See m p o rter strategy and the internet harv

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Unformatted text preview: age o f six mo nths to design a new co llectio n and then ano ther three mo nths to manuf acture it. VF Co rp (Lee, Wrangler) can take nine mo nths just to design a pair o f jeans, while J. Jill needs a year to go f ro m co ncept to sto re shelves.L. Sullivan, “Designed to Cut Time,” Info rmatio nWeek, February 28, 2005. At Zara, mo st o f the pro ducts yo u see in sto res didn’t exist three weeks earlier, no t even as sketches.J. Suro wiecki, “The Mo st Devastating Retailer in the Wo rld,” New Yo rker, September 18, 2000. The f irm is able to be so respo nsive thro ugh a co mpetito r-crushing co mbinatio n o f vert ical int egrat ion and techno lo gy-o rchestrated co o rdinatio n o f suppliers, just-in-time manuf acturing, and f inely tuned lo gistics. Vertical integratio n is when a single f irm o wns several layers in its value ch ain.Def initio n f ro m the “f ather” o f the value chain, Michael P o rter. See M. P o rter, “Strategy and the Internet,” Harv ard Business Rev iew 79, no . 3 (March 2001): 62—78, amo ng o thers. While H&M has nine hundred suppliers and no f acto ries, nearly 60 percent o f Zara’s merchandise is pro duced in-ho use, with an eye o n leveraging techno lo gy in tho se areas that speed up co mplex tasks, lo wer cycle time, and reduce erro r. P ro f its f ro m this clo thing retailer co me f ro m blending math with a data-driven f ashio n sense. Invento ry o ptimizatio n mo dels help the f irm determine ho w many o f which items in which sizes sho uld be delivered to each specif ic sto re during twice-weekly shipments, ensuring that each sto re is sto cked with just what it needs.C. Gentry, “Euro pean Fashio n Sto res Edge P ast U.S. Co unterparts,” Chain Sto re Age, December 2007. Outside the distributio n center in La Co ruña, f abric is cut and dyed by ro bo ts in twenty-three highly auto mated f acto ries. Zara is so vertically integrated, the f irm makes 40 percent o f its o wn f abric and purchases mo st o f its dyes f ro m its o wn subsidiary. Ro ughly half o f the clo th arrives undyed so the f irm can respo nd as any mi...
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This document was uploaded on 01/31/2014.

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