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ZARA – the excellent example of supply chain — May 6, 2020

ZARA – the excellent example of supply chain

About Zara

Zara became successful but accurately predicting the forecast of supply and demand which was possible by innovative use technology along with applying agile technique of operations and strategy.

Image by Free-Photos from Pixabay

The basic was providing PDA’s for not only transaction of customer purchases but for generation of ideas of new fashion creation the business model has its agents whenever and wherever get inspired they quickly share fashion sketches to main head office and the approved new items will be available in the stores by six weeks. (Hugo, 2020). Due to this concept Zara is the only fashion retail to have a new fashion design range of clothing every two weeks on average, the result is 11,000 distinct items are produced over a year. This is all possible due to highly sophisticated distribution system of Zara called Cube, in 2019 Zara was ranked 46th most valuable brand.

The manufacturing is not done based on cost instead it is preferred based on market demand. The shortest throughput ratio of manufacturing creates various verities of unique products and usually the new styles are sold out in stores also this creates trendy and each time customer visits the store they find new verities and purchases immediately due to products sold out in the future.

Challenges

Zara have outsourced manufacturers in China, Bangladesh, European countries and other regions, to maintain high quality each batch of products produced is compulsorily shipped back to Spain main headquarters for final design adjustments and packaging then again packages are shipped and distributed all over the globe. However Zara can expand its design centric appealing to more regional areas like China where another global cube can be created. This will reduce the cost however the coordination can be complex and just in time manufacturing may fail. So the challenge for Zara is to keep up the fast fashion trend with high cost.

Today due to Covid-19 the model of Zara is effected and cannot meet the high demand, in 39 countries Zara has closed over 3,785 stores globally. The sale is dropped 24 percent in first two weeks of March 2020. (Chapman, 2020)

Climate activists

Climate activists are fighting against through away fashion trend by Zara and this is the core strategy of business model perfected over decades.

Climate activists criticizes the culture of throwaway to save planet as the fashion industry consumption is lot of energy and water.

The demand and pressure to have sustainable clothing, the idea to have recycle large quantities of clothes to be recycled however the high quality and fast fashion demand is still new along with recycled clothing range. (Müller, 2020)

The good thing is parent company Inditex is among few top players investing in recycling technology.

Rent the clothes

New trend to have fast fashion without throw away is possible renting clothes on subscription business model which already exists in US. (Müller, 2020)

References

Chapman, B. (2020, March 18). Coronavirus: Zara owner Inditex shuts 3,785 stores globally as sales plunge. Retrieved from Independent: https://www.independent.co.uk/news/business/news/coronavirus-zara-shut-stores-covid-19-sales-fall-inditex-a9408841.html

Hugo. (2020, January). Zara’s Unique Business Model is Driven by Its Supply Chain Capabilities. Retrieved from SCM Globe: https://www.scmglobe.com/zara-clothing-company-supply-chain/

Müller, S. (2020, January 27). Zara’s fast-fashion problem in focus. Retrieved from DW: https://www.dw.com/en/zaras-fast-fashion-problem-in-focus/a-52161858

DESIGN THINKING — April 21, 2020

DESIGN THINKING

Design Thinking: SIMPLICITY IS NOWADAYS A KEY COMPETITIVE ADVANTAGE

The set of processes by engaging in exploring new creative of delivering or creating products and services which adds up value to customer experience. (Razzouk & Shute, 2012)

Image by OpenClipart-Vectors from Pixabay

To deal with real-world problems it’s important to have skills in design thinking to provide a more practical, realistic and cost-effective approach.

The foundation of design encourages to be more with reasoning activity. As it is a more iterative and interactive process of solving problems which is only possible to keep activities and systems simple.

Simplicity

“Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.” – Steve Jobs.

Design is more human-centric, the success of design thinking is first thinking about the delivery of products or services to humans and as per current or future new experience. (Rousi, 2018)

Always the design to be successful is by keeping the system simple, the live example is Apple and Google made their company successful by keeping simple design for users.

Keeping simple reduces the reduction in the process so it is a competitive advantage to have good design thinking.

The best example can be seen by the research conducted by London design council to study leading brand design departments such as Microsoft by making the computer easy to use by anyone by keeping it simple for a human to understand and operate a computer. (A study of the design process, 2007)

adding value to customers

In this digitization era the customer experience (CX) is everything front focus for every organization which eventually adds up the value. The simple tweet can tarnish the organization image if gets viral because customer demands convenience to be instance and to have all their issues once recorded not be repeated. The customer is very well aware, expects requests to be fulfilled instantly and customer agents must know the problem well informed.

Simplicity factors to add value to customers

All this with the overall best operations management system in place is only possible by keeping simple products and services, if the ease of use is adopted then future needs can be known and hence adds value to customers. (Ghanem, 2019)

Example of product which added value to me as customer

The value-added to the customer can be judged by the customer’s journey with products. Microsoft is a successful company today and started with the launch of the Windows operating system which became first as a software company, the products were a success due to ease to use the computer even by common man, the total 35 years of journey. The Operating system changed and enhanced customer experience even by adding futuristic content like Holo Lens. (Gibbs, 2014)

Since the school days I started using the product in year 1995, and the fact is still I am using as of today in year 2020 which includes this work itself.

The reason is simple, the operating system is simple whenever there are major changes when customer complains the changes are considered and new experience is delivered.

Conclusion

The key future of adding customer value is all depends on design thinking of simple products and services easy to use.

References

A study of the design process. (2007). Retrieved from Design Council UK: https://www.designcouncil.org.uk/sites/default/files/asset/document/ElevenLessons_Design_Council%20(2).pdf

Ghanem, G. (2019). Simplify Customer Experience. Retrieved from Avaya: https://www.avaya.com/blogs/archives/2019/07/five-factors-to-simplify-customer-experience/

Gibbs, S. (2014, October 2). From Windows 1 to Windows 10: 29 years of Windows evolution. Retrieved from The Guardian: https://www.theguardian.com/technology/2014/oct/02/from-windows-1-to-windows-10-29-years-of-windows-evolution

Razzouk, R., & Shute, V. (2012). What Is Design Thinking and Why Is It Important? Review of Educational Research, 330-348.

Rousi, R. (2018). Simplicity and the art of something more. http://www.humantechnology.jyu.fi, 67-95.