Zara Case

Textile and clothing is a very mature industry that has been exposed to a lot of changes and innovations regarding the design, the materials used for making clothes and the production methods. The case goes through an explanation of the evolution of the sector and then focuses on Inditex, the biggest textile company that exists nowadays.

In its first days it was a cottage industry. This was characterized by a high concentration of local manufacturers in specific geographical areas, the use of basic technology (the loom) and the use of simple materials such as wool.

The first big change in the industry was due on the Industrial Revolution. Development of technology and innovations and the growth of markets and population triggered a new way of manufacturing clothes that was highly industrialized and standardized. This fact resulted in an industry growth which lead to the appearance of more innovations and big stablished firms by the 20th century.

Today this is a global industry which players put a lot of effort in personalization and differentiation of their products. Moreover, innovation especially in the design stage of the value chain has gained huge importance since fashion collections are released more regularly and they not follow the typical seasonal track with winter and summer collections.

The biggest textile firm at the moment is Inditex which was founded by Amancio Ortega Gaona a Spanish entrepreneur who used to work as a clerk in a small clothing business in Spain. Now he runs the most succesful and perhaps the most innovative clothing firm in the sector. The main value proposition of Inditex is offering fashionable and affordable clothing by continuously presenting styles that are trendy and "hot" for the season. The innovative factor coupled with a high variety of products has played a key role in Inditex huge growth and success.

This firm pays great attention in the design stage of the supply chain. Zara's design team generate approximately 1,000 designs per month that is then sent to their manufacturing plants and checked back in the Zara Centre, located in Spain. Another key feature is flexibility that comes from having a distinct model of manufacturing. Zara has a network of small workshops that the company uses to manufacture the clothes and then send them back to the main distribution center.

The use of information and communication technologies allows Inditex to track the inventory of their retail stores which helps to lower inventory costs and it is easier for the store manager to place an order in the distribution system. This device gives almost complete information to know which items are most sold and which not, thus replacing the low sale clothes for new ones.