SupplyChain and Competitive Advantage
SupplyChain and Competitive Advantage
Exampleof SCM’s role from the cases
SupplyChain Management (SCM) denotes the combination of tactics orstrategies utilized to assimilate efficiently providers,manufacturers, warehouse, and stores. The principal role of SCM inthe retail industry is to ensure active management of production anddistribution activities to optimize customer value and realize asustainable competitive advantage (Chow et al., 2008). For instanceat Zara, a fast SCM is the main strategy the industry utilizes toattract customers, offer them what they want and keep them comingback (Tiplady,2006).SCM guarantees that businesses develop and manage supply channels inthe most effectual and effective ways possible. At Zara, SCM hascreated efficiency through the adoption of fast-fashion strategy. AtZara Company, an item can move from the drawing board onto storeshelves of a store within a period of two weeks, and once it is outof stock, a new, fresh design replaces it. Contrary to Zara`sstrategy, the Limited focuses on the integrated brand deliverysystem, which allows it to integrate all the supply chain partners torealize the maximum value for the brand.
Anothersignificant role of SCM in the retail industry is to ensure efficientflow of information between all supply chain partners. Chowet al. (2008) contend that uninterrupted information flow ensuresthat all the partners involved in the supply chain synchronize theirlong-term plans and manage the everyday flow of goods and equipmentup and down the supply chain. For instance, the Limited has adoptednew technologies to ensure efficient information sharing among allits supply chain partners.
Alignmentof Zara’s competitive approach to SCM strategy
Zara’sstrategy is to attract and retain customers by providing new styleseach week (Tiplady,2006). The company says that it can move an item from the productionhouse to a store within a span of two weeks. The fast movement of newdesigns allows the company to introduce first-hand products everyweek thus, clienteles return frequently to see and buy the newestfashions and styles. By cultivating such an approach, the companydoes not only attract customers but ensures it retains them. In thisregards, it is quite clear that the company’s approach has asignificant alignment to SCM plan.
Onthe other hand, the company has a fast SCM approach. The company’sSCM focuses on the shortest response time to ensure an item takes theshortest time possible to get from the production house to the retailstore. According to Barnes and Lea-Greenwood (2006), afast-fashioning supply chain allows a company to know what theconsumers desire in fashion products. Of greater importance is thatZara’s fast supply chain allows the company to display the desiredproducts in the retail stores within the shortest time possible.Since Zara’s competitive strategy is to attract and retaincustomers, its SCM is properly aligned since it allows the companymeet ever-changing customer preferences and attain satisfaction.
Therole and improvement of Zara’s supply channel
Otherthan thefastmovement of new, fresh designs from manufacturers to retailers,Zara`s SCM ensures flexibility and efficient communication to attainefficiency and profitability (Chow et al., 2008). The SCM based onfast fashioning ensures that the company remains at the top of themarket by offering to consumers what they need. According to Chow andothers, fast fashioning is based on the principle that people’stastes regarding fashion and style are ever changing. Consequently,Zara’s supply channel plays a significant role in ensuring thecompany produces new and fresh designs that meet the consumers’changing tastes.
Zara`ssupply channel can be improved by keeping pace with the latestInformation Technology. Fashion products have high demand but at thesame time are highly unpredictable. An up-to-date IT will allow Zarato get the latest information about customer preferences and trendsregarding fashion and style. Zara should always update its IT toensure its supply chain is matched to product uncertainty. Throughthis way, the company will adopt a postponement strategy that willhelp in reducing inaccurate forecast risk and avoid losses.
Thesupply chain problems faced by The Limited
Itis clear that the Limited s facing serious supply chain problems. Theprimary factor leading to unexpected number trailers, which cannotfit into the parking lot of a distribution center, is the lack ofproper communication between the supply chain partners. The Limitedis experiencing a challenge to stay at the top of its supply anddemand chains due to complex information-technology operations.Another SCM problem facing the Limited is the encroachment of itsmarket by discount retailers. Due to all these challenges, theLimited is forced to adopt new supply chain technologies, which againwill come at a cost.
Integratedbrand delivery is an appropriate SCM strategy for the Limited. Thisis because it will help the Limited in enhancing its sales for theretail brands. According to Chow et al. (2008),an integrated brand delivery will allow greater flexibility and allowthe Limited respond quickly to changing market needs and trends. Anintegrated brand delivery system will give the company’s employeesmore time to sell by relieving them of their processing and logisticsduties. Of greater importance is that an integrated brand deliverysystem will allow the Limited`s supply chain and logistics, sustain atrade name for the maximum value.
Barnes,L., & Lea-Greenwood, G. (2006). Fast fashioning the supply chain:shaping the research agenda. Journal of Fashion Marketing andManagement: AnInternational Journal,10(3), 259-271.
Chow,W. S., Madu, C. N., Kuei, C. H., Lu, M. H., Lin, C., & Tseng, H.(2008). Supply chain management in the US and Taiwan: An empiricalstudy. Omega,36(5), 665-679.
TipladyR. (2006). Zara:Taking the Lead in Fast-Fashion.Retrieved on 6 November, 2015 from<http://www.bloomberg.com/bw/stories/2006-04-04/zara-taking-the-lead-in-fast-fashionbusinessweek-business-news-stock-market-and-financial-advice>