination of instructor led discussion, practical
exercises and lectures led by fast fashion and speed sourcing experts. It
will review the best practices associated with implementing fast fashion
and speed sourcing successfully. By the end of the class all delegates will
have put together a personalised action plan for starting to implement
fast fashion and / or speed sourcing in their company, or the next steps to
making it work more effectively.
Class Objectives
Training Formats
Fast fashion
From Wikipedia, the free encyclopedia
Jump to: navigation, search
Fast fashion is a contemporary term used by fashion retailers to
acknowledge that designs move from catwalk to store in the fastest time
to capture current trends in the market.[1] This has developed from a
product driven concept based on a manufacturing model referred to as
"quick response" developed in the U.S. in the 1980s [2]and moved to a
market based model of "fast fashion" in the late 1990s and first part of the
21st century. Zarahave been at the forefront of this fashion retail
revolution and their brand has almost become synonomous with the term
but there were other retailers who worked with the concept before the
label was applied such as Benetton. [3] [4] Fast fashion has also become
associated with disposable fashion because it has delivered designer
product to a mass market at relatively low prices.[5] Fast fashion is a term
used to describe clothing collections which are based on the most recent
fashion trends presented at Fashion Week in both the spring and the
autumn of every year.[6] These trends are designed and manufactured
quickly and cheaply to allow the mainstream consumer to take advantage
Contents
1 Philosophy
o 1.1 Category Management
o
2 Marketing
3 Production
4.1 Lawsuits
5 References
6 Further reading
[edit] Philosophy
[edit] Category Management
The primary objective of the fast fashion is to quickly produce a product in
a cost efficient manner. This efficiency is achieved through the retailers
understanding of the target market's wants, which is a high fashion
looking garment at a price at the lower end of the clothing sector.
[6]
Primarily, the concept of category management has been used to align
the retail buyer and the manufacturer in a more collaborative relationship.
[8]
Category management is defined as "the strategic management of
product groups through trade partnerships, which aims to maximize sales
and profits by satisfying customer needs"..[8] This collaboration occurs as
color. The buyer must also consult with the overall design team to
understand the cohesion between trend forecasting and consumer's
wants. The close relationships result in flexibility within the company and
an accelerated response speed to the demands of the market.
[edit] Design Lawsuits and Legislation
[edit] Lawsuits
Recently "Forever 21", one of the larger fast fashion retailers has been
involved in several lawsuits over alleged violations of Intellectual
Property rights.[19] The lawsuits contend that certain pieces of
merchandise at the retailer can effectively be considered knockoffs of
designs from Diane von Furstenberg, Anna Sui and Gwen
Stefani's Harajuku Lovers line as well as many other well-known
designers.[19] Forever 21 has not commented on the state of the litigation
but initially said it was "taking steps to organize itself to prevent
intellectual property violations".[19]
[edit] Proposed Legistlation
[edit] H.R. 5055
H.R. 5055, or Design Piracy Prohibition Act, was a bill proposed to protect
the copyright of fashion designers in the United States.[20] The bill was
introduced into the United States House of Representatives on March 30,
2006. Under the bill designers would submit fashion sketches and/or
photos to the U.S. Copyright Office within three months of the products
"publication". This publication includes everything from magazine
advertisements to the garment's first public runway appearances. [21] The
bill as a result, would protect the designs for three years after the initial
publication. If infringement of copyright was to occur the infringer would
be fined $250,000, or $5 per copy, whichever is a larger lump sum.[20] The
bill was suspended after the House of Representatives session concluded
in 2006, this resulted in H.R. 5055 being cleared from the agenda.
[edit] H.R. 2033
The Design Piracy Prohibition Act was reintroduced as H.R. 2033 during
the first session of the 110th Congress on April 25, 2007.[22] It had goals
similar to H.R. 5055, as the bill proposed to protect certain types of
apparel design through copyright protection of fashion design. The bill
would grant fashion designs a three-year term of protection, based on
registration with the U.S. Copyright Office. The fines of copyright
11.
^ Hunter, N.A. . 1990. Quick Response in Apparel
Manufacturing. Manchester The Textile Institute.
12.
^ Hines,T. (2004), Supply Chain Strategies: Customer Driven
and Customer Focused, Oxford: Elsevier
13.
^ a b c d e f g h i j k Bruce, Margaret, and Lucy Daly. "Buyer
behaviour for fast fashion." Journal of Fashion Marketing and
Management 10 (2006): 329-44.
14.
^ a b c Pfeifer, Margarida O. "Fast and Furious." Latin Trade
(English) 15.9 (Sep. 2007): 14-14. Business Source Complete.
EBSCO. Mary Couts Burnett Library, Fort Worth, Texas. 13 Nov. 2008
<http://search.ebscohost.com.ezproxy.tcu.edu/login.aspx?
direct=true&db=bth&AN=26768746&site=ehost-live>.
15.
^ a b Gee, Tim. "Fast fashion." Engineer (00137758) 293.7742
(25 Feb. 2008): 16-16. Business Source Complete. EBSCO. [Mary
Couts Burnett Library, Fort Worth, Texas. 13 Nov. 2008
<http://search.ebscohost.com.ezproxy.tcu.edu/login.aspx?
direct=true&db=bth&AN=31484251&site=ehost-live>.
16.
^ Hines, Tony. 2001. "Globalization: An introduction to fashion
markets and fashion marketing." In Fashion marketing:
Contemporary issues. Eds. T. Hines and M. Bruce. Oxford:
Butterworth Heinemann, 1-24.
17.
^ Baker, Rosie. "Following fast fashion." In-Store (June 2008):
37-39. Business Source Complete. EBSCO. Mary Couts Burnett
Library, Fort Worth, Texas. 13 Nov. 2008
<http://search.ebscohost.com.ezproxy.tcu.edu/login.aspx?
direct=true&db=bth&AN=33119643&site=ehost-live>.
18.
^ Hines, T. 2010. "Trends in textile global supply chains."
Textiles 37 (2): 18-20.
19.
^ a b c Casabona, Liza. "Retailer Forever 21 Facing A Slew of
Design Lawsuits." WWD: Women's Wear Daily 194.15 (23 July 2007):
12-12. Textile Technology Index. EBSCO. Mary Couts Burnett Library,
Fort Worth, Texas. 13 Nov. 2008
<http://lib.tcu.edu.ezproxy.tcu.edu/PURL/EZproxy_link.asp?
url=http://search.ebscohost.com.ezproxy.tcu.edu/login.aspx?
direct=true&db=tdh&AN=25996233&site=ehost-live>.
20.
^ a b United States. Cong. House. Committee on the Judiciary.
109th Cong., 2nd sess. HR 5055. By Goodlatte, Delahunt, Coble and
Bruce, Margaret, and Lucy Daly. "Buyer behaviour for fast fashion."
Journal of Fashion Marketing and Management 10 (2006): 329-44.
url=http://search.ebscohost.com.ezproxy.tcu.edu/login.aspx?
direct=true&db=tdh&AN=32117993&site=ehost-live>.
Cavalli and companies including Chanel SA and PPR SA-owned Yves Saint
Laurent already offer pre-collections of apparel and accessories and
limited-edition lines, in addition to the traditional spring-summer and
autumn-winter ranges that are the focus of fashion weeks in New York,
London, Milan and Paris.
The concept of the two seasons is more and more obsolete, Peter
Farren, an analyst at Bryan Garnier & Co., said in a telephone interview.
Thats what especially Zara has brought to the scene and accustomed
the customer to. Luxury companies are responding to that.
Twice a Week
Inditex, the worlds largest clothing retailer, delivers new models to its
stores twice a week, according to its website. H&M, which sells $29.95
blazers, can design, manufacture and distribute new products in three
weeks, spokeswoman Jenni Tapper-Hoel said.
To be sure, fast-fashion retailers dont always get it right. While H&Ms
August sales rose 14 percent, the quickest pace in more than two years,
third-quarter profit missed analysts estimates after the Stockholm-based
companys efforts to increase sales weighed on margins. H&M didnt
specify where it spent more improving the customer offering. The shares
fell the most in two years on Sept. 29.
Luxury companies need to improve their logistics to react more quickly to
changes in consumption patterns, Farren said. Burberry Group Plc is now
able to replenish stock monthly and in April introduced a limited-edition
range of apparel and accessories, which went from design to store in three
months.
Season-less
The maker of $3,595 double-breasted silk lace trench coats has also
allowed customers to order items online during fashion- show webcasts
since September 2009 to enable early delivery and installed iPad tablet
computers in its stores during London Fashion Week.
Its got to be a dynamic business, Burberry CEO Angela Ahrendts said in
an interview. So keep being dynamic is going to be part of our longer
term success.
Because sales of luxury goods are rising fastest in markets like Asia and
Latin America, there has to be a large part of the line thats season-less,
she added.
Emerging market consumers may account for 60 percent of global luxury
goods sales in 2020, up from 40 percent in 2009, according to Luca Solca,