Supply chain Theory of Zara fashion retail shop Essay

Supply chain Theory of Zara fashion retail shop - Essay Example As regards its overall operations, production in a global apparel chain is claimed to be highly fragmented, as large-cross border flows of apparel is used to ensure cheap labor and inputs (Ghemawat & Nueno, 2006). In this regard, about 30% of global apparel production is concentrated in developing countries. Proximity is therefore taken into consideration when determining the firm’s production hubs in order to reduce shipping costs and lags. Playing a crucial role in managing steady production are trading companies that orchestrate the physical flows of apparel from factories in exporting countries to retailers in importing countries. Aside from this, the increasing number of retailers (primarily in the U.S. and E.U.) has increased the demand for cheaper labor in these developing countries. It has also promoted a system called quick response (QR) which is targeted to â€Å"improving coordination between retailing and manufacturing as it helps retailers reduce forecast errors and inventory risks by planning assortments closer to the selling season, probing the market, placing smaller initial orders and reordering more frequently† (Ghemawat & Nueno, 2006, p. 2). II. ... hat merchandise is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize system-wide costs while satisfying service level requirements† (Rogers, 2001, p. 1). Another definition describes supply chain management as the working together of â€Å"inter-connected participating companies that add value to a stream of transformed inputs from their source of origin to the end products or services that are demanded by the designated end-consumers† (Lu, 2011). Some significant conceptual implications can be drawn from these two related definitions. For one, supply chain management takes into consideration every activity that has an impact on production cost and consumer’s product acceptability: from procurement of raw materials to its distribution and sales models. Secondly, supply chain management is aimed at making internal activities efficient and cost-effective (while being able to deliver its intended val ue to the customers). Lastly, the integrative approach to handling supply chain entails the combination of strategic, tactical, and operational decision-making. In this light, it can be said that the emergence of supply chain management has been brought about by industrial trends and socio-political happenings. As opined by Croxton et. al. (2001) â€Å"streamlining cross-company processes is the next great frontier for reducing costs, enhancing quality, and speeding operations. It is where this decade’s productivity wars will be fought. The victors will be those companies that are able to take a new approach to business, working closely with partners to design and manage processes that extend across traditional corporate boundaries. They will be the ones that make the leap from efficiency to super