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Sourcing Journal / May 10, 2016

Op-Ed: To Optimize Lead Times, Take a Page from Zara’s Playbook

When it comes to retail sales, profits and overall performance, fast-fashion powerhouse Zara is at the top of the class—and supply chain excellence is the reason why.

A recent Forbes article, “Zara Uses Supply Chain to Win Again,” sheds insight into Zara’s supply chain prowess. “Fundamental to Zara’s money machine is a massively superior ability to sense both demand and supply. Demand data flows unimpeded to the supply chain…awareness of capacity, cost, availability and lead time is therefore far better than for competitors, who rely on distant supply bases in Asia or Latin America.”

Few if any retailers can replicate Zara’s tightly integrated operations. But taking a page from Zara’s playbook, companies can take major strides in connecting information and breaking down the operational silos in their business, areas in which Zara excels. It’s the key not only to reducing lead times—today’s No. 1 supply chain priority—but also to controlling costs and increasing profits. Read more...