Classic / green supply chain, Mohamed Ogbi, Schoeller Industries, Supply Chain Management, Zara / June 4, 2018
A Comparison Of Zara Supply Chain Management vs Schoeller Industries
The system of activities that take place within the time when products are produced up to when they are delivered to the market for sale is referred to as supply chain (Li 2009, p. 13). The system in this case comprises of people, information, activities, resources, organizations and other elements involved in the preparation of the products.
A Comparison Of Zara Supply Chain Management vs Schoeller Industries
Introduction
A number of business activities occur before products can be delivered to the market for sale and later consumption. The system of activities that take place within the time when products are produced up to when they are delivered to the market for sale is referred to as supply chain (Li 2009, p. 13). The system in this case comprises of people, information, activities, resources, organizations and other elements involved in the preparation of the products. Supply chain systems are known for transforming natural resources into more useful products for sale.
Various organizations are known for using various supply chain models for their conveniences. In this case, organizations may decide to use particular models for the preparation of goods for sale. The choice of supply chain model comes with a number of considerations. They range from the cost of the activities, policies regarding the use of certain channels, line of products, distribution and procurement costs, among many others (Li 2009, p. 17). Thus, the correct choice of a supply chain model is dependent of a particular organization’s considerations
Executive Summary
Zara organization is an all-gender fashion chain store that was established by a Spanish based group in 1975 (Devangshu 2002, p. 3). Apart from the business being a chain store, it is also a fashion label business. The organization has been ranked among the best three retailers in the world. This case is accredited to the tripling of its profits, as well as stores within the last twenty years. The company conducts most of its operations in Europe, as opposed to its main competitors who opt to conduct their operations in America and Asia, among other places.
Through the choice of an effective supply chain model can also be associated with the success of the company. The supply chain of the company has been divided into four major components: sales and feedback, purchase and production, distribution, product organization and design (Edmund, Markus & Michael 2001, p. 824).
Schoeller Industries is a company group that has connections to the Schoeller companies based in Munich. The group of companies specializes in a number of activities and operations, which include intellectual property, supply chain management and the use of renewable energy and recycling in order to conserve the environment (Schoeller Industries 2013, May 16). The company’s main focus in its operations is sustainability and environmental conservation through the recycling of its products.
The development of the company can be linked to the traditional Gebruder and Alexander Schoeller & Co of 1880 (Schoeller Industries 2013, May 16). The company group has been structured into various entities in its operations. The various companies operate independently, but have similarities in their supply chains. The company is also linked with following certain guiding principles. For instance, they are linked with the provision of support to its customers through reliability and innovation. The company also combines economical and ecological improvements that are aimed at enhancing environmental conservation and sustainability (Schoeller Industries 2013, May 16).
This case study will take the responsibility of comparing then supply chains of these two companies. In the process, this paper will compare the way the two companies have integrated the use of green supply chain in their preparation or goods for sale. In the determination of the impacts of the various strategies used in the supply chain, the atudy will evaluate the profit margins attained soon after the companies made use of the supply chain model in discussion.
Methodology
This section will discuss the methods used to collect data regarding the supply chain models used in the two companies. In an attempt to find the required information, this study prefered to seek information from the companies’ websites. In this case, it would be important to evaluate and compare the strategies used to produce their respective products, and delivery methods. Other operations including sales and marketing strategies, product purchase and organization, among many others will also be used as the basis for the comparison. In the comparison, it would be also important to consider the fact that one of the companies uses green supply chain strategies. This supply chain model, as its name suggests, is aimed at maintaining the green coloring of the environment (Schoeller Industries 2013, May 16). The idea in the supply chain is that there is the need to integrate better and more efficient production methods and other product preparation strategies that have an overall impact of conserving the environment. For instance, the choice to recycle most of the products by Schoeller Industries is an attempt to sustain the environment.
Findings
The findings of the report portray a number of similarities and differences between the supply chains of the two independent companies. This section will show the findings of the comparison.
Product organization and design
It is evident that Zara company has to organize its products to the level that is accepted by the customers. The products produced by the company have limitations to the high-end product brands. As indicated by Zhang 2008 “the fundamental obligation of ZARA’s fashioners is not for item advancement, however, for redesigning design components of the existed items on their motivation, exchanging them into new sorts of items. They work to translate the design as opposed to making style” he says.
The examples are gathered from different sources, in the same way as pret-a-watchmen, haut couture Dutta, 2002, shaped by society, for instance, what is going on in the city, in clubs, way of life hotspots and design “blaze focuses”, and not from an inclined board or a pattern forecast organization 12 months in development of an offering season Barnes and Greenwood, 2006. The implication of this choice of product organization is the fact that fashion trends change with time and setting. For this case, various fashion trends are observed in various places. The organization has a task of finding out the most adorable fashion trends in various settings before it can produce them.
The main point where Zara’s is strongly focus is in its fabrics. Fabrics are regarded as crude materials and, thus, need to be available before the season begins because of long lead times. At any rate, there is still productivity connected in this methodology. The fabrics are requested uncolored and this gives adaptability to change the shade relying upon the patterns. As Tiplady 2006 specifies: greater part of stock is held as “work-in-methodology” anticipating setup directions.
On the other hand, Schoeller Industries extensively uses the green supply chain management model for its product organization. In this context, the companies choose to integrate the vision of sustaining the environment by recycling most of its products. The companies make use of the waste products available in the market to produce other beneficial ones. As it is known to many people, disposing off waste products to the society has a high negative impacts to the etnvironment.
For this case, Schoeller Industries makes use of the available waste products. Or instance, the companies , through their material handling operations, are in a better position to make new product handling materials such as crates and plastic bags (Schoeller Industries 2013, May 16). The Schoeller Renewables is also kown for making use of environmentally friendly sources of energy such as solar and water. The companies’ direct investment operations are also linked to the extension of the product organization methods that are all aimed at improving the sustainability of the environment. Al the designs fit the companies’ visions, which revolve round the sustainability of the environment.
Procurement in the two companies
In Zara supply chain, supplies, maybe as crude materials, parts, saves, gear, administrations what’s more consumables. The acquisition of these is either purchasing or renting them. Procurement associates with each and every unit in the association, going from advertising and deals to designing, outline and assembling, accordingly is to essential for the association. Procurement in the organization is vital for different reasons. The first importance is material exchange. The worldwide markets and lithe supply can give different materials quickly on diverse costs (Qinghua 2008, p. 3). This case influences straightforwardly the last item, making it more aggressive, conceivable less expensive and all the more engaging the clients.
Another importance of this form of procurement to the company is client request. Lately there is a development in organizations item-blend, while shortening items’ life cycle. A decent sample is Zara outlines, they deliver little amounts, furthermore, wide mixed bag, that way upgrading the shop standpoint consistently and eliminating advancements and limitations (Qinghua 2008, p. 4).
Schoeller Industries also has a form of procurement that is aimed at attaining the best in its profits and the attainance of the company’s visions and goals. The procurement process used by this company is based on the need to have a sustainable environment. The acquirement environmentally friendly sources of energy is one example of a green supply chain procurement operation (Schoeller Industries 2013, May 16). The companies extensively make use of renewable sources of energy so as to cut down unnecessary costs of production. The recycling of less useful products such as crates and paper bags also forms he basis of another form of procurement. As opposed to Zara, this company group prefare to cut down the costs of production by using the simplest means of procurement, which range from recycling of waste products and the use of renewable sources of energy such as water.
Production
Zara’s Supplies Chain Operations “SCO” deals with three viewpoints: augment asset utilized, minimize stock and lead times. Those three directly influence evaluating, client fulfillment, furthermore general business qualities like benefit, turnover, deals, and so forth. Liz & Gaynor 2006 contends that creation part in Zara ought to be kept as little as could be expected under the circumstances, leaving the additional limit in the items which are for the most part required in the assembling. He contends that huge requests will bring about stock increment. Then again Tiplady 2006 highlight the raising issue that with the expanded number of Zara stores as far and wide as possible, lead times can’t be kept so short. The two variables in an item assembling are: many-sided quality and vulnerability. Contingent upon those two, items fall into four classes demonstrated beneath Bititci, 2010.
On the other hand, Schoeller Industries conducts its production operations based on the green supply chain. The implication in this case is that the companies have a responsibility of conserving the environment, even soon after their production operations. From the wide range of products that the companies deal with, all of them are produced by environmentally friendly raw materials (Schoeller Industries 2013, May 16). Moreover, the products belong to various industries, which include food, cosmetic, beverage, fibre and automotives, among many others.
Besides the production of these products, the companies also deal with the production of packaging materials such as crates and polythene bags that aim at reducing environmental degradation through recycling. The production of the companies is mainly focused on high quality products, modern and environmentally friendly methods of production, as well as customer demand satisfaction. Clients highly appreciate the fact that the companies play critical role in the conservation of the environment through its efforts to make use of renewable resources.
Sales and Feedback from clients
An early and steady correspondence in the middle of client and supplier can guarantee a finer Supply Chain Management. An alternate guideline is if client treats their suppliers well, illuminate them, being included with their procedure is likely that less issues araise and generally is a certification for a long-term organization. These actualities are well known by Zara and utilized as a part of its day by day operations.
Zara’s originators collect information on deals and stock from each of its stores regularly and utilize this to illuminate their perspective of the circumstances. This methodology is named Shared Situation Awareness by Sull and Turnocni. It comprises of three steps: watch the crude information, understanding crude information and testing theories (Damien Et. Al 2001, p. 14). The sales and feedback strategies used by Zara company are all aimed at obtaining the best and most effective pieces of information regarding what the customers want. Considering the fact that the company mainly deals with fashion designed clothings, it is the responsibility of the sales and marketing department to seek enouh information from the public regarding the best fashion brands. It is prudent that fashion brands are dictated by the consumers. Thus, it is important for Zara fashion design company to respond to the feedback that they receive from their customers and the public in general regarding their products.
Schoeller Industries, as well make use of the feedback from their customers. Considering the fact that the industry focuses on a wide range of products, it is prudent that it reacts to the feedback that customers provide (Schoeller Industries 2013, May 16). The only way to receive the feedback is through engaging the customers in making suggestions to the company. For instance, customers may engage themselves in the company by advising to make use of the locally produced raw materials. Through this method, the company is in a better position to meet its target of enhancing the sustainability of the environment, as well as the conservation of the surrounding.
Analysis
From the findings of the comparison, it is evident that the two companies have certain differences in their supply chains. Zara supply chain mainly focuses on the need to reduce costs, but gain more in the profits. The company does not necessarily focus on the use of renewable sources of energy for its production. However, the company has expectations in the use of fabric as its main raw materials.
Considering the fact that the company deals with fashion design, there is the need to search the best quality of fabric, which is used as the main raw material. The procurement process of the company also seems to be much important. For instance, it allows to exchange materials with suppliers and consumers. Such a supply chain management operation is crucial towards the establishment of healthy relations with the stakeholders involved.
The use of sales and feedback information obtained from the company’s wide market is important to the business. For example, customers may advise the company to introduce a particular line of fashion design. Such feedback may be important towards the success of the business. Therefore, the inclusion of sales and feedback information from the customers by the business in its supply chain is one important aspect. The assembled crude information is investigated in Zara’s headquarter, where outline group, quick prototyping group, market pros and purchasers sit together in hard coupled groups. The exchanges are placed in three corridors with open designs: one for man, lady and youngsters garments. Taking into account criticism new outlines are made, prototyped and appraised by the group (Qinghua 2008, p. 13). Later sent to store to test if clients will purchase them.
So as to test if a thing matches with the general accumulation, as far as materials, colors, fabrics, and so on.
An analysis of Schoeller Industries’ chain supply system would prove that the company integrates the use of green supply chain strategy. For this reason, almost each of its operations are based on the need to conserve the green nature of the environment. For instance the use of renewable sources of energy such as solar power and water is clear indication that the company is not ready to pollute the environment (Schoeller Industries 2013, May 16). Moreover, the need to produce storage and handling materials like crates and polythene bags by the company is a critical move towards the achievement of the goals of green supply chain management.
Conclusion
In summary, a number of business operations happen before items can be transported to the business available to be purchased and later utilization. The framework of this situation contains individuals, data, operations, assets, associations and different components included in the readiness of the items. Production network frameworks are known for changing common assets into more valuable items available to be purchased. It is, therefore, the role of the business organizations to make a choice of the best supply chain models and strategies for the purpose of meeting their business goals and objectives. For the two companies discussed in this paper, it is evident that Zara business decided to use a supply chain model that aims at enhancing its profitability, irrespective of the impacts to the environment (Li 2009, p. 26). Schoeller Industries, on the other hand, operates its supply chain with the environmental conservation framework, a case that s commonly referred to as green supply chain.
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