Comparison between Dell and Zara’s logistics management

The report focuses on the significance of the supply chain and logistics management of the company. It explains that how Zara uses effective and dynamic logistics management in the organization. A comparison between Dell and Zara has been explained in the report. The supply chain management helps to attain the rivalry benefits in the international market.

Zara is a Spanish fast fashion retail company who provides clothing, accessories, and apparel to the customers across the world. The organization was incorporated in 1975 by Rosalia Mera and Amancio Ortega. It is biggest apparel retailer in the world. Inditex group is a main brand of the firm. The other brands include Bershka, Massimo dutti, Pull&Bear, Oysho, Stradivarius and Zara home. It is seen that Zara manages up to 20 clothing collections a year. Zara is the subsidiary company of Inditex group which is the largest vendor firm in the world. Zara maintains a strong position in the global market. The company has women’s and men’s clothing as well as children clothing. Zara was ranked 30 on Interbrand’s list of best global brands measured in 2015. Furthermore, the firm maintains effective and unique supply chain and logistics management to deliver attractive products to the customers across the world. The firm has 2100 stores located in more than 88 countries in the world. In addition, the organization selects most expensive and best located real estate location in the world to open its flagship stores (Zara, 2016).

Dell and Zara, both are successful organizations. One is clothing and apparel retailer while other one is computer Manufacturers Corporation. Dell was a multinational computer technology corporation who manufactured, repaired, sold personal computers, network switches, cameras and computer software. The company is known for its innovative e-commerce and supply chain management which help to attain long-term goals and objectives (Christopher, 2016).

The company comprises three major players such as Dell, consumers, and suppliers. The consumers put the orders, dell procurer the suppliers and immediately deliver to the customers in the competitive market (Myerson, 2012).

Its supply chain management is quite different from Dell and other companies. Sourcing, manufacturing, merchanized, distribution to outlets and designing are the main occupation of the supply chain (Choi and Cheng, 2015).

Zara manages and operates different parts of the production of clothing and apparel. The firm is becoming successful and powerful due to its effective and dynamic brand image. Furthermore, the firm controls and focuses on the needs, requirements, and preferences of the consumers.

In contrast, horizontally integrated supply chain management system is followed by Dell whereas Zara uses a vertically integrated supply chain management. Dell is inaccessible from the manufacturing process and it appoints third-party suppliers for delivery and completed products. Dell has to communicate and coordinate a wide range of small procedures and processes, control the entire things and make essential changes which are important. Thus, both the companies are respective and growing (Blanchard, 2010).

Vertically integrated supply chain is used by Zara to maintain control over a large number of suppliers. Demand and requirements of the customers are easily met and producing and manufacturing are easily achieved (Chu, 2016). On the other hand, Dell manages supply chain effectively and delivers approx 85% of their products and services. Though they have several suppliers and speed is the major issue for the company to their products and services of customers. In addition, risks are also associated such as insecurity, uncertainty, shortage of goods and delay in services. Delay in delivery is the primary concern for the firm. There are approx 95% of suppliers are situated close to the manufacturing units.

Dell’s supply chain

Make to order policy and approach is followed by Dell. This strategy helps to fulfill the needs, requirements, and desires of the customers. Core competencies, information technology such as the internet, social media and value chain also helps to make production process successful and powerful. The firm designs the products which are easily adopted and modified.

On the other hand, Zara introduces new products such as clothing, apparel, and accessories very quickly. They analyze and evaluate the tastes and preferences of the customers in the competitive market. The company also follows lower quantity strategy to increase the number of customers in the international market. Zara does advertise and promoted their products and services because they want to create a good brand image in the market. The main target of the company is products and consumers choices, expectations and desires of their products. The company changes clothing in twice a week to introduce new and stylish products in the market. Zara focuses on the demand and requirements of the customers in the different region to introduce clothing, apparel, and clothing to the customers. Such a production philosophy helps to serve the consumers preferences and tastes (Tokatli, 2014).

Zara maintains a large number of storehouses to store and manage their apparel, and garments effectively and efficiently. On the contrary, the inventory cost of dell is low and the company does not invest money in warehouses (García-Álvarez, 2015). Instead of 10 days, they have 7 hours of inventory. Furthermore, direct delivery cost, warehouse, and supplier storage cost are used by the firm to attain the goals and objectives.

Dell uses indirect distribution channels such as assimilator, retailer, distributors, suppliers, and customers. B2B model is followed by the company to increase the number of customers in the market. Dell also sells its products through online channels. It helps to connect with customers clients directly in the competitive market.

Zara does not store the inventory in warehouses and they distribute the apparel and clothing at the stores on regular basis. For the inventories, distribution is carried out to the Australian border and logistics management carrier takes them in stores. The stores of the company are based on the consumer’s orders and sales. If the consumers do not like the products then the firm stops the production of apparel, clothing, and accessories. In this way, the firm eliminates the unnecessary stock of unsold products and services (W?odzimierz, 2012).

New designers and fashionable garments are updated by Zara on weekly basis. The managers of the company place via the internet and sell the products in the market. As a result, the firm has been able to keep all the information of the products (Gamboa and Gonçalves, 2014). Furthermore, effective communication and collaboration are maintained by Zara team with customers to increase the sale of the products. In contrast, communication is the biggest weakness of Dell. The company only focuses the customer’s order. They do not maintain effective and dynamic communication with customers in the market.

Myer is a department store chain trading in the Australian market. Myer has made no efforts to divide their market along psychographic lines and demographic lines of consumers and their use of goods and services, whereas Zara has divided the market into lifestyle line and demographic lines. The firm is the global leader in the marketplace who is offering fashionable products to the customers in the world. Myer’s “My store” perception is confusing. It does not have a specific target and it has an only common target market. Zara target group includes young boys and girls who are between 20-25 years old. Myer maintains a position in the market as a departmental store with a large collection of goods but it does not provide satisfactory products to the customers. Discounting sales strategies are used by Myer to attract and invite more customers in the market. Instead, Zara is motivated on introducing seasonal stylish products with appropriate and appropriate consumer service.

Zara supply chain

The organizations are more monitored on strategic and planned supply chain management to improve and enhance the products and services in the competitive market. The strategic supply chain management is a primary source of competitive advantage and customer satisfaction. Furthermore, SCM model is focused on a variety of information and handling of physical products which include downstream customers and upstream suppliers to generate an effective and dynamic value in the market (Crandall, Crandall and Chen, 2014).

SCM helps to maintain a good relationship with customers and suppliers as well to deliver the products and services at low cost. By using supply chain management, the company has been able to meet the demand of customers in the world (Sparks, 2010). Maintaining logistics of physical products, information and customer value is the basic attribute of SCM. The SCM strategy helps to attain the competitive advantages in the market. Furthermore, this strategy is linked to the hierarchy of the firm. The approach of logistics and supply chain management must concentrate on processes, functions, and actions of supply chain administration and management goals and objectives (Orcao and Pérez, 2014).

Just in time policy is also used by the firm to minimize and reduce the inventory cost and to increase the production of the firm. It also helps to eliminate the defective products from the stocks.  This process is used by many firms to increase the revenue and profit of the firm and to gain competitive advantages in the global market. Zara has reached its high point by adopting this policy and technology in the organization. It also provides satisfaction to the customers across the world. Market winners and successful companies use this technology to create a brand image in the market. Furthermore, Zara uses just in time policy to attain success and growth and to stand out against the competitors in the world. It also helps to meet long-term mission and vision of the firm (Viardot, 2013).

Zara got maximum score in the stock market index in order to determine the social responsible investment. Zara’s new products enlargement, growth, and innovation are recognized worldwide and it also used leadership styles in the organization. Supply chain management is the primary strength of Zara.  Innovation, persistent improvement, and teamwork all factors contribute of a learning organization. Customer oriented approach is used by Zara to provide satisfaction and morale to the customers across the world (West, Ford and Ibrahim, 2015). This approach is subjective to establishing Zara and differentiating the company between retailer and manufacturer, receptive attitude and represents an exposed. Learning, alliance, partnership, participative and individual learning are the characteristics of Zara. The core competencies and learning are the sources of competitive benefits. Value chain analysis envisioned the core values and competence of Zara (Madadipouya, 2015).

There are various reasons because of those the company has been able to stay in the global market. Furthermore, the firm uses effective and dynamic technologies and policies to attain the long-term mission and vision (He, 2012). The company completes production in given time period thus; it is one of the significant competitive advantages of the firm. Speedy production and short lead time is another competitive advantage of the firm. In addition, the firm focuses on customer-oriented approach to deliver the high and best quality of products to the customers across the world (Sheehan and Stabell, 2010).

Difference between Zara and Dell

The corporate and business strategies of Zara are quite different from the Myer and Dell. Moreover, the supply chain and logistics management of the company is also different from another one. Zara uses customer oriented approach and effective technologies to gain success and growth in the marketplace. In contrast between Dell and Zara, it has been measured that Dell is occupied in the manufacture of computer products. It also hires suppliers from the third party to deliver the products and services to the consumers in the international market. On the other hand, the services of Myer are not good and unique. Zara introduces to new and innovative products to increase the number of customers in the global market. The other companies can use strategies and policies of Zara because it is a dynamic and learning organization (Gorrepati, 2016).

Collaboration and improvement are main aspects of learning organization which help to attract more customers in the market. Brand value and financial position is a significant strength of Zara. In addition, value chain analysis is a core competency of Zara which helps to build and develop a good image in the market (Cowe, 2011).

Conclusion

On the above aforesaid information, it has been concluded that supply chain management plays a vital and integral role in every organization. Zara maintains effective logistics management to increase number of customers. The customer’s centric services, customized technology, logistics supply chain management, vertical integration are the key success factors of the firm. Along with this, Zara uses effective and dynamic technologies to increase and enhance the revenue and profit of the firm. In addition, Zara is considered learning and unique organization because it uses attractive and effective supply chain management. It also maintains a control over the logistics management to provide garments and accessories to the customers in the world. This control also helps to identify and evaluate the preferences, choices, and tastes of the customers in the competitive market. By using effective supply chain and logistics management, the firm has been able to make a strong position in the world. On the other hand, a comparison between Dell and Zara has been shown in the report. It also helps to reach its target market across the world.

Although Zara is powerful in its supply chain and logistics but still it needs to focus the supply chain and logistics management. Moreover, it should focus on the production of new products and services. Along with this, Zara does not use online channels and advertisement strategies. Now it is recommended that Zara should focus on the advertisement and promotional strategies to promote the products and services in the competitive market. The firm should use online selling to increase and enhance the sale of the stylish and fashionable products and services.

References 

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