Nowadays, the fashion industry demands more and more creativity, versatility, and especially agility to compete in the market.
Companies need to be always aware of new trends and ready to meet what the market demands at the right time, given the importance of the sector.
In a sector where labor costs are a fundamental variable in competitiveness,
the acceleration of the integration of world markets and the increase in international competition, mainly due to Chinese products, with the progressive reduction of tariff barriers and other international trade safeguards, have resulted in a trend towards the reduction of production costs, especially labor costs, which has accentuated the displacement of a significant portion of the production of articles in the clothing chain from developed countries (United States, European Union and Japan) to emerging countries in Asia, Eastern Europe, North Africa and the Caribbean.
Fast fashion is designated as a business strategy that aims to reduce the processes
involved in the buying cycle and deadlines bringing new fashion products in order to satisfy to the extreme the consumers’ demands.Popular culture (a highlight for the fashion world) moves the trends once consumers are highly influenced not only
by music, movies, television, celebrity styles, but also by the life context in which they are inserted, be it in bars, nightclubs, colleges, events, among others.
They are characterized by the retail strategy of adapting products
according to the trends dictated by the consumer in the fastest and most efficient way possible, replacing the traditional model in which designers dictated fashion.
This response by retailers to constant market changes takes place within a few weeks, as opposed to the industry average of six months.
The concept of fast fashion was pioneered in the world by the European department store chain Zara, everything about Zara is modernized for efficiency. The building
I am in is the logo of the brand, and there are few steps between here and the customer. The design, the buying, the model creation, the samples and the commercial look are all handled in-house. More than 50% of the clothes, particularly the high fashion items are
made in Zara’s own factories in Spain, most of them close to the headquarters. A huge 480,000 square meter logistics center is capable of handling 60,000 garments an hour, shipping orders that arrive twice a week from the suburbs of La Coruña to stores around the world.
Zara has stores all over the world and through a model with low stocks,
an efficient distribution system and a quick exchange of products, it has become a world leader in low prices while still being fashionable.
Zara’s strategy, according to Christopher, Lowson and Peck (2004), is to conduct in-house only those operations that improve cost reduction efficiency through economies of scale (such as dyeing, cutting, labeling and packaging). All other manufacturing activities, including labor-intensive finishing stages, are completed by a network of over three hundred subcontractors, each specializing in a part of production or a type of article. These subcontractors work exclusively for Zara. In return, they receive all the technological, financial and logistical support
necessary to meet the required deadlines and quality targets.
Zara’s fast fashion scheme contains four pillars:
1. Design
2. Purchasing and production
3. Distribution
4. Sales.
Zara has its own centralized distribution system consistent of about 400,000 square meters of facilities in Arteixo and other much smaller centers in Argentina,
Brazil and Mexico that receive consolidated shipments from headquarters.
All Zara merchandise, from internal and external suppliers, passes through the distribution center in Arteixo, which operates on a double-shift basis and features a mobile monitoring
system that gets the clothes ready in the labeling area with carousels capable of handling 45,000 garments per hour.
Orders are received from laptop computers in the stores (twice a week
during regular periods, and three times a week during the
selling season), and are checked into the distribution center, and if a particular item is missing, allocation decisions are made. Once an order has been approved, the warehouse issues a lists that are used to organize deliveries.
Lorena Alba, director of logistics for the Inditex group, says that the warehouse
is considered a place to move goods rather than store. According to her, “the vast majority of clothes are only here for a few hours,” and no product has
ever been in the distribution center for more than three days. Of course,
the rapidly expanding network of stores requires constant adaptation
to the sequence and size of deliveries, as well as their routes.
Zara is a worldwide icon of fast fashion, renewing both men’s and women’s clothes once a week. So this short life span makes these items especially attractive to consumers. Thus, the speed of Zara’s supply chain brings another advantage: The new goods arrive in the stores only twice a week, with which the company entices its customers. They try to display no more than four units of each product
in order to convey an image of value and scarcity.
Resources:
BARNES, L. & LEA-GREENWOOG, G. Fashion Marketing and Management: An internal journal, Ed. Emerald, 2006. Available in: <http://books.google.com/books?id=E2btlKDHEIoC&printsec=frontcover&dq=Barnes+Lea – Greenwood&ei=CAgVS6TlGpK0NqWrhIQL&hl=pt-BR#v=onepage&q=&f=fals>.
BARREIRO, Ana María. Un Modelo de Empresa Innovadora y Flexible: el caso Zara. Revista de Investigaciones Politicas y Sociológicas. Vol. 6, No. 001, 2007. Available in: < http://redalyc.uaemex.mx/redalyc/pdf/380/38060105.pdf>
BALLOU, Ronald H. Gerenciamento da cadeia de suprimentos/logística empresarial
<https://www.academia.edu/36531997/GERENCIAMENTO_DA_CADEIA_DE_SUPRIMENTOS_LOGÍSTICA_EMPRESARIAL>
The blog of Logistics at MGEPS at UPV 