Introduction: Case Study Summary
Zara has been operating in the apparel industry for quite a while, providing its customers with the clothes of a bearable quality and at rather reasonable prices. However, the firm has been experiencing hiccups in its operations recently. The key issues that Zara has been experiencing concern the lack of cooperation with suppliers and, as a result, a rapid drop in quality rates. Moreover, the lack of focus on the quality issues has been the primary problem of the company as well.
The drop in quality has provided competitors and copycats with ample opportunities for creating the products that are similar to Zara’s clothes. The activities of the companies that create illegal copies of Zara’s product affect the entrepreneurship negatively, changing the customers’ perception of the firm. Therefore, Zara needs a radical change in its SCM framework that will allow for a rapid increase in product quality (Zara operation management: a business case 2008).
Problem Statement: Competitors and QA Enhancement
At first sight, the Zara Company may seem a prime example of an impeccable organization with flawless management and perfectly paced operations. However, on second thought, one may dismiss the idea of the firm reaching the top of the global economy. The inconsistent quality rates (low medium, as the case study states) point to the necessity to reconsider the current QA processes and, perhaps, redesign the staff’s concept of operational performance.
The low quality rates shown by the organization pave the way for the competitors to take its place in the contemporary market. As the case study shows, Zara has been suffering from the increase in the activity of copycats. The phenomenon above can be attributed to the fact that the company does not try hard enough to create the clothes that cannot be imitated easily.
The lack of flexibility in the strategies adopted by the suppliers should also be viewed as a major impediment to the improvement of Zara’s product quality, Seeing that inventory supply is a part and parcel of the procurement process, the end product delivery is delayed, thus, causing customer dissatisfaction to rise. It is quite remarkable that the problem persists even despite the unique SCM framework aimed at reducing the number of inventories utilized across the supply chain.
Differently put, the absence of the set of values and the philosophy that could help Zara create a stronger supply chain and manage the relationships with its suppliers can be considered the primary problem of the organization. Particularly, there is an obvious lack of the leadership approach that would help the company members get the priorities straight and introduce a new QA framework.
Analysis: The Steps to Be Taken
To address the issues mentioned above, Zara will have to create the quality management philosophy that will serve a the foundation for building relationships with suppliers and catering to the needs of the end customer. As soon as the product quality delivered by Zara increases, the operations of the copycats are likely to fail due to the need to meet the increased quality standards. Thus, Zara will be able to design a strong competitive advantage that will set it aside from the rest of organizations.
In other words, a tool for improved communication with suppliers and a more coherent QA approach will have to be incorporated into the Supply Chain of the organization. Seeing that the data management is linked directly to the quality of the product, it is expected that the transfer to a new communication strategy will trigger a considerable increase in the customer satisfaction rates (Flynn & Zhao 2014).
However, the promotion of improved communication with the suppliers does not guarantee an immediate rise in the quality of the products delivered by the organization. As the case study shows, Zara has been selling consistently average goods, the quality of which can be rated as low or medium. In order to gain a strong competitive advantage and become immediately recognizable among the target audiences, the entrepreneurship will have to consider the application of the tools that will affect the quality of the product directly.
For these purposes, the principle of economic sustainability needs to be introduced into the framework of the company’s operations. Particularly, the Six Sigma system aimed at quality improvement needs to be viewed as the primary device for improving the performance of the organization and the quality of the product.
The issue regarding the communication will suppliers also deserves attention. As stressed above, compelling them to follow a more rigid set of rules concerning deadlines and product delivery is a must. The focus on the transformational leadership style as the means of conducting and monitoring changes at all levels of the supply change is justified by the fact that, apart from a change in the SCM system, a redesign of the traditional organization behavior patterns of the staff members and suppliers will have to be made (Graham, Manikas, & Folinas 2013).
In regard to the supplies issue, the creation of channels for regular and successful communication should also be viewed as an option. As stressed in the case, the performance of the partners leaves much to be desired. In this case, the causes of the low performance rates will have to be identified. If suppliers are unwilling to cooperate, the choice of a new partner should be viewed as an option. If the quality issue concerns primarily the quality of communication, the introduction of the latest technological innovations as the means of promoting quality must be considered. The identified framework should be viewed as the extension of the Six Sigma framework mentioned above, i.e., a part and parcel of the Control Phase (Pyzdek & Keller 2014).
Alternatives: Locating the Available Solutions
The Six Sigma framework is not the only concept assisting in the improvement of performance quality rates. Along with the identified approach, the Total Quality Management (TQM) tool is often mentioned. Though traditionally considered a part and parcel of the Six Sigma system, it may also be used isolated from the identified strategy. Although being admittedly useful as a means of increasing quality, it does not allow for a broader focus on the company processes as the Six Sigma system does.
The Lean Manufacturing could also be used as the tool for improving the quality of the company’s products. Used as the tool for reducing the amount of waste produced, the identified framework could be considered impeccable for Zara if not for the lack of focus on the communication issue. While allowing for a significant drop in the use of raw materials, as well as a reduction in the number of defects produced per batch or unit, the Lean Manufacturing concept is still not quite applicable to Zara’s case due to the need to focus on both the internal and external issues. Therefore, despite a rather promising strategy that the identified framework provides, it cannot be viewed as acceptable in the context of Zara’s current situation. However, it could be viewed as a possible tool for improving product quality once the supplier issue is addressed (Wilson, Hill, & Glazer 2013).
Recommendations: Focusing on the Competitive Advantage
Seeing that a significant improvement of the quality framework is the key concern for Zara at present, it is recommendable that the entrepreneurship should apply the Six Sigma approach, in general, and its DMAIC tool, in particular, as the means of reducing waste and introducing the philosophy based on the principles of sustainability into the organization. The identified changes will have to be carried out on the level of its supply chain. In other words, Zara leaders will have to use the leadership approach that will help redesign the staff’s concept of quality management and promote the idea of repeatability in the context of the entrepreneurship (Avolio & Yammarino 2013).
Seeing that communication, in general, and successful transfer of the relevant data, in particular, can be considered the key objective in improving the relationships with the company’s suppliers, the current technological devices used as the means of coordinating the work of different units should also be reconsidered. The application of the strategy aimed at increasing quality standards through the improvement in communication is likely to help Zara gain a competitive advantage in the target environment. As soon as the entrepreneurship leader designs the values aimed at enhancing staff responsibility, a rapid increase in the supply chain efficacy is expected to occur.
Avolio, B J, & Yammarino, F J 2013, Transformational and charismatic leadership: the road ahead, Emerald Group Publishing, Bingley.
Flynn, B B, & Zhao, X 2014, Global supply chain quality management: Product recalls and their impact, CRC Press, Boca Raton, FL.
Graham, D, Manikas, I, & Folinas, D 2013, E-logistics and e-Supply Chain Management: applications for evolving business, Idea Group Inc (IGI), New York, NY.
Pyzdek, T, & Keller, P 2014, The Six Sigma handbook, McGraw Hill Professional, New York, NY.
Wilson, R, Hill, A V, & Glazer, H 2013, Tools and tactics for operations managers (collection), FT Press, New York, NY.