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Supplier Management » Zara – a Masterclass in Supplier Relationships and Supply Chain Management

Zara – a Masterclass in Supplier Relationships and Supply Chain Management

di Vishal Patel

Zara has not been immune to the effects of Covid-19 but the company has said that it’s flexible business model and approach to supplier relationships have been pivotal in helping it to navigate the pandemic.  Although Zara is not a customer of Ivalua, we have many customers who operate in ways which have meant they have been able to continue to operate during this period with little disruption.

How agile Supply Chain Management & Supplier Relationships drive a sustainable competitive advantage 

As companies work to build supply chain resilience and agility in their supply chains in light of the Covid-19 pandemic as well as growing pressure to improve sustainability, some lessons can be learned by taking a look back. On September 7th 2016, a relatively unknown person became the richest man on the planet during two days before Bill Gates reclaimed his title (recently overtaken by Jeff Bezos). The man is called Amancio Ortega, and journalists were surprised to find out he is the founder of the retail store Zara.  

What is striking in Zara’s success is that the brand keeps defying the rules and conventions of the fashion industry. They do not give many interviews and do not invest much money in advertising or public relations. It also has always taken a non-traditional approach to supplier relationships and  supplier collaboration, which offers good lessons for today’s supply chain leaders.

Zara & fast-fashion

Zara’s success is driven in no small measure on a very rapid time-to-market, truly “Fast-fashion”. Fast-fashion is the process of bringing new trends to the market as quickly and cheaply as possible.  While Zara is also an outlier in many other domains, it is really its agile Supply Chain  that enabled it to become one of the most profitable fashion brands in the world and sustain rapid growth year after year. More significantly, Zara’s approach to establishing an agile Supply Chain is quite interesting. 

Zara’s Supply Chain Approach

The key to Zara’s ability to establish an agile Supply Chain rests on the following unique approaches:

Zara’s approach is certainly untraditional and has served it well. Supply Chain leaders should assess whether specific aspects are as suitable to their business as to Zara.  With the growing pressure for more agile, stable and sustainable Supply Chains, Zara certainly offers interesting lessons to consider.  How organizations work with their supply chain and manage supplier relationships is going to be key to getting businesses back to growth in the post-pandemic world.

If you would like to know more about how Ivalua is working with Global Retailers like Zara, please contact us

Vishal Patel

VP Product Marketing

Vishal has spent the last 1​5​ years in various roles within the Procurement and Supply Chain technology market.  As an industry analyst, he researched and advised organizations in various industries​ on best ​and innovative practices, digitization and optimization.  He brings a thorough understanding of market trends and digital​ technologies that can help enterprises be more effective ​with their Procurement and Supply Chain strategies.  He works to ensure that ​organizations are empowered with technology platforms that enable flexibility, innovation, and agility. ​

You can connect with Vishal on Linkedin

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