Ra页id-FireFulfillment.docVIP

Spanish clothier Zara turns the rules of supply chain management on their head. The result? A superresponsive network and profit margins that are envy of the industry. Rapid-Fire Fulfillment Kasra Ferdows Michael A．Lewis Jose A．D．Machuca When a German wholesaler suddenly canceled a big lingerie order in 1975, Amancio Ortega thought his fledgling clothing company might go bankrupt. All his capital was tied up in the order. There were no other buyers. In deperation ,heopened a shop near his factory in La Coruna,in the far northwest corner of Spain, and sold the good himself. He called the shop Zara. Today ,over 650 Zara stores in some 50 countries attact well-helled customers in luxury shopping districts around the world ,and Senor Ortega is arguably therichest man in Spain. The clothing company he founded, called Inditex , has been growing ever since he opened that first Zara shop. From 1991 to 2003. Inditex’s sales 70% of which spring from Zara-grew more that 12-fold from 367 million to 4.6 billion, and net profits ballooned i4-fold from 31 million to 447 million. In May 2001, a particularly tough period for initial public offerings, Inditex sold 25% of its shares to the public for 2.3 billion. While many of its competitors have exhibited poor financial results over the last three years, Zara’s sales and net income have continued to grow at an annual rate of over 20%. The lesson Ortega from his early scare this: To be successful , “ you need to have five fingers touching the factory and Hve touching the customer.” Translation: Control what happens to you product until the customer buy it. In adhering to this philosophy ,Zara has developed a superrsponsive supply chain. The company can design, produce, and deliver a new garment and put it on display in its stores worldwile in a mere 15 days. Such a pace is unheard of in the fashion business,where designers typically spend months planning for the season, Because Zara can offer a large variety of the latest designs qui