Harvard Case and Starbucks Corp. Study Guide Answers.docx -...

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Harvard Case 1) What were the key lessons Ortega took away from his early scare? To be successful, “you need to have five fingers touching the factory and five touching the customer.” Translation: Control what happens to your product until the customer buys it. 2) What are some of the things Zara can do because of the super-responsive supply chain it has built? They can ramp up or down production of specific garments quickly and conveniently because it normally operates many of its factories for only a single shift. 3) How is Zara’s supply chain different from most other supply chains in their industry? - keeps almost half of its production in-house - Far from pushing its factories to maximize output, Zara intentionally leaves extra capacity. - Rather than chase economies of scale, Zara manufactures and distributes products in small batches. - Instead of relying on outside partners, Zara manages all design, warehousing, distribution, and logistics functions itself. - Zara puts price tags on items before they're shipped, rather than at each store. - Zara tolerates, even encourages, occasional stock-outs. 4) What are the three principles Zara lives by? Know what these principles mean and how they are carried out. -Close the communication loop: goal is to close information loop between the end users and the upstream operations of design, procurement, production, and distribution as quickly and directly as possible -Stick to a rhythm across the entire chain: spends money on anything that helps to increase and enforce the speed and responsiveness of the chain as a whole

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