Business Plan Assignment Supply Chain Management In Zara
Prepare a well-researched business plan assignment on the case of Zara critically discussing the sustainable issues in supply chain management.
A. Research Plan
The present research on business plan assignment has taken Zara for the analysis which is a well-established name in the field of fast-fashion, and this factor has created issues for this company. Assessment Task 2 has helped in identifying research problems regarding running business in this organisation. Hence, the present research plan will focus on the relationship between supply chain management processes regarding fast fashion and sustainable business approaches in Zara. Moreover, this plan will focus on applying concepts and theories learnt in the assessment task 2, including supply chain management and sustainable approaches of management. Moreover, the target audience of this research plan is members of the Board of the company Zara or business executives of this company.
Flexible distribution and manufacturing model was the strength of Zara when it comes to promoting fast fashion in this apparel industry. However, with changing time and advanced technology, the organisation has faced issues regarding sustainable approaches in the supply chain management system. Primary reason for such a fact is that Zara implements changes in designs of clothes every two weeks. On the other hand, competitors of this company change their designs of clothes in two or three months. This approach makes Zara ahead of its competitors such as H&M and Mango. At same time, this organization has become successful managing its process of work by working effectively in delivering 11,000 distinct items every year in comparison to its competitors with 4,000 to 2,000 every year (Zara.com, 2021).
Highly automated distribution centre of this company has made its supply chain huge and effective in the world. Along with that, market demand of a cloth decides its price in this organisation rather than the manufacturing costs. Zara plays a crucial role in competing with its greatest competitor Nike with its agility and flexibility of manufacturing products rather than cheap labour or low cost of manufacturing (Inditex.com, 2021).Most importantly, the ultra-rapid supply chain management process of Zara might create issues regarding managing materials in an ethical way along with ending up harming the environment. Hence, sustainability is the key concern of the supply chain of this fast fashion brand.
Issue of this business research will revolve around identifying challenges and processes of work regarding supply chain management in Zara when it comes to managing fast fashion. Most importantly, three main challenges in this concern in the giant of fashion brands include sustainability, competition, and e-commerce. It is an issue, as COVID-19 has entirely changed the process of work in every industry, and this company has also suffered the problem of the lean approach of the industry. However, in this case, Zara owned more than 2200 stores all over the world, and physical stores faced critical issues regarding managing business after the occurrence of this pandemic. On the other hand, Zara with a fast fashion approach creates issues regarding landfill due to wastes as this organisation creates 20,000 clothes designs every year (Inditex.com2021).
Most importantly, this organization faced a 44% fall in business in 2020 after the occurrence of the global health issue. Reason for such a fact is that Zara was forced to close around 1200 stores all over the world to reduce energy consumption. Now, it is an issue as this organisation is trying hard to cope with sustainable goals of the United Nations with the mission of Inditex, the parent company of Zara to use 100% sustainable fabric by 2025 (Zara.com 2021). Moreover, this research will shed light on factors regarding the impact of the supply chain management system of Zara in meeting the sustainable goals of its parent company.
1.4 Aim and Objectives
Aim of this research will be to analyse the impact of supply chain management of Zara in its sustainable performance and growth. Along with that, this study will also focus on working effectively to identify the importance of sustainable approaches of Zara to reach organisational goals through the supply chain management system. In this context, issues regarding supply chain management in this fashion brand will also be revealed and discussed minutely.
Objectives of this study will be
- To identify issues in Zara regarding supply chain management that affect the sustainable approach of this company
- To analyse impact of supply chain management in sustainable growth of Zara
- To evaluate supply chain management issues in Zara affecting sustainable performance and growth
- To recommend strategies that can help in improving overall conditions regarding sustainable business approach of this company through supply chain
1.5 Research Questions
- What are the issues in Zara regarding supply chain management that affect the sustainable approach of this company?
- How does supply chain management affect the sustainable growth of Zara?
- What are the impacts of supply chain management issues in Zara regarding sustainable performance and growth?
- How most suitable strategies can help in improving overall conditions regarding sustainable business approach of this company through supply chain?
2. Literature Review
2.1 Concept of supply chain management
Supply chain management revolves around managing processes of transforming raw materials along with managing flow of services and goods within an organisational system. Implementing a supply chain management system reflects economical efficiency in improving business processes and growth. Primary components of SCM include planning the procedure of manufacturing products along with identifying sources of raw materials before making decisions that lead to delivery products (Bachmann 2019). At the same time, it includes factors such as returning products. However, before implementing SCM within an organisational setting it is essential for organisations to work effectively to segment the needs of customers by identifying processes of providing services and products to them.
Customising the logistics network is another essential part of managing the supply chain that requires to be selected as per requirements of the company. It is no different in case of making decisions regarding sources through a strategic process that will help in differentiating products closer as per requirements of consumers (Cousins et al. 2019). On the other hand, developing strategies as per supply chain-wide technology can help in managing supply chains more effectively. Measurement of performance regarding channel spanning when it comes to getting supply of raw materials of products from third-party logistics is an essential part in the case of supply chain management.
2.2 Concept of Sustainable supply chain management
Sustainability is another crucial aspect of supply chain management that revolves around implementing practices regarding supply chain through a financially and environmentally viable approach. For example, this approach helps in designing products and developing or manufacturing services and goods. Sustainable supply chain management (SSCM) helps in improving conditions regarding transportation, packaging, manufacturing, and material selection (Criado et al. 2017). Along with that, sustainable practices also need to be implemented in the processes of extraction of raw material and product design.
The Importance of this approach of supply chain revolves around improving productivity by saving time and money along with energy when it comes to implementing resources and techniques in a sustainable way. Along with that, increasing efficiency and significance related to machinery, vehicles, buildings, and saving costs. Three basic elements that intrigue sustainable approaches in managing supply chains are financial responsibility, environmental responsibility, and social responsibility (Crisan 2016). Hence, these aspects of business approaches help organisations to sustain their growth and performance along with improving customer experience to increase customer loyalty. It is essential for organisations to work on improving conditions related to scm by eliminating emerging issues such as solid waste, chemical emissions, hazardous greenhouse gas, and energy.
However, it is not possible for any company to work effectively regarding supply chain management without working on factors such as distribution, purchasing, operation, and integration of green approaches regarding supply chain. It is also worth noting that SSCM faces some challenges such as lack of resources related to process, material, technology, and technical expertise. However, resolving issues such as lack of experience, skills, and knowledge among employees can help in resolving issues regarding overall conditions in business organisations. In this specific place, eco-friendly sources can help in showing expertise of a company regarding sustainable approaches and manufacturing materials that can help in minimising or reutilising wastes.
2.3 Concept of sustainable growth
Sustainable growth within an organisational setting helps in preventing global warming and CO2 emission when it comes to prioritising factors that will help in protecting non-renewable resources. Sustainable growth helps in promoting social enterprise or a company that helps in growing a business from the perspective of financial growth along with analysing debt and additional equity. Along with that, revenue growth and sales play a crucial role in leveraging financial activities. Major principles regarding sustainable growth include decreasing total asset turnover, increasing profit margin, reducing dividend payments, and raising more debt financing (Elbaz and Iddik2020). Sustainable development of economic conditions helps in maintaining sustainable growth by working on factors such as reinforcing economic development and environmental conservation without conflicting interests of each other.
2.4 Challenges of sustainable development
Sustainable development comes with challenges such as humanitarian aid, conflict, climate change, unemployment, poverty and exclusion in the working process. Along with that, building a strong approach towards corporate governance is another critical aspect regarding supporting rule of law. Sustainable growth can be achieved only through utilisation of existing cash flow. However, it is not possible for organisations to work most effectively by increasing debt. Moreover, organisations also face issues regarding meeting sustainable development goals due to unfavourable demographics, inequality, long-lasting corruption, slower economic growth (Fernando et al. 2019). Implementation of sustainable development often faces political barriers such as environmental methods for policies, projects, and plans, social procedure, and inadequate economic aspects.
2.5 Supply chain references
Top-level elements in the supply chain include content and scope of supply chain that helps in increasing overall performance along with working more effectively. Process element level revolves around best practices, process performance metrics, and element definitions when it comes to completing operations strategy of an organisation. Configuration level is another approach of work that helps organisations to manage strategy for supply chain that helps in improving working process and reaching consumers more effectively (Kaur et al. 2019). However, planning is important when it comes to the manufacturing and inventory process to control the entire approach regarding aggregating demands of analytics and developing courses of improving conditions of work.
Figure 1: Supply Chain References Model
(Source: Influenced by Kaur et al. 2019)
Procurement management is another effective part of sourcing that helps in ample production or making of product development. However, delivering products and services is the only concern regarding developing better approaches related to demand variations and value-chain when it comes to analysing demands of products and services through product development. Every component of supply chain management helps in making strategic decisions that help in implementing a leaner supply chain (Laz?r 2017). Along with that, competitive advantages of firms also need to be gained through simplification of manufacturing related design through better procedures, processes, and layout.
2.6 Responsive supply chain model
Custom configured model is an effective aspect of responsive supply chain model that helps in managing “on demand” situations. Flexibility for industries is an essential aspect of making changes to product development. Making changes is an essential part for manufacturers when it comes to producing goods and services as per flexible approaches of organisation. Primary role of the supply chain management system in a responsive way revolves around a flexible approach towards managing the supply chain through better approaches towards product development (Lee and Seo 2018). However, this responsive model of supply chain also comes with some downsides including challenges regarding usage of under trained staff or depending on only the ability of human production.
Flexibility of approaches is the only concern of response process of managing supply chain that helps in changing decisions and making strategic decisions as per situational demand. However, implementation of technological approaches and advanced approaches regarding managing business can help in eliminating human error. Along with that, the same goals with different measures also come in this approach of supply chain management that helps in enhancing productivity, satisfying end users, and reducing risks (Prodanova et al. 2019). Along with that, keeping costs down is another essential aspect that helps companies to manage supply chains and improve chances of reaching organisational goals and objectives within a limited time.
2.7 Efficiency of supply chain models
Commodity manufacturers help effectively in making low-cost clothing in the fashion industry by working on continuous flow model, fast chain model, and efficient chain model (Oluwatoyin et al. 2018). For example, the clothing industry is an effective example of an efficient supply chain model that implements the fast chain model. For example, companies such as Zara play a vital role in implementing an efficient supply chain model such as a fast model of creating best design and developing products to deliver exclusive designer products to consumers. However, cost and unique value are other crucial aspects of this business-related supply chain model (Li et al. 2019). Customer base becomes more attracted to stay creative and competitive in the volve regarding creating end-to-end efficiency in these models of managing costs and unique value of products while operating in different aspects of the supply chain.
2.8 Channel coordination
Channel coordination model in the supply chain plays a vital role in maintaining flow of work from the suppliers of raw materials, transportation, and manufacturing (Pu et al. 2018). Along with that transportation after manufacturing products to retailers is also an essential part in improving overall conditions regarding saving time and reducing overall costs. However, the network perspective of supply chain management is no less important when it comes to managing overall business processes (Liu et al. 2018). Along with that, materials logistic management is another creative part of managing e-commerce business in this age of advanced technology and after the occurrence of COVID-19, the pandemic. Along with that, third party logistics in the case of shipping, fulfilment, and warehousing are other effective parts that help in managing materials of logistics management in supply chain through raw materials, production process, parts supplier, and management of customers.
2.9 Theory of constraint
Idea of constraint in theory of constraints gets a better dimension regarding potentiality to improve production procedures and managing supply chains through potentiality of supply. Along with that, identifying constraints, exploiting constraints, and elevating constraints of the system is the primary concern of this theory that helps in managing third party logistics effectively. On the other hand supporting everything to constraints regarding systems help in improving conditions of logistics and supply chain efficiently (Mamedova et al. 2019). Moreover, identifying the next constraint to repeat the flow of work and theory of constraint is the only concern regarding best practices of managing constraints.
2.10 Total Quality Management
TQM goes beyond managing constraints in an organisation when it comes to managing the entire supply chain through a streamlined process. Most importantly, continuous improvement, communication, employee involvement, focus on customer, process centred, strategic and systematic approach, and integrated system are crucial parts of this management system (Moh’d et al. 2017). Along with that, decision-making processes on the basis of the facts help in prioritising aspects of work and developing better conditions regulated to managing relationships with customers and suppliers. It is worth noting that it is essential for companies to train employees to provide the best services and high-quality products to customers. This approach helps in improving overall conditions regarding providing training to employees and managing the entire quality of the working process.
2.11 Gap in Existing Literature
Review of literature on sustainable development and supply chain management reflects plethora of research on these aspects along with theories, models, and concepts. However, a very few researchers have paid attention to analysing supply chain management and sustainable development in one line in context to Zara, a giant of fashion brand. Hence, this study will bridge the identified gap in literature by exploring aspects of managing business approaches in Zara to maintain sustainable development when it comes to implying supply chain management system.
3.1 Research philosophy (Interpretivism)
Research philosophy reflects thoughts of researchers through reliable and new knowledge on a specific research phenomenon. In this case, research philosophy will help in processing collected data after the formulation of the problem. Philosophical perspective will help in making choices regarding methods of research on the basis of the purpose. Qualitative research reflects naturalistic, humanistic, and interpretive approaches by going beyond dynamic and complex. In this research paper, interpretivism will help in managing entire task of interpreting elements of this research when it comes to accessing reality through socially constructed instruments, shared meanings, consciousness, and language (Tobi and Kampen2018). It is worth mentioning that positivism is the alternative of this philosophical perspective while completing any research. However, positivism will not be usedin this research paper to utilise advantages of interpretivism in the context of sustainable approaches in supply chain management.
Interpretivism comes with multiple and socially constructed nature of reality that helps in managing weak prediction and understanding of goals when it comes to research. Generating knowledge is another crucial aspect of this philosophical perspective that helps inb creating value bound, culture, context, and time related meanings (Shrivastava et al. 2018). Participative, cooperative, and interactive approach of interpretivism has helped in improving overall conditions regarding generating primary data.
3.2 Research approach (Inductive)
Every researcher requires selecting procedure and process of completing the study to complete tasks of interpreting data after collecting and analysing efficiently. In such a condition, research approach plays a vital role in managing entire process of work through qualitative and quantitative methodologies of research. Three common approaches of research are deductive, inductive, and abductive approaches (Liu, 2019). However, from the alternatives selected research approach is inductive approach to manage processes of work by altering direction of study on basis of research questions. It is worth noting that it is essential for researchers to select method of collecting data and processes to identify approaches. For example, in this research, the researcher will use qualitative methods to collect data.
Thus, type of reasoning in this study will revolve around meaning, subjectivity, and induction approach. Due to this reason, selected approach for this research on sustainability and supply chain management in Zara will be inductive approach. For example, questions of this study will revolve around process-orientated and open-ended questions. Moreover, constant comparison and narrative description will be used to analyse collected data. This approach will also help in utilising theories and concepts along with models and frameworks to develop a critical and better understanding on supply chain management. Along with that, analysis of data will become easy by considering every aspect of SCM and sustainability.
3.3 Research Design (Descriptive)
Research design helps in identifying entire strategy regarding integration of logical and coherent way of managing a business research. In such a circumstance, collecting data is an essential aspect after measuring and analysing data (Lariviere and Kandampully2019). This study will use descriptive design that will help in developing blueprint for analysing data along with measuring the collected information. In this case, descriptive design of research establishes a current issue on basis of collecting data that can help in increasing chances of getting success in business research. In this case of Zara, this design will help shed light on factors affecting business processes and integrity of working process.
3.4 Data Source
Secondary sources such as official website of Zara, annual report of this company, and journal articles on sustainable and supply chain management will be used in this research. Moreover, reason for using this source of data is to collect relevant information regarding Zara to develop a better approach regarding identifying non-numeric information from annual report regarding impact of fast fashion in Zara to complete tasks of managing behavioural data. Secondary data reflects usage of data collected already published information from onoine portals, journals, newspapers, managizines, and books.
Secondary source will help in managing quality of work along with relevance of the collected data as it will select only peer-reviewed and full-text journal articles for SCM and sustainability. Thus, this study will get advantages of analysing interpretation of other researchers who have already worked in this field efficienty. Along with that, this source of data will help in contributing to effective development of this research area along with managing depth of analyses, quality of discussion, and reliability of sources. Simultaneously, usage of data and managing entire process of work revolve around managing data availability and importance of increasing reliability and validity of research.
3.5 Data collection Tool
Tool of collecting secondary data will be online websites and annual report of Zara while collecting specific information regarding performance and nature of works of Zara. On the other hand, this study will collect data from books and journal articles to related and create theme to reach research questions regarding sustainable development and supply chain management systems.
3.6 Sampling technique
Sampling process of the research will include collecting data from journal articles published within five years along with explaining variables effectively. Along with that, articles written in English will only be used along with eliminating irrelevant journals that cannot provide the answer of the research questions. Primarily, no article without full-text or peer-reviewed aspects will be used in analysing and collecting the data to meet research objectives and aim.
3.7 Data analysis
Secondary thematic analysis will be selected process of analysing collected qualitative information from official websites of Zara. Along with that, this procedure will be done by working on the process of conducting content analysis that will analyse theoretical perspectives and process of work (Basias and Pollalis2018). Along with that, framework analysis, and discourse analysis are other critical parts of qualitative approaches of analysing data that help in natural aspects of written texts. Thematic framework will be the core aspect of analysing this data when it comes to managing supply chain sustainably in this company.
3.8 Reliability and validity
Reliability depends on getting same results using same tools and instruments in any situation. In this case, reliability of the research paper will be maintained through collecting relevant information as per the selected area of research, including dimensions of sustainability, supply chain management, and procedure of work (Lariviere and Kandampully2019). Most importantly, usage of appropriate methodology helps in maintaining validity of research that considers scientific nature of research paper. Along with that, suitable sampling method of collecting website articles, journal articles, and books will also be selected to maintain validity and reliability of the data.
Ethics is the key criteria of this study that will help in managing overall process of work without any mistake. Primary reason for implying ethical considerations in this study to avoid any consequences in future due to any type of misconduct while collecting data and analysing them. For example, in-text citation and acknowledgement of works of previous authors that will be used will be the most crucial aspect of managing ethics in business research. In this way, ethical approach and attitude of this study will expand knowledge on the specific area by promoting aims and objectives of research (Basias and Pollalis2018). Fairness is the most effective part of this study that will help in working most effectively regarding engaging environment.
4. Estimated Costs
Collecting books and journals
Table 1: Estimated Costs
(Source: Created by author)
5. Summary of Research Plan
This research paper will focus on analysing supply chain management and sustainable development in Zara. However, flexible model of distribution and manufacturing are critical aspects of fast fashion in this company. Moreover, this study will work on meeting objectives such as issues regarding SCM and sustainable approaches of Zara. Evaluating SCM is another critical aspect of this research paper. Moreover, this research plan has provided review of existing literature on SCM and sustainability along with analysing methodology of completing this research.
B. Short Reflection
[Referred to Appendix]
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Appendix: Short Reflection
While working on Assessment 2, I have witnessed similarities with Assessment 1 when it comes to researching and developing knowledge on supply chain management issues and sustainable approaches of Zara. Hence, in this part, I am going to reflect on the process of my learning and differentiating experiences that have helped me in completing these assessments.
Description of the experience
I have gone through the industry and nature of Zara as a fashion brand when it comes to serving customers and managing employees. I have developed a keen knowledge and deep understanding on the process of managing employees and customers simultaneously through the business model of this company. For example, fast fashion is the key factor of the supply chain management process of this organisation. It is no different in the case of identifying the fact that the present company has the opportunity to work effectively in managing business efficiently in a changing environment by focusing on meeting sustainable development goals. In this case, specific experience revolves around understanding different dimensions of supply chain management and sustainable models.
The approach of learning about sustainable management processes and supply chain includes the process of working effectively and evaluating the nature of work within an organisational setting. For example, I have come to know about the supply chain model of this organisation in assessment 1. However, assessment 2 has helped me to understand the theory of flexible approaches and responsive model of supply chain that have helped in developing a relationship between these two experiences and different approaches regarding the working process in supply chain management.
I have experienced a good feeling in the process of understanding a better aspect regarding creating a better dimension in business approach. In this case, I have analysed industry and nature of the organisation in assessment 1 that has helped me to relate with the theories and concepts I have gone through in the second assessment. Both of these assessments have helped me to continue my learning and approaches on overall conditions regarding supply chain and sustainability. I have also seen an effective approach of companies in improving the management process of the supply chain.
I have gone through different approaches to sustainable development goals and objectives regarding managing the supply chain. For example, these two aspects have a keen relationship improving performance of business organisations through implementation of circular economy to reduce wastes and managing overall business approaches. However, fast fashion companies face issues regarding working effectively in gaining trust and loyalty from people.
Thus, understanding of better approaches regarding uncertainties in this field of business management is an essential part in completing tasks of managing sustainability. Thus, I have differentiated learning in these two assessments in the form of theories and models.
Thus, I have developed a plan for working effectively and managing business in this organisation efficiently. I have identified the importance of knowing about the procedure of sustainable management in the supply chain.